Care homes crisis looms as selling to developers ‘is more profitable’

BRITAIN is facing a shortage of care homes because it is becoming more profitable to close them and sell the buildings to property developers, the Chancellor was warned yesterday.

Elderly and disabled people will increasingly be forced to turn to hospitals for care that would previously have been available in the community, said social services directors.

Private care providers, council care bosses, charities and NHS groups have joined forces to issue a plea to George Osborne to increase investment.

The group said that council care budgets have been squeezed so tightly that many care home operators are questioning whether they have viable businesses.

Combined with a booming property market in many areas, it could result in many care homes, especially the smaller ones, disappearing.

The warning was made in a submission to the Treasury ahead of the Government’s spending review from the Association of Directors of Adult Social Services, the Care Providers’ Alliance and the NHS Confederation.

The care budget for elderly and disabled people in England is £13.4 billion – a fraction of the £115.4 billion allocated to the NHS, which has been protect- ed from cuts. Local authorities estimate that the care sector in England would need another £1.4 billion a year to avert a crisis. This figure includes paying for the proposed National Living Wage.

Currently, 17 per cent of people over the age of 85 are in residential care and by 2031 there are expected to be 4.2 million people in that age group, suggesting around 470,000 care home beds will be needed by that time.

At present there are only 420,000 beds and the care industry predicts that could fall sharply as individual operators reassess their options.

Frank Ursell, of the Care Providers’ Alliance, said many of the smaller home operators “have got a building which is probably of greater value to the residential market than it is as a business”.

A reduction in privately run nursing home beds would lead to a greater demand for NHS nursing care, he warned.

Vicky McDermott, of the Care and Support Alliance, which represents 75 charities, said: “If we don’t do something, we are going to end up in a real crisis. I don’t want to sound sensationalist about this but actually if we don’t do something people will die, people will be very ill. The impact on the NHS will be significant.”

Edi Truell, a City financier, has warned in a report to the Treasury that the NHS faces a half-trillion-pound pension deficit, The Times reported.