Local authority fees no longer cover the basic cost of care, according to a two-home operator in Worcestershire, leaving his business entirely reliant on top-up fees to survive.
Bob Delaney, who runs The Cedars Nursing Home in Worcester and Parkhill Nursing Home in Tameside, told Care Home Professional that self-funding, either in full in part via top-up fees, is keeping the entire industry afloat.
Local authority funding, alone, does not cover the basic cost of care. If this was the only source of income for operators like his, they would all close, Mr Delaney argues.
Worcestershire County Council pays The Cedars Nursing Home £547 per week for each resident, which Mr Delaney calculates at an average of £3.25 per hour for each of his staff.
“We lose money on every Worcesterhire placement unless we receive a top up from the resident or their family,” he admits.
“Many homes are now reaching a point where LA placings will be refused with or without a top-up. Nationally the disparity between LA fees and private/self funders is close to a 40% shortfall in LA fee levels. That is higher than any historical differential and illustrates how far LA fees have fallen behind open market fees,” Mr Delaney states.
It is the residents and their families who suffer, Mr Delaney argues, because they have to individually pay for enhancements at a higher price than local authorities, with their collective bargaining power, could secure.
“The unfair element of this situation is that many self-funders are paying are probably paying at least £150 per week more than they might if LAs actually paid a reasonable fee level that recognised their status as a “wholesale purhaser” rather than a below cost rate that forces providers to charge self-funders an excessive premium to underwrite LA fee shortfalls. The burden placed on self-funders is not equitable,” he concludes.