Government spending accused of causing nursing home funding shortfall

Cutting government grants to local authorities has been responsible for causing a financial scandal in nursing home funding, according to new research from the National Audit Office (NAO).

Already widely recognised as causing a similar funding shortfall in social care, the NAO now have figures that show how nursing homes have been put at risk because of real terms cuts.

As Frank Ursell, chief executive of the Registered Nursing Home Association, explains: “The National Audit Office has calculated that between 2009/10 and 2013/14 the rates that local authorities pay for care home places increased by 5% less than the costs incurred, with around half of all directors of adult social services admitting that care homes in their areas are facing financial difficulties.”

He continues: “The NAO has also confirmed another scandal created by the cuts in government grants to local authorities that have in turn led to cuts in the value of fees they pay to care homes. Its report highlights the fact individuals who have to meet the care costs out of their own pockets end up paying more than the local authorities are paying for those who qualify for public funding. This enforced cross-subsidisation is wrong – yet further evidence of the negative impact of current government policies.

“The NAO acknowledges that some local authorities do try to take account of care homes’ costs when setting their fees, which means that some do not. A number of recent court judgements in different parts of the country have found that this is unlawful. So we have a situation in which government cuts in public expenditure are forcing some councils to break the law by turning a blind eye to the economic realities of providing care. What a tangled web this is, and what an indictment on the whole system of funding.”