A small number of private home proprietors have rejected the level of fee increases proposed by the local authorities and have issued notices withdrawing from contracts. Local government recognises the pressures on the private sector but issuing such ultimatums is an unacceptable way forward not least because of the distress and uncertainty caused to residents and their relatives.
'There has been a serious underfunding of care services for older people in Wales since the community care reforms in 1993. Despite additional funding for social services since devolution, there is a widening gap between the available budgets and demands for services from an ageing population. New requirements to improve the quality of services and pay and conditions for care workers are adding to these financial pressures. The problems and pressures affecting private homes must be viewed in this context. All organisations with a responsibility for providing services to disabled and older people are similarly affected.
'The level of fee increases being demanded by some private homes are well above inflation and the assumptions made by the assembly in calculating the local government settlement and social services specific grants for 2002/3. The funding being provided by local authorities does not therefore allow us to meet these demands. We could only do so by cutting other valuable services and disadvantaging other community care providers, such as the voluntary sector.
'Local government is committed to working with the assembly and the independent sector to identify a range of measures which could ease the pressures on community care providers, support small businesses and give them some confidence of improvements in the medium term. But we are not prepared to do so while private sector homes continue to issue these ultimatums. Those who have either imposed unilateral fee increases or issued withdrawal notices, must first move away from such action and be prepared to negotiate a reasonable and realistic way forward with the local authority.
'Everyone involved in providing services for vulnerable people has a responsibility to act responsibly. Private sector proprietors must find ways to get the problems they face addressed without threatening residents, many of whom have lived in their current homes for over nine years, with the possibility of having to move. This is what will happen if these homes withdraw from existing contracts from April.'
- Research published by the Nuffield Institute in 1997 identified a£95m shortfall between older people's identified needs for services and the available community care budgets in Wales.
- The Care Standards Act, which comes into force in April, imposes new registration requirements, including environmental improvements and more single rooms, on all care homes whether run by local authorities, private or voluntary organisations. Other national assembly policies, the minimum wage legislation and EC Directives also require increased investment in training, supervision, pay and conditions for care workers. Again these new requirements will add to service providers' costs in all sectors, including private homes.
- Anyone resident in a home on 31 March 1993 and who was claiming social security benefits to pay for the home's fees has continued to have their fees paid through 'preserved rights' rates of benefit. From April this year, 'preserved rights' terminates and local authorities become responsible for funding these placements. Money has been transferred from the social security budget into next year's local government settlement to fund this new responsibility. The amount transferred to local authorities is based on the rates paid through 'preserved rights' for care home fees. Some home owners are taking the opportunity created by this transfer of responsibility to reject the fee increases offered by local authorities and instead demand rises well above the 'preserved rights' rate. In some cases, the fee increase demanded is around 30%. If the homes continue to refuse to accept the new rates offered and withdraw from the contracts with local authorities, many residents will have to be moved to other accommodation unless they or their families can find the means to pay the fees themselves.