Letter from the Chief Executive IHA to
the Clerk of the Committee (DD 13B)
INDEPENDENT SECTOR CARE HOME CAPACITY
I am writing to clarify the Independent Healthcare
Association's (IHA) position on bed losses in the independent
sector, post the Health Select Committee on Delayed Discharged
evidence session at which the IHA gave oral evidence on 24 April
Two sets of figures are currently being cited
by a number of organisations and politicians, 19,000 and 50,000.
These numbers are respectively net and gross figures. As far as
I can determine, essentially, both these figures are correct and
are contained in Laing & Buisson's "Care of Elderly
People Market Survey". The IHA feels that the 50,000
gross bed loss figure (since 1996-97) is more relevant because
of the impact those closures had on 50,000 residents. We are basing
this number on Table 4.2 of the Survey which summarises a total
of 51,147 deregistrations (Laing & Buisson, Care of Elderly
People Market Survey, 2001, page 64) so we are confident in
quoting the gross loss figure of 50,000 beds over that period.
I believe that the 19,000 figure which the Government
has been using may be based on the "Total Net Change"
figures in this same table (from 1996-97 to 2000). The IHA's view
is that at a local level, it is important to conisder the gross
bed deregistration figure as the new beds opening (approximatley
30,000) may not necessarily be in the same geographical area of
the country nor of the same type (ie, nursing, EMI, etc), as those
which closed and thus vulnerable people will be faced with the
upheaval, uncertainty and anxiety of moving out of what they regard
as their home, often with little hope of an alternative place
of any sort available in their immediate area. Equally, though,
quoting 19,000 may be justified when looking at the national bed
The figures quite apart, our main conern is
that these closures are largely happening in a haphazard and unplanned
way and that the principal reason for many of these closures is
the low local authority fee rates in many areas of the country.
This fact has been borne out by the PSSRU reports which the Department
of Health commissioned, "The Rate, Causes and Consequences
of Home Closures" and "Care Home Closures: The
Provider Perspective". These reports looked at the causes,
process and consequences of closures of care homes for older people,
they clearly state that the trend of the closures is continuing
across the country (varying by region and type of home) and conclude
that the two factors most often identified as a decisive factor
in the decision to close a care home were:
Local authority prices not covering
costs (including past failure to cover costs and future expectation
that local authority prices were unlikely to cover costs);
Cost implications of the National
In their Market Survey Laing & Buisson were
also concerned about prospects for the future and say:
"The continued slowdown in the number of
new registrations is a reflection of inadequate returns available
to developers, flowing from below-RPI revisions in local authorities'
baseline fee rates. The year 2002 may prove to be a watershed
. . . the year in which new National Minimum Standards for care
homes are expected to be implemented. The rate of de-registrations
is likely to climb and a plausible scenario is that capacity shortages
will become commonplace". (Laing & Buisson, Care of
Elderly People Market Survey, page 27), and that:
"The new National Minimum Standards to be
implemented in 2002 may precipitate a much more rapid shake-out.
Its scale will depend in part on how banks view the transitional
arrangements that the government has put in place for care homes
to achieve compliance." (Laing & Buisson, Care of
Elderly People Market Survey, page 67).
The PSSRU report containing the provider perspective
identified the following as being factors which might improve
Fee increaseson average an
increase of 22 per cent was indicated as being needed.
Fee structure/link to dependency
Relaxation of regulatory environment.
Higher occupancy levels.
More partnership working with local
authority (to diversify).
Labour supply and retention (improved
local labout supply).
I hope this helps to clarify both our reasons
for concentrating on 50,000 gross figure and our concerns about
the difficulties being experienced by both users and service providers
at the front line of delivery of care. I would be happy to speak
to you or other members of the Health Select Committee or your
advisers about this further.
24 May 2002