A Local Authority tax on Self Funders?
Research published this week by the Economic & Social Research Council at the University of East Anglia uncovers a worrying trend in which local authorities may be driving up the cost of care for private ’self-funding’ care home residents.
In effect, ’self-funders’ are being asked to pay more, so that local authorities can pay less. This is effectively a tax on those that are paying for their own care. It is also possibly short sighted in that most self funders have limited assets and will require future local authority funding if their private fees rise too fast.
A copy of the report can be downloaded from UEA here
The report states...
In a paper published by the ESRC Centre for Competition Policy at UEA, Professor Ruth Hancock and Professor Morten Hviid argue that those in the ‘squeezed middle’ - people no longer willing or able to pay the increased price but not eligible for support - will be the big losers. Those who can still afford to self-fund will also have to pay a higher price. The study also suggests policy issues in relation to possible reforms to the care funding system.
"An important lesson from the care home market is that where the public sector purchases alongside private buyers, urging the public sector to use its buying power may lead to unintended consequences for the price that private purchasers pay," added Prof Hviid.
Exercising their buyer power enables local authorities to spend less on care home places, and so more on other services, or to buy more places. The cost of this is borne by self-funding care home residents and the authors question whether they are the appropriate group to be paying for this
The Eastern Daily Press ran this story on Monday and included an interview with Tim Leadbeater, chairman of the Norfolk branch of the Nursing Homes Association. He believes that many care home staff are shouldering the financial burden created by local authority deals which often mean that care is being purchased for below cost price. He believes that the practice is wrong and that charges should rise to reflect the true cost of the care being provided.
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