Chai Patel speaks in favour of price regulation

Posted on October 15th, by geoff in Caring Times. Comments Off on Chai Patel speaks in favour of price regulation

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HC-One chairman and acting chief executive Dr Chai Patel says he supports the idea of state control of the prices care providers charge for their services.

In the Guardian on October 14, Dr Patel told social care writer David Brindle that he would “be very happy if the Government wanted to have a price regulator, like we have in utilities, because this service is a public good, an essential public good”.

“Let’s have somebody tell us the fair margin that you should make in this sector and then see if we can, open-book, confirm that we’re doing that but no more than that,” said Dr Patel.

“I think you would find that more and more would agree with what I am saying. We have to reopen the debate about all this. Not only does social care need to be properly funded, or it will collapse, but if we don’t do it then the health service will collapse as well.”

David Brindle said independent care providers had long argued that fee rates paid by local government for state-funded users of their services were way below the level needed. Market analysts at LaingBuisson calculate that councils are paying an average £152 a week less than is required for a viable nursing home bed and £104 less than is needed for viability in a residential home, the shortfall being made up by charging higher rates to self-funding residents. The Government’s move to impose the National Living Wage (NLW) has raised the stakes still higher. HC-One, which employs about 14,000 people, none of them on the absolute current minimum, faces a £10m bill in a full financial year to pay the NLW and maintain differentials within the broader pay structure.

“Personally I am supportive of it; it’s the right thing to do,” said Dr Patel.

“Hard-nosed people will say: ‘But the present minimum is working; why change it?’ Well, it is working, but it’s working against tremendous stresses, as we are now finding out, and if we can take the opportunity to skill-up people and bring them into a wage structure that rewards them and recognises their contribution – maybe creates some form of profession – then it seems to me that’s the right way to go forward for the sector.

“But that £10m cost has to be funded. If we don’t get a fee increase at all next April, literally all our surplus cash before capital expenditure, interest and rent will be wiped out. We’re pleased that ministers have signalled publicly that they are going to take pay costs into account , but the concern is they will make some kind of nominal gesture. We’re also saying that whatever it is must be hypothecated for adult social care: local government funding has been cut so severely that it would be quite easy for it to go elsewhere.”

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