The chief executive of the National Federation of Occupational Pensioners said: “It demonstrates the urgent need to review the level of funding provided by local government and central government for this essential service.”
A group of representative organisations – Bupa, Barchester, Care UK, HC-One, Four Seasons, and Care England - have written to George Osborne warning that the introduction of the living wage will cost every residential care bed an extra £18 and could lead to the closure of more than 9,000 care homes.
At the beginning of November, there was speculation that the UK’s largest care home operator, Four Seasons, could run out of funding, risking closure of the 350 homes it operates across the UK.
Rating agency Standard & Poor’s said that the care home operator’s capital structure was unsustainable and warned its cash could run out.
In July, the government announced that the cap on care costs, which was set to be introduced in April 2016, would not come in until 2020.
Announcing the delay, Alistair Burt, minister for community and social care, said: “A time of consolidation is not the right moment to be implementing expensive new commitments, especially when there are no indications the private insurance market will develop as expected.”
Lorreine Kennedy, head of care fees advice at Hertfordshire-based Carematters, said: “It was a tall order to have the cap in place by 2016, and I am not sure where the money would have come from, so I think it was not properly thought through.”