Heather Jameson 18 May 2020

Care home on the brink of collapse

Care homes in the North East have issued a legal warning to North Tyneside council, claiming they could collapse within days without further funding.

Care North East, a firm which represents 21 care homes in North Tyneside has declared a ‘force majeure’, which effectively breaks the terms of the contract due to a major event.

In a letter to the council, the care firm has accused the council of failing to provide the money to support care homes and meet the extra costs of the coronavirus pandemic, Sky News has reported.

But the council claims that care homes were given a 5% increase in April along with a further 5% to deal with the pandemic.

In the official warning, it says: ‘This letter stands as our client's formal notice to the council that the care home market within North Tyneside is facing imminent collapse due to the council's conduct in the lead up to and during the current coronavirus pandemic.

‘The council has through its own sustained actions over a number of years, weakened and undermined the sustainability of the care home market; such that the market is incapable of withstanding the costs and effects of Covid-19.’

‘As vacancies increase due to deaths, with fewer and fewer (if any) new admissions, the running of homes within North Tyneside is becoming increasingly unsustainable.’

Jacqui Old, director of children's and adult services at North Tyneside Council, said: ‘We recognise there are additional pressures on North Tyneside’s care sector during the pandemic.

‘The sector is hugely important to us and we have listened to the concerns of our providers to see what extra funding and support they may need, as the crisis continues; we are working hard together to keep staff and residents safe.

‘In April, in line with many other local authorities, we provided a 5% increase in funding along with an additional 5% to cover other Covid-19 costs.

‘In addition to this we are discussing additional bespoke financial support to care homes.

Tiffany Cloynes considers force majeure provisions in contracts, but points out that they may not always be the most attractive options available to councils trying to ensure continuity of important services (£).

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