Private nursing homes say they could be forced to close because of the cost of the minimum wage and new limits on public funding.
The Registered Nursing Homes Association, which represents more than 1,000 nursing homes in Britain, said the burden of new regulations was forcing owners to raise their fees to try to cover their costs.
Frank Ursell, its chief executive officer, said a range of new legislation, from minimum wage limits, which affect staff salaries, to limits on public funding for nursing home places, had combined to deal nursing home owners a double blow.
He said: "The basic choice we have is either we close or we find another way of getting the increased fees. The Government have made a hash of free nursing care and they are trying to find someone to blame for getting it wrong."
The Health minister Jacqui Smith said the Government's free nursing care initiative was "working for very many people. We have taken quite significant action both that there is clarity for people paying their own fees and that they will see benefit from it," she told BBC Radio 4's Today programme. Ms Smith conceded that costs for homes were increasing, but she said it was unacceptable for homes to raise fees by the extra amount older people now received from the NHS without improving the service to them.
Extra government investment in intermediate care was also helping by allowing more older people to be cared for in their own homes, she said.
Pauline Thompson, of Age Concern, was worried that government money for nursing care had not been passed on to individuals. "People are angry that, having being promised by the Government that they would see the benefit of this money, they don't feel that they are."
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