SUNDAY EXPRESS - DECISION MAKERS

Val Gooding, chief executive of BUPA, calls for increased funding for long term care.

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Care of the elderly is animportant and emotive issue, particularly for those who have ageing parents orrelatives. We must look after ourelderly. Today more than 500,000 peopleare cared for in care homes, yet long term care is being threatened because ofinadequate funding. This is not justthe view of those involved in care of the elderly, but of independent observerstoo. It is now widely acknowledged thatthe long term care sector is in crisis.

In the past five years over50,000 registered beds have been lost as a result of increasing costs, newregulations and unsustainable levels of funding. Last year alone more than 750 care homes closed. This is not because care home operators have cashed in their chips, taken huge profits and retired to a life of luxury. The majority are smaller home owners who, after devoting many years to caring for the elderly in their locality, have finally found that they simply cannot make their business pay.

This pressure on the care homes sector has a much broaderimpact too. Care homes play anessential role in health provision in the UK, providing intermediate, respiteand long term care which eases some pressure on NHS acute services. Very personal experiences highlighted in the media reflect the consequences of care home closures, including a continued shortage of hospital beds, bed-blocking and increased waiting times for routine operations.

So why are costs spiralling? Care home operators have welcomed the introduction of nationalstandards to ensure a consistent quality of care is delivered across theUK. However, complying with theseregulations has required long term commitment from providers and a high levelof investment to improve facilities. In some cases, particularly for smaller care home owners, this level of investment has contributed to the financial pressures under which they operate.

Obviously the sector must also retain and attract the best people to provide the best possible care. Yet the National Minimum Wage, the working time directive and NHS pay awards have caused staffing costs to rise substantially. The recent increase in National Insurance, which we estimate will cost the sector £50 million in 2003/2004, will exacerbate the situation still further.

Together these pressures mean costs have risen by morethan seven per cent a year, whilst funding from local authorities has increasedby only two per cent. This issignificant because two thirds of people in care homes are looked after onbehalf of local authorities.

A recent report by the Joseph Rowntree Foundation suggeststhat for each care home resident they fund councils pay on average between 74and 85 a week below the reasonable costs of running an efficient home. It alsosaid the care home sector now faces a funding shortfall of 1 billion ayear. This is what lies at the heart of the problem. This is why so many care homes are closing.

Some action is beingtaken. The Government has committed toincrease social services spending by six per cent in real terms in each of thenext three years. This will allow urgentlyneeded funding to be directed into intermediate and long term care. But it is not enough. Realistically an annual 10 per cent increase in funding is required to address the shortfall and put the care home sector on a firm footing.

In the past, increases in personal social servicesspending at central government level have not always been passed on fully atlocal level and reflected in local authority fee increases. If the money earmarked for long term care were ring-fenced, local authorities would have to ensure that funding received from Government reaches the care home sector for which it is intended.

Funding for long term care must be increased significantlyto address the shortfall in fees and stem the tide of nursing homeclosures. And local authorities mustensure that funding reaches care homes and fees are set at realistic andsustainable levels. This will encourageproviders to innovate and improve services, not simply provide care at thelowest possible cost. Most importantly, increased funding for long term care will begin to relieve some of the pressure on the NHS and ensure Britains older people receive the quality care they need and deserve.