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Care Aware Comment - Tackling care fee inequality to undermine care home viability

The Government has announced that it intends to address the unfairness of a system that requires self-funders to pay more for their care than those funded by the state……

It plans to do this by implementing section 18(3) of the Care Act 2014 which requires councils to arrange care in a care home for those self-funders with eligible needs who request that they do so.

This is intended to enable councils to take advantage of their bulk purchasing power to secure lower rates for self-funders with the aim that the costs paid by self-funders and the state will converge.

Care Aware comment:

"We expect this to have a significant impact on providers, many of whom rely on using higher self-funder fees to cross-subsidise the costs of state-funded residents. The Government has said that its £5.4bn funding package includes money for councils to move towards paying a “fair rate for care”, What isn’t clear is if it expects local authorities to increase the fees they pay care homes of for those paid for self-funders to reduce.

We don’t see how the available funds can achieve a meaningful increase in local authority care rates and a reduction in self-funded fees risks further undermining the financial viability of many care providers."


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