Impact of Care Act on care home fees remains unclear

Posted on April 27th, by geoff in CT blog. 1 Comment

By Guest Blogger LEON SMITH

Executive vice president, Nightingale Hammerson

As at 1st April, the first changes under the new Care Act came into effect and many of us are waiting anxiously to understand the full implications of what will happen in April 2016.

As far as finance is concerned, this will be the real crunch time. A lot of information is out there but we still don’t have the fullest guidance on exactly how local authority funding is going to work and we don’t know what the financial implications are going to be generally on the care home market, particularly on the self-funding market.

There will be many care homes who care for both privately funded and local authority commissioned clients who may need to think about their financial viability. For example, in homes where there is a 50/50 split between private funders and local authority commissioned clients, the latter of paying at the local authority’s prevailing rates rather than the true commercial fee, despite assurances and explanations from the Department of Health, there remains a concern that there will be pressure on providers to accept new self-funding clients at local authority rates rather than at private rates.

The true value of local authority fees has been eroded year on year and any further pressure on fees through the self-funding market could be a step too far. We know that the Care Act requires local authorities to have cognisance of the state of the market and the impact that these changes will have, but it is very difficult to see exactly how the local authorities will be able to assess this in time to save what could be a very serious situation.

We could well be on the road to a truly two tiered system comprising of private homes consisting entirely of self funders and other homes which are prepared to accept local authority commissioned clients and/or indeed, continuing care clients.

It is worrying that with only 12 months to full implementation that there is still so much ambiguity and so many unanswered questions regarding both implementation and the consequences, intended or not, of implementation.

  • The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.

One response to “Impact of Care Act on care home fees remains unclear”

  1. Peter Stamps says:

    I totally agree, there is of information in the public domain in variety of sources, but the detail is missing on how the impending changes will effect both the clients and their families and the providers.

    I still believe that clients will expect the maximum contribution published will be the true maximum contribution, and not aware that this will be based on local authority cost base and not the providers cost base. We are all aware of the variance between those two figures.

    Providers will need to understand and be able to defend their individual cost base per home, split between accommodation and care/nursing services.

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