Care Home Operators at Risk after Council Freezes the Fee: Laing and Buisson

Care-HomeThe local authorities across England have either frozen or reduced the care home fees, notified a healthcare market analysts, Laing and Buisson.

For the year 2011-12 the average fee increase will be of 0.3%. This will be considered as a major cut, as the operators expected the rise of 2.8% due to cost inflation in the sector. Therefore, the care home operators will observe a
2.5 per cent drop in the margins.

Some of the operators will have to bring down the staffing cost to handle the situation along with the weakening of service.

In UK, there are around 11,000 care homes that look after the 380,000 residents and among these, half of the people get their fees paid by the local authorities. According to the survey, among 208 councils, 140 have frozen or reduced the fees for this year. However, 18 had raised the fee which is quite less to meet the increased costs and only 7 of them, situated in Wales has raised the fee above 3%.

Laing and Buisson Chief Executive, William Laing stated, “As the news of Southern Cross’s demise sinks in, the care home sector will have to think hard about its response to real terms cuts in local authority fees”.