The financial pressure on older people and their families when trying to pay for social care is growing, with the average cost of a room in a care home now more than £30,000 a year.
The cost of a care home room has risen by 5.2% in the last year, more than 10 times the average increase in pensioners income, according to a report by Prestige Nursing and Care.
The figures highlight the financial crisis in the care home industry and the impact this is having on older people and their families. Four Seasons Health Care, Britain’s biggest care home group, reported a pre-tax loss of £264m last year and that it was struggling under the weight of more than £500m of debt.
The sharp increase in the cost of a room follows the introduction of the “national living wage” in April, which means all workers over 25 must be paid at least £7.20 an hour.
The average annual pensioner’s income of £14,456 would now cover less than six months’ care. The shortfall is equal to £317 a week or £16,470 a year, 9% higher than a year ago. This is despite pensioners enjoying an increase in their income for the last five years, ahead of the average household. The survey by Prestige Nursing does not take into account the value of assets, such as property. It was based on a survey of 165 care homes and official government statistics.
Jonathan Bruce, the managing director of Prestige Nursing, said: “It is particularly alarming that care home costs have risen almost 10 times as much as pensioner incomes in real terms, with the result that older people will find the challenge of paying for care even more out of their reach.”
Care England, which represents care homes, lambasted the government for the crisis in the industry, accusing ministers of not having a strategy for older adult care and allowing local authorities to pay well below the cost of care for residents with state funding.
Martin Green, the chief executive of Care England, said: “I have great sympathy [for residents]. There is a dynamic in this called ageism. Why is it that when you get old and get a disease called dementia, you have to pay for it? I don’t know how in the age of the Equality Act you have older people having to pay for a service that younger people get for free.
“The government needs to have a proper approach to social care. Just pumping money into the NHS isn’t going to work. They need a clear approach, saying that this is what good social care costs. The government needs to show a bit of leadership, I am sick of them hiding behind localism and saying it is about local councils.”
Some local authorities are paying just £330 a week for residents, the equivalent of less than £2 an hour. Industry research has shown that private residents now pay 40% more on average than publicly funded residents for like-for-like service.
Roughly two fifths of care homes residents are private, with another two fifths funded by the state. The remaining residents include those who pay fees but are topped up by local authorities and residents who are funded by the NHS.
Prestige Nursing offers home-care services for older people, but Green said this was not an alternative for people with dementia or other conditions who needed round-the-clock care.
He added: “I think they are pitching to say, ‘People don’t need to be in care homes and we can provide these things much cheaper.’ But actually, these people are in care homes because they can’t be at home.”
Green said it was ridiculous to blame the rising fees and the funding crunch in the industry on private companies. He said state-run social care had been of a “low quality and expensive” before private companies expanded into the market. “The government is not stepping up to the mark,” he added.
Tim Hammond, the chief executive of Four Seasons, said: “It is widely recognised that there is underfunding of social care for both care homes and home care.
“The average local authority weekly fee last year for a care home place was around £560 a week, which equates to about £3.30 an hour to cover 24/7 care, including nursing or dementia care, accommodation, mostly in rooms with en-suite facilities, meals, heating, lighting, laundry.
“As a result of funding constraints, the fees that local authorities pay for care have declined 5% in real terms over the past three or four years. According to independent analysis they are below the fair cost of the care being provided.”
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