A two-tier system in social care is being created by the government, an industry survey has revealed, with wealthy pensioners able to buy places in residential care while they are still "younger and fitter" than ever before, and the poorest seeing funding cut for council-funded beds.
The poll of care providers who account for 35,000 residential care beds – about 10% of those in the country – shows that, in the past two years, there has been a real-terms cut of 0.1% in funding for care at a time when demand from an ageing population is increasing.
With less cash to pay for places, 60% of providers said they were "reducing or anticipating to reduce" the proportion of beds available for council-funded residents. Almost all of those who responded said that there was a growing gap between money for social care and "public expectations of quality".
Instead of relying on taxpayers to fund the industry, nine out of 10 providers said pressure from low council fees would "polarise" the industry, so care homes would be opened in wealthier areas of the country with large numbers of richer pensioners who can pay for themselves.
This, the industry warns, would create a "two-tier" market in residential care. With almost £1bn less in councils' adult social services budgets this year, the effect will be to limit public provision to only the most needy.
More than 80% of care homes said that they would raise fees for pensioners who paid, to "cross-subsidise" council beds.
Many within the industry are scathing about the parsimony of publicly funded provision. One provider said the levels of cash bore "no resemblance to what it costs to provide care at even a basic level, let alone care that meets people's expectations".
Another said councils were offering only a few months' care to the frail and elderly at the end of their lives, compared with wealthy pensioners who bought high levels of care.
The private care provider told interviewers that "council-funded people are much poorer in condition. They struggled to meet council criteria for care before this. Private funded people are coming in younger and in better physical condition, hence they remain with us for longer. Sometimes this is in years, not months. We mostly find that when people come to us with lesser physical health issues we observe them getting stronger and enjoying a better quality of life for longer." The government has again delayed its white paper on social care, now likely to appear later this month.
The paper will not contain any proposals on funding but instead focus on the legal duties councils have to elderly people. The government claims all-party discussions are ongoing.
The Treasury has sought to water down proposals from the Dilnot report, which argues that lifetime costs for social care needed to be capped at £35,000 and that council-funded home help and care home places for the elderly should be offered to everyone with less than £100,000 in assets, up from the current limit of £23,250.
The report, commissioned by the government, puts a figure of £1.7bn on its recommendations and calls for "additional public funding for the means-tested system".
Liz Kendall MP, Labour's shadow minister for care, who conducted the survey, said there was "enough evidence that our care system is in crisis. Councils are being forced to pass on these cuts to care providers.
"This is having a devastating effect, with some of the poorest and most vulnerable people in society facing a two-tier service for care they desperately need.
"The prime minister must act urgently to tackle the care crisis. Labour is calling for legislation in this parliament on a new system for funding social care. Older and disabled people and their families cannot wait any longer for this vital issue to be addressed."
David Rogers, chairman of the Local Government Association's community wellbeing board, said: "There isn't enough money in the system and it needs urgent reform. Councils don't want care homes to go out of business, they need places where older residents can be well cared for.
"However, the long-term triple pressures of insufficient funding, growing demand and escalating costs, coupled with recent central budget cuts, means the current system is under acute financial strain and councils cannot continue to do all they have done in the past.
"The longer ministers procrastinate, the more our population ages and the worse things will become."
However, ministers say that they have prioritised social care with £7.2bn of extra funding in the next three years.
A Department of Health spokesman said: "The government has provided enough for councils to maintain the current levels of access and eligibility for care home residents.
"Ultimately the amount of money and where councils allocate their funding on social care is decided by them. We will publish our white paper on care and support and a progress report into funding reform shortly."
