Fees clampdown could shut homes: Rule changes on help for elderly

THE boom in private care homes for the elderly is likely to end in a wave of closures after next month's clampdown on state support for incoming residents on low incomes, an independent study warns today.

As councils become responsible for arranging and funding the residential care of vulnerable groups, elderly people may be the victims of 'severe local turbulence' in the market, it says.

Homes operating in low-cost areas such as the Midlands and the North will be most susceptible to the expected shake-out, as national income support limits are replaced by local price deals. If councils are to stay within budget, fewer applicants will receive help with fees than in recent years.

The latest evidence of impending confusion and inadequate funds to meet demand in the run-up to the Government's community care changes comes in the annual survey of the elderly care market by the analysts Laing & Buisson. Although this year is likely to mark the end of a decade of rapid growth in the residential and nursing home sector (now worth pounds 7bn a year), a steady expansion will be seen over the next few years under the impact of an ageing population.

More people are likely to make their own private arrangements, too. The slump in the property market from the end of 1989 is thought to account, at least in part, for the sharp rise in elderly people claiming income support for care home fees. The rules allow state payments for up to a year after an owner-occupier has entered residential care, provided claimants can show that they have tried to realise the value of their property.

The Department of Social Security has no power to claw back income support payments when the property is finally sold. But from next month, anyone seeking financial support to move into a care home must approach his or her local authority. The council may place a charge on the person's home and recover the costs of the care - from day one - out of the proceeds of the eventual sale.

Average fees for private residential homes last year were pounds 224 a week for a single room and pounds 208 for a shared room. Private nursing home fees were pounds 322 and pounds 298 a week.

Care of Elderly People Market Survey 1992/93; Laing & Buisson, Lymehouse Studios, 38 Georgiana Street, London NW1 0EB; pounds 225.