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By Debbie le Quesne

Response to the ‘scandal of secret mark-ups’

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The Telegraph calls it the scandal of the secret mark-ups – the difference between care fees paid by local authorities to care homes and those paid by self-funders.

Figures are published show “on average those people who fund their own care – because they do not qualify for assistance from their local authority – pay on average 13pc above the ‘real cost’ of providing their care, in England.”

Richard Dyson, author of the report writes: “The ‘real cost’ figure, which is generated from in-depth research into the constituent costs of providing food, accommodation and basic help, also includes a reasonable profit margin for the care home operator.”

And he adds: “The price paid by a local authority on behalf of someone who does qualify for State help is lower than this ‘real cost’.”

More weight is added to the article from charity Independent Age, which this week published a report saying that middle-class residents with modest property or other assets, who are thus forced to pay for their own care, are subsidising those paid for out of a public purse.

I’m sure you can image the feedback on this report is robust and no venom is spared.

And yes, I’m equally convinced as the newspaper says “the figures will make uncomfortable reading for about 210,000 individuals, and their families, who are in the position of paying all or most of their care home fees,” especially when data is presented in this way.

Dyson writes: “Under current rules, individuals in England must ‘self-fund’ or pay their care home fees in full, with no help from the council, if their assets, including their homes, are worth more than £23,250.”

One has to ask: Who made the rules? Care providers? No.

The article says cost discrepancy “creates resentment and anger.” True, but so does the fact that care providers are not offered a proper rate to pay for caring, turn a profit and be future proof, pay for business maintenance and investment.

The figures differ by region, the piece says and they certainly do. On average, in England, the cost of providing residential care, including the care home operator’s slice of profit, is worked out at £563 per week, according to Valuing Care, the marketing analysis consultancy which provided the Telegraph information.

I quote: “Based on the English average, that would mean the fees paid by a local authority on behalf of someone qualifying for help would be as little as £507 per week – compared with the self-funder’s £636.

But in the Midlands there is a very different set of figures. Local authority rates include: Birmingham – £405.00, Dudley – £390.00, Sandwell – 378.00, Shropshire – £381.20, Staffordshire – £400.00, Walsall – £365.10. Warwickshire – £365.10, Wolverhampton – £379.53, and Worcestershire – £410.00.

A snapshot average here works out at £384.99, a figure well short of the £486 per week average published in the Telegraph.

I quote: “In general, according to Valuing Care, local authorities use their bulk-buying power to push down care home rates to between 5-10pc below the ‘real cost’ figure.

“Based on the English average, that would mean the fees paid by a local authority on behalf of someone qualifying for help would be as little as £486 per week – compared with the self-funder’s £636.”

Members of the West Midlands Care Association would indeed be very happy with an average residential fee of £486 paid to them by local authorities. I am struggling to see how it now appears that the West Midlands is not at all representative of the national picture, given the Telegraph ‘facts’.

You can image I am now chasing national data as an extra £100 to my members could represent huge improvements in staffing, re-investment and, dare I say it, profit.

Historically the private sector has provided the care pool which local authorities have not and today the demand is increasing. Government is strident in its approach to use the private providers to roll out its care reforms and our MPs support a free market economy too.

Local authority community care is systematically been hived off to the private sectors all over the country and homes are closing still.

I don’t doubt there are ‘victims’ in this system, but I have to ask: In real-world terms how is it going to change? The moral debate can go on at infinitum, but if there’s a niche for say, top-end care provided in luxurious ‘hotel style accommodation’, who are we to condemn?

As for cross subsidising between self-funders and social services paid candidates, yes it does go on – and in many cases it must to make up the hefty shortfall on fees paid by local authorities. The pain of reality is hurtful, but that’s the world most of us inhabit.

Ray Hart of Valuing Care is quoted in the Telegraph as saying: “There is no clear explanation of the difference in fees between self-funders and those who are looked after at the state’s expense. Are the self-funders effectively subsidising those paid for by the local authority, because the local authority is not paying enough? Or are care homes simply using self-funders as a means of generating profit? Either way it does not seem right.”

No answer is simplistic.

Fact: Self-funders are often the difference between keeping a home open or it closing as a non-viable business model.

Fact: Without them many homes in the UK would close and an already over-stretched care provision made more acute.

Fact: Self-funders do help keep residential care services, which the government wants to use, in business.

Fact: The ‘system’ the rules and ‘the way it is’ have not been established by care providers, but rather by successive governments, so please don’t levy all the blame at those who are providers.

Fact: The moral debate can find answers only in Utopia, ironically meaning in the original Greek ‘no place’ before in common use coming to represent ‘good place’.

Fact: I know many of my West Midland Care Association members personally. They are not money-grabbing millionaires who view their residents as a commodity. They are good people doing the very best they can in sometimes-impossible financial situations. They are passionate about good care and desire above all things to deliver it. And does the government help them? Frankly – no, but it’s very happy to use them, decanting its direct responsibility for caring into a third party provider.

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