Birmingham care homes face income slump after council sets new fees
Owners of Birmingham’s private care homes say they are facing “financial suicide” after the city council increased fees by only one per cent.
The decision means the amount the homes get to look after local authority clients will rise by just 49p a day for a single room. Describing the offer as “unsustainable”, the organisation representing private care home owners is demanding urgent talks with social services bosses.
Birmingham Care Consortium secretary Les Latcham accused the council of behaving unreasonably and said his members would refuse to sign new contracts.
He pointed out that the council is behaving far more generously when it comes to funding its own homes, where budgets are rising by 6.7 per cent.
From this month, the council will pay £525 a week to accommodate an elderly person in one of its own homes and £350 for a bed in a private home.
With private homes providing 85 per cent of elderly care in Birmingham, BCC’s stance is likely to make a shortage of residential care even worse and may result in elderly people “blocking beds” in hospital because places in homes cannot be found for them.
In a letter to councillors and MPs, Mr Latcham said: “Social services in Birmingham have a shortfall of approximately 800 beds, are closing their own homes and appear hell-bent on putting the private sector out of business.
“They are burying their heads in the sand as usual, refusing to have a partnership discussion with the Birmingham Care Consortium. The private care homes are being forced under duress to sign an unsustainable contract that will be financial suicide.”
Mr Latcham said the council had offered BCC members a one per cent increase now and a further one per cent in October, but was insisting homes sign a two-year contract with an option of a further two years in 2011 “without mention of any further increase in fees”.
The letter added: “Birmingham Social Services have always said that we are a partnership, we have now found out what most of us always believed, that the partnership does not exist and it is a case of no meaningful negotiation or consultation.”
Last month, the council announced that a cash crisis had forced it to postpone plans to build six modern care centres for elderly people, although it intends to go ahead with closing all of Birmingham’s outdated local authority old people’s homes. Council leaders promised to make £1million available to private sector care homes to help improve the services they offer.
The council’s strategic director for adults and communities, Peter Hay, said: “If independent providers refuse to sign the contract, then we don’t place residents with them. We believe this is the responsible approach We doubt people would feel confident placing their loved one in a care home, using public money, where the owners had refused to sign a contract with the local council.”
Mr Hay said the council was looking at ways it might be able to help homes suffering financial problems.