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98% of residential home care providers do not believe they are paid enough by local councils to be able to meet public expectations of quality, a new survey by Labour has found.

92% say that pressure on residential care providers because of low council fees is creating a two-tier market for residential care, as new investment is directed at wealthier areas of the country with higher proportions of people who are able to self-fund their care.

94% of providers report that council-funded residents are typically older, with higher levels of need and surviving for shorter periods than they used to.

Labour surveyed members of the National Care Forum and English Community Care Association, which represent care providers in the voluntary, private and not for profit sectors.  Responses were received from organisations that provide approximately 10% of adult residential care home beds in England.

Compared to 2009/10, these providers report an average cut in local council fees across 2010/11 and 2011/12 of 0.1% in cash terms, despite high rates of inflation. This means there has been a significant real terms cut in local council fees for residential care over the last 2 years.

As a result:

  • 82% of residential care providers say self-funders are being charged more to cross-subsidise council-funded residents
  • 60% say they are reducing the proportion of beds for council-funded residents, or anticipate to do so.
  • 70% say that low council fees are preventing them from investing in residential care home facilities


Liz Kendall MP, Labour's Shadow Minister for Care and Older People, said:


“This survey provides yet more evidence that our care system is in crisis. More than £1 billion has been cut from local council budgets for older people’s social care since the Tory-led Government came to power.  Councils are being forced to pass on these cuts to care providers. This is having a devastating effect, with some of the most vulnerable people in society facing a two-tier service or being forced to pay more for care they desperately need.

“The Prime Minister must act urgently to tackle the care crisis. Labour is calling for legislation in this Parliament on a new system for funding social care. Older and disabled people and their families cannot wait any longer for this vital issue to be addressed.”

Des Kelly, Executive Director of the National Care Forum, said:

“These results confirm the significant challenges faced by all care providers seeking to meet rising expectations of quality standards whilst also developing new, more personalised, services.

“It is clear that services are being substantially shaped by the pressures on public finances which bring increasing risk of a polarised or ‘two-tier’ market for care and support. There is an urgent need to resolve the growing crisis in funding of care and support services so that individuals as well as providers can appropriately plan for the future.”

Martin Green, Chief Executive of the English Community Care Association and Chair of the Care Providers Alliance, said:

“Labour’s Residential Care Survey has highlighted the serious pressures that are being placed on residential care providers. It is clear from the results that services are seriously underfunded and that self-funders are being required to cross subsidise because of the low levels of government funding.

“The most worrying aspect of the survey is that many care providers believe that we are creating a two tier market, and this cannot be right in a society that should be advocating for fairness and equality of access to care services."

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