Laura Sharman 18 March 2022

Care homes could face 'widespread closures' under reforms, counties warn

Care homes could face widespread closures under reforms, counties warn image
Image: Halfpoint /

Care homes are at risk of closure as the Government has ‘seriously underestimated’ the cost of its social care reforms, county councils have warned today.

A new report by LaingBuisson for the County Councils Network (CCN), reveals that an extra £854m a year is needed to pay for adult social care charging reforms.

The report examined the cost of proposals to make care fees fairer between private and state fee payers, and the introduction of a new ‘Fair Cost of Care’ to increase fees paid by councils.

The Government has allocated £378m per year for councils to pay this new Fair Cost of Care, but the report warns an additional £854m a year is needed to make the proposals workable.

It argued that without the extra funding there would be a ‘severe sustainability risk’ to care homes across the country.

Cllr Martin Tett, adult social care spokesperson for CCN, said: ‘At the present funding level, these proposals could have a serious impact on the care sector across the country, leading to widespread care home closures and a rationing of care for the hundreds of thousands of people who need it each year.

’Councils will be left between a rock and a hard place – either by raising council tax to excessive levels and cutting local services, or by seeing widespread care home closures in their areas.’

CCN is calling on the Government to bring forward funding for local government in the Health and Social Care Levy, to pay for the additional £854m a year required.

Cllr David Fothergill, chair of the Local Government Association’s Community Wellbeing Board said: ‘Many councils have approached us regarding these reforms and this timely report clearly highlights the risk to care homes. We remain clear that under-funded reforms also pose a risk to the overall financial viability of some councils as they stand now.’

A Department of Health and Social Care spokesperson said: 'We recognise that the type of genuinely transformational change set out in our White Paper, People at the Heart of Care, cannot be accomplished overnight so we are providing £1.36bn over the next three years to support local authorities to make significant progress towards paying providers a fair rate of care. This includes £162m in 2022-23, followed by £600m in each of the following two years.

'As part of our gradual implementation, we will review our approach ahead of allocating money for 2023-24, working closely with local authorities and providers to monitor market changes, and determine appropriate grant conditions, guidance, and distribution mechanisms.'

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