A recent report on the funding of residential care contained some significant information of major consequence to older people. It was produced by the relatively obscure Local Government Information Unit and commissioned by the equally unknown care home fees specialist – Partnership.
The central finding of the report is the forecast that there will be £1 billion a year shortfall in residential care fees.
This is not a new message. It’s just one that has been falling on the deaf ears of politicians for far too long. Nor is it something that residents and their relatives want to face so they have been turning a blind eye to the issue until the harsh reality of not being able to cope at home forces them to come to terms with paying for the high cost of residential care.
Here are some facts from the report:-
- 40% of residents in care homes are self-funders
- 25% of them run out of money
- 612,000 residents receive some state funds
- On average self-funders live 4 years in residential care
- This will cost between £120,000 and £220,000
Put all these figures together and roll them forward fifteen years and the LGIU forecasts the cost of state support for older people in residential care will need to double from £6.36 billion to £12.15 billion.
Of course, this won’t / can’t happen which is why the politicians set up the Dilnot Commission to hand out the bad news – which is that older people who need more care are going to have to fund it themselves.
The good news is that the over 65’s collectively own £1 trillion of unmortgaged property. The not so good news is that this will only work if everyone chips in something towards the very high cost of the oldest and frailest, particularly those with dementia who tend to need care for longer.
This is the equation that Andrew Dilnot is wrestling with. I am sure he will shortly come up with a solution which requires people to use their housing equity to pay for care. The £6 billion question is