A Forfar-based care company is to increase its fees by over 8%.
Tony Banks, chairman of Balhousie Care Group, blamed the increase on “inadequate funding” from local authorities which he claims is bringing instability to the care sector and putting care home operators in an impossible situation.
“Local authorities make a contribution towards personal and nursing care for residents who qualify for financial support but this year a freeze by COSLA meant care homes received absolutely no increase for council-funded clients for us, this accounts for two thirds of the people in our care,” he said.
“With an ever-increasing cost base due to inflation, a rise in VAT that cannot be recovered, an increase in the minimum wage and soaring costs for fuel, food and utilities, unfortunately this means unavoidable fee increases for private care home residents.
“The decision to review our rates was not taken lightly and new cost management initiatives have kept the increase to the absolute minimum while still allowing us to continue to reinvest in our homes and ensure that standards in our care homes remain high.
“Given the current fee negotiations that are taking place regarding next year’s fees, we hope COSLA recognises the seriousness of the situation.”
The four homes which will escape the rise are Clement Park in Dundee, the Balhousie Coupar Angus care home, and the Grange and Dalguise care homes in Balbeggie.
Scottish Care, which represents the country’s residential care homes and care providers, said it was difficult to predict if other care homes will follow Balhousie and up their fees.
But its chief executive Ranald Mair made clear providers were being put under “severe pressure” because local authorities had frozen the level of public funding dedicated to looking after the elderly and vulnerable.
“The rate did not go up at all this year and that has put pressure on providers,” he said. “Having said that it is difficult to know if they will put their prices up as a result. But what I can say is that it is more difficult for them to balance the books.”
Rising business overheads including food, fuel costs and staff wage bills are also influencing how Scottish care homes will operate over the coming months and years according to Mr Mair He said: “It is like anyone else. Food costs have gone up along with petrol prices and care homes are not immune to this, they feel the squeeze.”
News of the rise in fees came as a new study revealed more than 80,000 elderly people paying for private care at home or in residential homes run out of money each year.
The report, carried out by Key Retirement Solutions, said the funding squeeze applies to the estimated 165,000 paying for their own care in residential homes and around 180,000 paying for care in their own home.
Balhousie Care Group can accommodate up to 800 residents with premises in Dundee, Angus, Perthshire and Stirlingshire.
Fees start at £474 a week for local authority residential residents but the cost can go up depending on an individual’s needs.