Thursday, August 6, 1998 Published at 12:54 GMT 13:54 UK
Community care kicks in
The number of elderly people in care homes is falling for the first time
The number of elderly and physically disabled people in nursing and care homes has fallen for the first time since the introduction of community care.
Health analysts Laing & Buisson say that the number of people in long-term care homes fell from a peak of 512,000 in 1995 to 487,000 in April 1998.
Numbers had been rising steadily for the last three decades.
The figures show the 1993 community care policy is finally kicking in, with government funding for long-term care being squeezed and local authorities having to carry out needs assessment before placing people in care homes.
The fall is despite the 1% a year increase in the number of elderly people in the UK. "It seems that pressure for community care is more than overriding demographic pressures," said a spokesman for Laing & Buisson.
The firm's annual report shows that the major cuts in care homes have been made in the state sector, with the independent sector levelling off between 1995 and 1998.
Tightening the belt
But it predicts tough times ahead for the sector with falling numbers of elderly people being placed in homes, causing "a possibly severe impact on occupancy rates".
A Laing & Buisson survey of 201 of the 208 local authorities in the UK found that just under a quarter of local authorities raised fees by less than 2% in 1998/99.
Around an eighth froze their fees and seven actually reduced the amount they paid.
At the same time, hourly rates for staff were rising and the industry would soon be facing further pressure from the national minimum wage and the European working time directive.
Laing & Buisson presented a bleak outlook for the sector, saying the typical care home made only around 50p profit per bed a day at an average 85% occupancy rate.
"Unless rents and other property related costs are set to fall, the sector is not capable of absorbing any further prolonged squeeze on its margins," it says.
But the independent sector's influence in the home care sector is growing. It now accounts for 43% of home help and other home care services. Thirty-eight per cent of services are provided by the private sector.
The report says Labour has put slightly more money into community care than the previous Conservative government.
Funding went up by 5.7 per cent for 1998/99 and similar increases are predicted for the next three years.
But Laing & Buisson says that inflation, population ageing and other factors will reduce the impact of the increase, allowing only "a small margin of real growth" which "will not be enough to bring about any radical change".