Care Home Fees and the Cost of Care

Nick Kempe

Care home fees and the cost of care – Scottish Care’s relationship with the Scottish Government

The relationship between successive Scottish Government and Scottish Care, who represent private care providers, has been rarely commented on even though from time to time issues bubble into the public realm as they did last week.   Scottish Care did what they always do when care homes close. It linked recent closures to what they claim are inadequate levels of public funding having in an earlier news release concluded that “there is a real urgency to save Scotland’s care homes”.  

This is part of the wider myth promulgated by Scottish Care that the very high fee levels being charged to “self-funders” are necessary to subsidise the rate that councils pay for those who qualify for full public funding (which was until last week’s agreement £838 a week for nursing care).  Scottish Care never mentions the very high profit levels being achieved by a significant proportion of providers nor their greed: a case in point is Margaret Mackie whose family have now been forced to move her from Northcare Suites in Edinburgh to another care home. A care scandal of the highest order.

The silence from Scottish Care about this and other such cases is telling.  One of Scottish Care’s workstreams is “Rights made real in care homes”.  This has failed to tackle the issue of how basic consumer and contractual rights have been subverted by the private care home market or the need to protect vulnerable older people and their families from being exploited financially by providers. 

The very high profit levels being achieved by some providers should also be taken account when considering Scottish Care’s claims that the workforce problems in the sector are all the Scottish Government’s responsibility.  While rightly arguing to the Scottish Government that the workforce should be paid more and making comparisons to the pay of staff in the NHS, Scottish Care never state what the highly profitable care providers are paying their workforce.  A cursory examination of accounts  suggests that many could match NHS rates for care staff or more and pay all staff £12 an hour.   Instead they exploit both residents and their workforce.

Scottish Care claimed in its news release that the publicly funded rate of £838 “is equivalent to around £5 per hour for complex care and support”.  This is extremely misleading.  Few older people in care homes receive more than four hours direct care a day, so over 24 hours a provider receives £120 to deliver four hours care.  That is “equivalent” to £30 a hour!  Neither figure is any use for working out a true cost of care.

Equally misleading was Scottish Care’s news release in May which referred to “crippling cost of living pressures most especially in relation to energy costs which for smaller care homes have resulted in a 500% plus increase”.  That figure so far above the general increase in energy prices that it deserves further explanation.  More significantly, however, Scottish Care failed to mention the rise in bank interest rates, which are far more likely to explain why some care home providers are withdrawing from the market.  Doing so, however, would have helped highlight just how much profit is being extracted from the sector by financial interests.  That money would be much better invested in public care.

The question that the Scottish Government needs to address therefore is how it can raise wages in the care home sector without letting private providers off the hook for how they have treated their staff (not just pay but a lack of training and support) and without fuelling their profit levels even further.  The answer lies in the creation of a not-for-profit National Care Service. 

The Scottish Government could, if it had the will, take over care homes threatened with closure for a fair price, where appropriate, and then assume direct responsibility for the running costs.  This is what happened when the Scottish Government took over Home Farm care home on Skye during the Covid crisis.  There is no reason that precedent, which took place in the constituency of the then Finance Secretary Kate Forbes, should not be repeated.  

The reason it hasn’t appears to lie in the longstanding assumption on the part of successive Scottish Governments that there is no alternative to private sector care provision. This was epitomised during the financial collapse of Southern Cross, Scotland’s largest care home group, in 2011.  Terrified by stories in the media that care home residents might be out on the street, the focus of government was on smoothing the way, i.e dropping most of the normal rules on the transfer of care services, to allow other providers to take over.  The largest of those providers was HC One which ran Home Farm on Skye.   

No consideration was given then to government taking over Southern Cross’ care homes, all of which could have been acquired cheaply had the Scottish Government insisted the normal rules applied.  Since then, not even the Covid disaster in care homes has forced the Scottish Government or government more generally to re-think their assumptions.

Those assumptions help explain the amount of government grant funding for “charitable activities reported in Scottish Care’s accounts.  Those for 2022-23, filed last month, show Scottish Care received £1,955,601 in grants compared to the £339,220 it received in membership fees.  Grant income was even higher the year before at £2,036,111.  This completely lets private providers off the hook.  While they focus on the business of raking in as much profit as they can and evicting vulnerable older people, the Scottish Government funds Scottish Care to provide training and the like.  

By comparison, in the year to March 2022, the Coalition of Care and Support Providers which represents the voluntary sector received £247,669 in grants.

The recent publicity about the rates paid to private providers should be understood within this context.  There effectively appears to be a tacit agreement in place between the Scottish Government and Scottish Care. Under this the Scottish Government will not challenge the right of the private sector to make profits and funds initiatives that are designed to make the sector look responsible (workforce development, rights etc).  Conversely, Scottish Care will only take their criticisms so far, appreciative of the fact that much of their bluster about rights etc is government funded, and supports the Scottish Government’s integration agenda (an FOI response from the Scottish Government last year showed a significant amount of the grant was to promote the integration of care with health, i.e. undermine the role of local authorities). 

Hence why Scottish Care after all the noise accepted the 6% fee increase under the National Care Home Contract.  Until the Scottish Government changes its approach to the private sector any talk of a National Care Service should, like all the pronouncements from Scottish Care, be taken with a large pinch of salt.

1 thought on “Care Home Fees and the Cost of Care”

  1. Alasdair Macdonald

    A good article. I think for many of us the pandemic and the deaths in large, privately-owned care homes shocked us into an awareness of the rent-seeking profit-driven mentality of many of the large private care-home providers. The contrast between the two care homes in Skye showed clearly the differences between the private and the publicly run facilities.

    BBC Scotland and much of the media and, sadly, some in the Labour party were complicit in attacking the Scottish Government and providing the care home owners with unchallenged platforms to demand greater fees and publicly funded equipment. No questions were asked of the owners about the level of wages paid, the hours worked by employees, their training, the health and safety provision for staff, including rest and recuperation. It is pretty clear that the main vector of infection of care home residents was staff who served several care homes in the course of their work.

    All the best!

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