Care firm 'pulls plug' on £7m care home and 150 new jobs over council funding

A care home owner has admitted he had to ‘pull the plug’ on £7m plans to open a fourth care home with 96 beds in Wales and the chance to create 150 new jobs because of poor funding from councils.

Mohammad Mazhar Ali, who runs Wellcome Care Homes which operates three homes in Caerphilly, Ceredigion and Carmarthenshire, has said ‘scores of care homes’ in Wales will go bust and be forced to shut unless there is a significant increase in funding from local councils.

In Wales, the fees and the pay rates for care workers are determined by councils who used set formulas to calculate them. In Ceredigion, the standard rate is as low as £605 per week - equating to £86.42 per day.

At the same time, the care provider says he had to absorb a 14 per cent increase in his wage bill due to the extra costs associated with Covid.

Mr Ali says care providers in Wales are struggling to balance the books and as a result, many care workers are living on the minimum wage which he fears will lead to many staff turning their back on the sector and looking for better paid jobs elsewhere.

'In years to come there will not be many care homes left'

Mohammad Mazher Ali, who has run Wellcome Care Homes with his business partner Syed Ali since 2013, said: "If nothing is done about this then I am worried that in years to come there will not be many care homes left."

"It is very challenging and difficult to do everything we do when the fees are so low.

"We provide accommodation and care and the residents have three meals a day. The staff administer medication and keep the residents engaged with activities, with services provided 24 hours a day. The fees need to be a lot higher to cover the costs of everything we do."

It’s ‘unfair’ that quarantine hotels get a higher fee

Mr Ali is urging the Welsh Government to step in and make sure care workers can be paid a minimum of £11 per hour, recognising the importance of their work and the long hours they put in

He calls it “unfair” that the UK Government's quarantine hotels scheme - which sees arrivals from 33 high-risk countries having to isolate in a hotel for 10 days - involves a fee being paid of £175 per night.

“I am bemused why this figure is significantly higher than the amount our homes receive for providing vital care for residents. We are providing a larger and more comprehensive service than the hotels and looking after the most vulnerable in society," said Mazhar.

"How can it be fair that the hotels are paid so much more? We are working tirelessly to save lives.

"The minimum paid for care per day should not be less than the £175 that the hotels are receiving."

Care homes have a legal obligation to provide care for individuals under the Social Services Wellbeing (Wales) Act 2014. He believes local authorities must vary the fees paid based upon dependency levels.

Wellcome's three homes are Annedd in Llanybydder, Carmarthenshire; Blaendyffryn Hall Nursing Home in Llandysul, Ceredigion; and Try-Celyn Court in Newbridge, Caerphilly.

Covid impact: 'I can see care homes saying somebody is too frail to take them on'

The care home owner fears care homes may reluctantly have to turn away potential residents with significant needs if there is not a shift from a 'one size fits all' approach to funding which does not take into account the dependency levels of individuals.

His concerns have been heightened by the impact of Covid outbreaks at the homes. Mr Ali said: "People are now coming into homes who are more frail and have complex needs. If somebody has a high level of need then this is clearly going to cost more.

"We have had Covid outbreaks at our homes. Although we have come out the other side and thankfully the majority of our residents have survived, many are not the same as before.

"Their level of dependency has increased. This results in extra staffing costs.

"However, we do not get any extra funding to cover these increases in costs.

"If there is not a change then I can see care homes saying somebody is too frail to take them on. The system needs to be changed."

Mr Ali’s comments come after Care Forum Wales highlighted the low care home fees paid by local authorities in Wales and pushed for carers to receive improved salaries.

Last year, Care Forum Wales, which represents nearly 500 independent care providers, launched a campaign to ensure qualified staff who work in care homes and domiciliary care in Wales are paid a minimum of £20,000 a year.

Mario Kreft, the chair of Care Forum Wales, said: “The plight of Wellcome Care Homes in being forced to shelve their plans for a new care home which would have created 150 new jobs is yet another example of the urgency of the situation.

“If we carry on doing what we’ve done for the past quarter of a century we will make no progress and Wales will be poorer for it. The First Minister rightly pointed out that social care was in a very fragile state even before the pandemic began.

“The reason the sector is so chronically underfunded is that we have had local authorities managing the market for a generation, particularly in relation to care homes, and it was a disaster from the word go because they put cost before quality."

Mr Kreft believes the Welsh government needs to ditch the current postcode lottery and have a new national strategy with certain things like minimum fees set centrally, just like minimum standards, enabling providers to pay the real living wage to all qualified social care workers.

Mr Kreft added: “As Einstein pointed out, insanity is doing the same thing over and over and expecting different results.”