Elderly hit by council care home cuts

Updated: 
Is the Southern Cross care home saga just the beginning?

There's growing concern that the cash crunch from local councils could see many more residential homes closed or private fees raised substantially in order to ensure that profits are retained. Care home costs now look to be on a knife edge.

Fees will rise
Britain has around 20,000 care homes providing support for 200,000 residents who have few assets to support their own care home costs. Many care homes now face the dilemma of hiking fees for private residents in order to subsidise the costs for those with few assets or close completely.

That's the view, at least, of healthcare market analysts Laing & Buisson, who have outlined their concerns in a new report. So we rang Age UK (formerly Age Concern) for their view. Depressingly, Age UK agrees with much of Laing & Buisson's analysis.

Stephen Lowe, social care policy adviser at Age UK, told us he was worried about how many other small care homes were managing, especially, like troubled Southern Cross, if they had substantial debts.

Debt worries
"There is concern about other care home chains. The Four Seasons chain has got high debt levels and they periodically have to refinance that debt." He added: "The impact of local authorities freezing fees is mainly that fees will put up for private residents, and that is worrying."

Lowe says we're not seeing a rush of operators leaving the sector - yet. But if Four Seasons, which has 400 care centres and nursing homes, has re-financing problems in the next year, then things could change.

Four Seasons doesn't have to refinance their current debt until next summer so there is some breathing space. Meanwhile, private residents in many homes across the country will likely be asked to cough up the difference.

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