£10,000 care ‘stealth tax’

PRIVATE care home residents are paying nearly £10,000 a year to subsidise local authority patients because councils cannot afford their bills, MPs have found.

A report by the House of Commons communities and local government committee found 96 per cent of people who paid for private care were unknowingly spending an average of 43 per cent more than their state-funded neighbours for the same service.

Critics said it amounted to a “stealth tax” on private residents. The average cost of a private care home in the UK is around £31,000 a year, but the report suggests it should be closer to £22,000 if private residents were not having to meet the council shortfall. The committee said it was unacceptable that

private individuals were picking up the bill for council deficits.

Committee chairman, Clive Betts MP, said: “In many cases, councils will not be meeting the cost of their residents at all and constantly renegotiating down how much they are willing to spend. So, care providers have no choice but to find the money from private residents.

“A long-term fix, working on a crossparty basis and involving the public and social care sector, is urgently necessary.”

MPs found that care providers, including the Kent Integrated Care Alliance and Brunelcare, were told by councils to raise their private rates “to subsidise the socially funded provision”.

Stephen Burke, director of the Good Care Guide and United for All Ages, said: “This is a stealth tax on people who fund their own care home places.

“The care system is so underfunded some homes only make ends meet by cross-subsidising state funded residents.”

MPs warned that the Government’s pledge to provide an additional £2 billion for social care over the next three years falls short of the amount required to close the funding gap and advise implementing a new social care tax, similar to Germany, where around 1 per cent of salary goes to fund future social care and is matched by employers.

“I think if Britons knew that the money was being spent on social care they would be happy for it to be taken,” said Mr Betts,

The report found that more than a quarter (28 per cent) of care services are inadequate or need improvements, and just one in 12 adult social care directors was fully confident their local authority can meet their statutory duties.

Care providers told MPs that they were being “pushed to the brink of financial viability” by council cost cutting, with many forced to exit the market and hand back contracts.

The committee warned that councils are increasingly taking a “price first, quality second approach” in their commissioning.