New figures on self-funding in care homes show that 'many local authority rates are untenable'

The statistics on care homes and estimating the self-funding population in England found that around one in three people, or 36.7%, were self-funding care. The figures also show that there was a regional divide: While the south-east had the highest proportion of self-funders with 45.4%, the north-east had the lowest with 24.6%. And while care homes located in the least deprived areas had a statistically higher proportion of self-funders, at 53.8%, care homes in the most deprived areas had only 21.6% self-funders.

The statistics also show that homes providing care for older people had the highest proportion of self-funders with 49.6%. Care homes providing care for younger adults had the lowest proportion of self-funders with 4.8%.

Health and social care expert Joanne Ellis of Pinsent Masons, the law firm behind Out-Law, said that the figures throw into stark relief what care home operators have been saying for years.

"Many local authority (LA) rates are untenable in their own right and they are dependent upon the ability to charge self-funders more to make LA funded rates work. These statistics show the extent to which operators are forced to rely on the cross subsidisation from self-funders who are being provided with exactly the same service," she said. "These figures will play a key role in informing the serious changes that are needed to create a sustainable care system that is fair for everyone. This is particularly important with the introduction of the new cap - a lifetime limit of £86,000 - on an individual’s contribution as the true cost of care is going to have to be faced."

This is the first time that the ONS has published figures on self-funding of care home residents, relying on data collected by the Care Quality Commission between August 2019 and February 2020 and analysing it using a new experimental method.

Ellis said it was the first time the full extent of the phenomenon of cross subsidisation will be understood: "Currently the only way for many care home operators to make the local authority funded rates work is to charge self-funders up to 40% more. These stats are likely to throw that dynamic into stark relief."

She also said that the report may only cover residential care rather than home care but that this was just as significant to understanding the extent of self-funding: "With the current shortages of care workers, operators have understandably had to shift their focus away from LA funded to self-funded service users in order to prioritise those paying the higher rates. This cannot be the right message for a fair society in general. Currently the self-funders mask the extremely low and in many cases unworkable LA rates."

Only recently, changes to the way in which healthcare and social care in England are funded, including a cap on the lifetime amount payable by those requiring care, have been proposed by the UK government.