December 7 2013 Latest news:
Tuesday, October 22, 2013
Fears have been voiced over the financial health of private care home owners and the risk they might pose to the people they are looking after on behalf of Essex County Council (ECC).
UKIP county councillor for Bocking, Gordon Helm, raised the issue after a report showed that one in three UK care home companies are at an above average risk of financial failure. The research was carried out by a firm called Company Watch, which looked at the finances of almost 5,000 care home companies, together responsible for an estimated 20,000 care homes operating in the UK.
Mr Helm says the findings should prompt Essex County Council to look closer at the viability of the private care home providers it works with, but council chiefs say adequate safeguards are already in place.
Mr Helm said: “Most leading care home owners have highly complex structures and loan arrangements making it difficult for local authorities to properly assess underlying risks. But, if we are going to outsource more of our responsibilities to the private sector we need good governance, we need to know that the services provided are fit for purpose and, in the case of care for the elderly, we need to know what we will do if care homes in Essex fail due to insolvency.”
His comments come in the wake of the bankruptcy of care home provider Southern Cross in 2011, which Mr Helm says highlighted “how little financial scrutiny there is of companies paid huge amounts of public money to look after the country’s most vulnerable.”
John Aldridge, the county counci’s cabinet member for adult and social care, said the authority works with 405 homes who care for 6,000 people for the council. For each placement, providers receive on average around £400 per week from ECC for this service.
And, according to Mr Aldridge, there are a number of checks that help keep tabs on their finances.
He said: “We get information on financial trends in the sector from consultants and also have a contract with providers which states they are obliged to tell us if they have financial concerns.
“In addition, the Care Quality Commission now have to look over the financial viability of providers and report to us.”
He added that ECC has found an additional £8m this year to spend on providers who have demonstrated quality improvements – a move welcomed by Essex Independent Care Association chairman, Clive Weir.
Mr Weir said to remain viable most care home providers look after a mix of private residents and people paid for by the local authority.
He added: “Care homes who rely solely on payment from local authorities are really struggling since the rate paid for care has not gone up but the cost of running a care home has increased in recent years.”