Bosses blame Living Wage as dementia care homes face uncertain future over funding fears
Three specialist dementia nursing homes in South Tyneside are facing an uncertain future after funding fears sparked a financial review at a national care operator.
Four Seasons Health Care, which runs The Lodge Residential Care Home and Chichester Court Care Home, South Shields, and Meadows Care Home, in Boldon, is reviewing its operations as it faces a huge increase in costs over plans to boost the national living wage next year
All three care homes run by Four Seasons in the borough provide vital dementia care.
The fees that local authorities pay to homes to provide care support for residents have also fallen by five per cent in the last five years - putting a further strain on an operator which has lost £25m in the three months to June.
Bosses at Four Seasons, which looks after 20,000 patients at 450 nursing homes across the country, have already voiced fears over the impact of a national living wage on its services.
They joined Bupa UK, HC-One, Care UK and Barchester, in penning a letter to Chancellor George Osborne warning the extra costs could lead to home closures.
About 40 per cent of workers at care homes currently earn the minimum wage.
In his latest budget, Chancellor George Osborne announced firms will be required to pay a minimum of £9 an hour by 2020.
The first increase will be introduced in April 2016, however, when workers will receive £7.20 an hour.That compares favourably to the current £6.50 an hour minimum wage for over 21s.
Care homes are calling for funding support from the Government to help them meet the costs of mass wage increases.
Mr Osborne has agreed to consider their concerns, but a review into all operations has been launched by Four Seasons in order to discuss possible options if the funding support is not forthcoming, which colud include selling off or even closing sites.
Just 85 per cent of rooms at Four Seasons care homes are currently occupied - while the firm is also trying to get to grips with a £500m debt.
The news is a fresh blow for the care home sector in South Tyneside.
Oakdale Lodge Care Home, in Stanhope Road, South Shields, is to close this month after its operators Orchard Care Homes announced it ‘had no future’ as a care home.
Over 20 residents - many suffering with dementia - have had to find new homes throughout the borough.
A spokesman for Four Seasons Health Care declined to comment.
‘Unintended consequences’ of plan
Care England, a body representing independent care providers, wrote to Chancellor of the Exchequer, George Osborne (pictured right), to warm of the ‘unitended consequences’ of the national living wage strategy.
Martin Green, Chief Executive of Care England, said: “I am writing to express my support for your decision to develop a national living wage, but also to warn you of some of the unintended consequences this might have for the care sector and the NHS.
Care providers are receiving totally inadequate levels of funding from local authorities, in some areas this amounts to as little as £2.80 per hour, for residential care to some of the most vulnerable older people.
In recent years, the sector has received either below inflation rate increases, or no increase at all, and it is not possible to deliver much more, unless we have a proper funding settlement from the local authorities.
Your recent announcement of wage increases came on top of auto-enrolment and increases in regulatory fees, all of which have put enormous burdens on the care sector.
If we are not properly funded we will see a reduction in care providers and this will have a significant impact on the NHS, and the money that you have promised them, will not be adequate to meet the demand.
We understand that you are committed to deficit reduction, and as businesses we applaud this.
“However, we do
not believe that in ignoring social care, whilst protecting health, you are getting the best value for the taxpayers money.”
I personally think it was very wrong to close local care homes which were run by local councils.
I say this because these care homes were not run for profit, or shareholders, they were run for those who needed the care.
These days everyone seems to want to make a profit for the shareholders, rather than ploughing it back into the service.
To me it's wrong when the elderly and those with dementia etc, have to pay for care when they have worked all of their lives and have paid their taxes.
Not just that, but many of the staff in care homes are not trained to look after people with illnesses like dementia.
They get a basic wage and little training and that is very wrong.
It's a basic right to be looked after by trained staff, who can treat those with the illness with the care, respect and dignity that everyone else takes as a right these days. But to do this you really have to pay these staff a good wage and has to be more that the basic living wage.
I do feel that the government should step in now and show some guts, to ensure that the care system does not fail now.