Headlines: November 12th, 2015

ResPublica, the indpendant thinktank, warns that the NHS faces a £3 billion bill as residential care homes shut their doors forcing hospitals to care for the elderly.

In The Care Collapse: The imminent crisis in residential care and its impact on the NHS, ResPublica says within 5 years residential care homes could lose a staggering 37, 000 beds meaning the NHS would have to find extra billions to care for those patients who are no longer in care and can’t go elsewhere.

The authors say the looming crisis has echoes of the 2011 collapse of Britain’s largest care homes operator, Southern Cross Healthcare, which ran 750 care homes.

Director of ResPublica, Phillip Blond, said: “When Southern Cross failed the private sector stepped in and cared for those left homeless. Now, however, with the sector losing money for every funded resident there is no provider of last resort. We fear the worst case scenario is the most likely, that these residents will flood our local general hospitals costing £3 billion per year by 2020.”

ResPublica predicts the National Living Wage, which will be brought in on 1st April 2016, will also cause significant financial harm to the residential care sector.

The report says by 2020/21 the residential care sector will need an extra £1.1 billion to meet demand. £382 million, or one third of this figure, will be for the rise in staff pay because of the National Living Wage.

Staff costs are estimated to be between 60-80% of the total cost of caring for a patient in a residential home.

Report author Emily Crawford said: “The National Living Wage is a great step forward. It is estimated it could help more than 6 million low paid workers. But for the care sector, which is heavily reliant on its labour force, it could be catastrophic.”

“By 2020/21 we predict that a third of the funding gap will be because of the rise in the cost of paying staff the National Living Wage.”

Mr Blond added: “The National Living Wage must be brought in. It is essential working people are paid a proper wage. At the same time it will damage the residential care sector which is already under extreme pressure and it could collapse as a result.”