New figures have revealed Scottish care homes are closing at an alarming rate, reducing the number of beds available for elderly residents.
A leading figure in the private care sector said underfunding of the Scottish Government's pledge to increase wages in the care sector was to blame, with some firms struggling to remain viable already, even ahead of a further increase to the living wage level of £8.25 figure which comes in in October.
Robert Kilgour said he had been right to predict a crisis in the industry. However councils body Cosla and Scottish Care which represents care homes, both said the figures were potentially misleading.
Figures disclosed by the Care Inspectorate, which registers and inspects homes, in response to a freedom of information request, show that more care beds were lost in the first two months of 2016 than in the whole of 2014, with ten homes having closed or declared their intention to cancel their registration. While two opened, the net loss of beds by February of this year was 233.
This is more than a 201 net loss in 2014 and nearly half the number of beds (506) lost in 2015 with ten months of the year still to go.
Mr Kilgour, chairman of Renaissance Care, said that the statistics showed capacity in care homes was being lost just as an ageing population led to a 'ticking time bomb' of need.
He said decisions about the latest closures would have been taken before care home bosses knew about the £8.25 figure or how it was to be funded.
He said the latest agreement between industry body Scottish Care and councils' umbrella body Cosla for the funding of elderly care had been very disappointing and he had predicted homes would be forced to close. “The response by the Care Inspectorate to my FoI request proves I was correct in my analysis of the situation, but that gives me no pleasure at all," he said, claiming that the figures suggested the final total of beds lost could be over 1400 this year.
"Hard working care staff face losing their jobs, as a net loss of 1400 beds this year would result in the loss of 2100 full and part-time posts."
“Care home operators are coming under increasing financial pressure in a sector where three quarters of our residents are local authority-funded and almost two thirds of our fee income goes on staff costs.
“Yet the Scottish Government and local authorities are not fully funding the increased Scottish Carers’ Living Wage, which will reach £8.25 in October this year."
He said his own company had not closed any homes, but would have to decide shortly whether to do so.
“My company is now crunching the numbers and I’m sure many others will be doing the same. Some smaller operators will be forced to close, and even the bigger companies in the sector will have to shut homes as a result. There will also be a moratorium on new builds, as the figures justifying them now just don’t stack up," he said.
However Donald Macaskill, recently appointed chief executive of Scottish Care, disputed Mr Kilgour's analysis of the figures, and said there was currently overcapacity in the sector. Some care homes close each year because they are not needed in a particular area or because they no longer meet modern standards and are too costly to upgrade, he said.
"There is no evidence of an exponential growth in closures. Wer are working very closely with councils and the Government examining the costs of care. Two big care homes closing could make a difference to the figures, but that might not be to do with viability - there is simply no evidence that it is related to funding settlements. Further analysis would be needed looking at the geographical spread of bed places."
A COSLA Spokesman said the figures might be accurate, but Mr Kilgour's analysis was 'simplistic and misleading'.
"Extrapolating yearly closures on the basis of what happened in the first two months of the year is not in any way indicative of what will happen in reality.
" In a system where at a national level care homes operate with under-occupancy, bed closures need to be assessed with respect to where those beds close and whether and where other beds open to reflect local demand and need. Indeed – in Scotland we are committed to and actively pursuing changed models of care. This will necessitate reconfiguring where and how we invest in beds.’
"With regards to the NCHC settlement. COSLA and Scottish Care have reached a difficult but fair agreement. Local Government is actively committed to supporting sustainable and quality provision of care. We would expect all providers to similarly prioritise this over sizeable profit margins."
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