Care homes could face 'widespread closures' under reforms, counties warn

By Laura Sharman | 18 March 2022

Care homes are at risk of closure as the Government has ‘seriously underestimated’ the cost of its social care reforms, county councils have warned today.

A new report by LaingBuisson for the County Councils' Network (CCN) examined the cost of proposals to make care fees fairer between private and state fee payers, and the introduction of a new Fair Cost of Care to increase fees paid by councils.

Ministers have allocated £378m per year for councils to pay this new Fair Cost of Care, but the report warned an extra £854m a year was needed to make the proposals workable.

The report argued that without the extra funding there would be a ‘severe sustainability risk’ to care homes across the country.

Adult social care spokesperson for CCN, Martin Tett, said: ‘At the present funding level, these proposals could have a serious impact on the care sector across the country, leading to widespread care home closures and a rationing of care for the hundreds of thousands of people who need it each year.

’Councils will be left between a rock and a hard place – either by raising council tax to excessive levels and cutting local services or by seeing widespread care home closures in their areas.’

CCN called on the Government to bring forward funding for local government in the health and social care levy to fund the additional £854m a year required.

A Department of Health and Social Care spokesperson said: 'We recognise that the type of genuinely transformational change set out in our White Paper cannot be accomplished overnight so we are providing £1.36bn over the next three years to support local authorities to make significant progress towards paying providers a fair rate of care.

'This includes £162m in 2022-23 followed by £600m in each of the following two years.

'As part of our gradual implementation, we will review our approach ahead of allocating money for 2023-24, working closely with local authorities and providers to monitor market changes, and determine appropriate grant conditions, guidance, and distribution mechanisms.'

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