Oliver Wright: 'Cinderella' service faces an uncertain and austere future

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Even in the good years, when public money was plentiful, care for the elderly was a Cinderella service: under-funded, under-regulated and under-loved. Now in times of austerity things are about to get much worse.

Local councils today spend more than 50 per cent of their budget on social care – the bulk of which is for the elderly. As a result of the public sector funding cuts announced in last October's Comprehensive Spending Review, the same councils will have their budgets cut by up to 9 per cent a year for the next four years (28 per cent in total).

This, at a time when the population is ageing and demand for care services is growing by 4 per cent per annum.

During the CSR, ministers made much of an extra £1bn to help councils pay for social care – but they failed to say it was not ringfenced and would itself be cut by 28 per cent over the four years. Another £1bn, they said, was being given to the NHS – but this will not be available for care homes.

All this means that the amount of money a care home gets for each resident will go down. "There are tough and difficult decisions to be taken," says Richard Jones, president of the Association of Directors of Adult Social Services.

"As a nation we need to spend more on care, but over the next few years the amount of money that councils have to spend on care will be significantly reduced."

Most nursing homes are now privately run but, according to the Registered Nursing Home Association, they rely on council funding for around two-thirds of their income.

Ironically, the financial sector still sees care homes as a good bet for the future and is lending and investing in new care homes. But those investing expect to get the same returns.

And so the decline in standards in Britain's nursing homes becomes directly linked to bankers' bonuses.