County council care market conditions ‘unsustainable’

Care market conditions in England’s counties seem ‘unsustainable’ even before the new demands of the Care Act reforms come into effect, new research suggests. 

A report to the County Councils Network’s (CCN’s) Executive Committee this week says that over the past five years, with increasing demand and dwindling budgets, a widening gap between council fees and provider costs has hit provider profitability and ultimately the sustainability of the market. 

The latest CCN-facilitated study, based on 12 county and unitary councils, tasked analysts at LaingBuisson with evaluating the sustainability of the care market in the short and long term, in light of changes brought in by the Care Act. 

According to the Executive Committee paper, evidence from the 12 councils and providers clearly showed that self-funding older people pay much higher fees for residential and nursing placements than counties do for equivalent support. 

“Councils have been able to secure discounted rates from the market, at least in part, due to the extra profit generated from self-funders paying higher fees. This cross-subsidisation is in operation across all 12 councils markets, although the extent to which they are sufficient to cover the shortfall in council fees varies significantly.” 

Counties with large numbers of council placements – which tend to have a higher proportion of less affluent residents and a relatively small number of more affluent self-funders – are likely to be at “greater overall financial risk”. 

The extent to which council fees fall short of the standard cost of care, and the extent to which self-funder fees exceed standard costs, have also contributed to the risk that cross-subsidies will not be able to cover the deficit. 

LaingBuisson also identified that the level of funding shortfall between the fees councils pay and the standard cost of care is likely to increase over the next five years. 

“This will be in a large part down to councils being unable to afford to increase fees in line with, or over, the rate of inflation in order to meet sector-specific cost inflation,” said the paper. “Pressure to increase fees to maintain provider profitability and stabilise local markets will come at a time when local authority funding will be further reduced during this Parliament.” 

It was also stated that if government does not work with the sector to develop a sustainable way forward then there are likely to be unintended consequences on other parts of the public sector. For example, a reduction in residential and nursing beds available in local care markets is likely to exacerbate the delayed discharge rates from hospitals, which in this past year were up 29% in county areas. 

The estimated financial impact of care market equalisation has been projected using the 12 council models through to 2025. These figures have then been extrapolated upwards to the 37 CCN member councils using these models to provide an indicative indication of the likely financial burden on CCN members. These figures will be published, along with the full report in early June 2015. 

Tell us what you think – have your say below or email [email protected]


Jackie   01/06/2015 at 19:55

I am again very interested to read this article as would be the 90 + next of kin of Botton Village. This Intentional Camphill Working Community that is in the process of being broken up by the Camphill Village Trust, has always been on the cutting edge. Up until recently it has provided Social Therapy, a holistic life style that provides normal family living and where everyone works alongside each other as equals for the good of the whole community, thanks to the volunteer co-worker model that is essential to these Steiner communities and all at much lower costs than other care models. This rural lifestyle provides a high degree of personalisation as well as of physical, mental and emotional well being and is as preventative as one can be. It should not have to be re-invented, but that will be the case soon as CVT seem determined to change it to an employees care model. The benefits are immeasurable, not only to those that matter most, the Trust's beneficiaries, but also fiscally to the LAs, the government, the NHS and the tax payer. We cannot understand how CVT can push through these changes under the present climate. See for full details of imposed changes, increase in costs and why we feel they are irresponsible Despite the fact that 2/3 of the 93 beneficiaries have expressed their wish to keep this model, CVT are apparently ignoring them. This simply does not add up with the care standards required by the Care Act 2014

Add your comment


public sector executive tv

more videos >

latest news

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >


Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Cleaner, greener, safer media: Increased ROI, decreased carbon

23/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Public Sector Executive is no different. Long before Covid-19 even became a thought in the back of our minds, the team at PS... more >
read more blog posts from 'the raven' >

public sector events

events calendar


August 2020

mon tue wed thu fri sat sun
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

featured articles

View all News