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The vicious circle spiralling out of control

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LGC’s latest commentary on social care pressures

The plight of fragile older people facing reductions in their quality of care and struggling A&E departments are rightly highlighted as damning evidence of a failing social care system.

But as research by Laing Buisson published this week reminded us, as chronic underfunding persists there are other hidden consequences.

The analysis found the average fee per care home resident funded by councils now falls short of the actual cost of the support they receive by £100 a week.

The £1.3bn total annual shortfall this has created for care providers in England, the analysis concludes, is currently being met by a “hidden tax” paid by people who fund their own care.

The research found the cost of this extra financial burden equates to £8,000 a year on average per self-funding resident, a figure that is likely to rise as the national living wage comes into force and providers seek to recover increased costs.

Laing Buisson estimate that the average weekly cost for homes providing care for older people that meets basic regulatory standards will rise from £590 this year to £609 next year, including a projected 4.2% pay increase for staff due to the introduction of the national living wage.

The weekly cost rises from £631 this year to £652 next year for people receiving dementia care.

This trend raises the possibility of self-funded care becoming eventually unaffordable for increasing numbers of people as fees rise to provide greater subsidies for council-funded support.

Should that happen it will only serve to increase the number of people falling back on an ever more fragile safety net at the same time as councils struggle to cope with intensifying demands on social care services.

There are also potential dangers to the system emerging elsewhere.

This week it was revealed that 37 clinical commissioning groups have set cost restrictions on NHS Continuing Funding, which could force thousands of patients into residential care. Former care minister Norman Lamb (Lib Dem) described the development as the “worst manifestation of the pressure on the system”.

Research last year by financial analysts Company Watch and Opus Business Services has estimated that more than a quarter of care home operators are already at risk of insolvency.

The Care Quality Commission has also found evidence of providers changing their focus from the north of England to the south, where there is likely to be more people able to pay for their care.

This suggests that, if current trends were allowed to continue and become entrenched, the challenges facing care home provision could soon become critical, with a potentially dangerous impact on capacity in some areas of the country.

These pressures underline the significance of an evaluation launched last month by regulator Competition & Markets Authority into how the care home market drives quality and value for money. This will also consider how councils purchase care home places and “encourage and shape local supply”.

Councils wary of potential legal challenges on their statutory duty under the Care Act to maintain a sustainable care market will be watching closely.

The state of the care home market is a key indicator of whether the social care system is beginning to move beyond the oft-cited tipping point and towards something approaching entropy.

While there is a pressing need for Westminster politicians to engage in an honest and open debate about the long-term future of social care, immediate central government intervention is needed to prevent a vicious circle from spiralling out of control.

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