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FRONT LINE FIRST-FINANCE

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News stories about the closure of nursing and residential care homes for elderly people are increasingly common. So...
News stories about the closure of nursing and residential care homes for elderly people are increasingly common. Some, if not all, of these stories point the finger of blame at councils. But it is worth looking at recent history to remind us how all of this came about.

In the 1980s the government embarked on a policy intended to reduce the number of elderly people staying in hospital, give older people a wider choice of care homes, and encourage the independent sector to provide more nursing and residential care homes for older people. Prior to 1983 there was no limit on the level of the charges which could be met from benefits - and even after 1985, when upper limits were set for weekly charge levels, there was no upper limit

on the size of the supplementary

benefit bill.

The independent sector grew rapidly and the benefit bill rose from£350m in 1985 to£2.5bn by 1993-94. The Department of Health became concerned by the costs, and an internal report concluded that the resources should be taken out of the benefits system and transferred to councils. In 1988 the Griffiths Report took this further - and recommended the transfer of funding and the responsibility for care assessment to councils.

One of the consequences has been that councils, whose own budgets have remained under pressure throughout the period since 1993, seek to restrict the fees paid to independent care homes. This in turn, it is argued, has led to the closure of many independent care homes.

Better policy analysis in the early 1980s should have told ministers that the number of independent sector providers would grow rapidly if the government was providing unlimited amounts of money - and could have prevented the disruption of recent years. A close look at the mistakes of the 1980s could help today's ministers avoid similar problems.

Rita Hale

Director, Rita Hale Associates

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