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Lester Aldridge Life Matters for Lymington: Healthcare – Who Pays?

Surge in Cost of Living Impacting Healthcare – Who Pays?

Lester Aldridge Life Matters for Lymington: the surge in cost of living impacting healthcare – who pays?

In the New Forest as elsewhere in the UK, a problem impacting many is the increase in the cost of living that we have experienced over the past year. In the health and social care sector, the impact is compounded by the well-publicised underfunding. This is not sustainable, and the government is not offering any tangible solutions.

older couple in background with piggy bank in foreground

There was a reported funding shortfall of £2 billion in residential and nursing care homes for older people during 2021/2022. Similar shortfalls in funding are experienced across the other providers that make up the health and social care sector. 

Over the past year, the UK has experienced dramatic economic conditions, with inflation reaching a peak of 11.1% and energy prices rising by over 100%. This has significantly impacted the health and Social care sector, with the cost of supplies rising while the operating costs of facilities and machinery have also increased. Unfortunately, the additional financial burden has been met with little to no action from Local Authorities and Integrated Care Boards (ICBs) to assist in subsidising these costs.

Local authorities and integrated care boards responsibility to pay

Local Authorities and ICBs are directly responsible for paying reasonable care costs. This is affirmed by the Care and Support Statutory Guidance which states that Local Authorities should pay a fair market rate for the costs of care that allow independent providers to operate.

ICBs are responsible for planning and funding NHS services in your local area. Local Authorities are under a duty to contribute to the cost of care for eligible persons. You can typically have some or all of your care needs paid by the Local Authority if you have less than £23,250 in savings. ICBs will generally pay for your care if your needs are primarily health needs. Between these two bodies, the cost of care for eligible persons should be adequately covered. However, that is often not the case.

Care England studied average fees paid by Local Authorities across England and reported the fair cost of care in their February 2023 submissions to the Department of Health and Social Care. Care England found the average difference between what a Local Authority pays for residential care fees and the Fair Cost of Care was £218 per week, which increases to £231 per week for nursing care. The shortfall in the context of an average residential care home with 30 beds would be a weekly shortfall of £6,540 a week or £340,080 a year. This study was completed in April 2022, before the cost of living surged over the past year. Therefore it is likely that this shortfall is now more significant than reported.

Utility costs in care homes

Energy prices have increased significantly over the past year. Some providers are reporting an increase of over 100% compared to a similar period in the past year. The cost of care includes utility costs; however, the Local Authorities and ICBs still need to increase their funding in light of the recent price surge. 

When Local Authorities and ICBs are asked to increase their funding to cover these surging costs, they state that there is no policy in place for them to increase funding. It appears that Local Authorities and ICBs expect this shortfall to be borne by the patients, their families or the care provider themselves.

The government has provided some support through the Energy Bills Support Scheme. This scheme is available to persons in a care home or assisted living facility who pay for some or all of their care. However, there are a few obvious flaws to this scheme; many of the people eligible to apply will require assistance, which creates an administration cost; the payment goes to the individual with no obligation to pay it to the provider (who is typically paying the increased costs in the first instance), and there are extremely short timescales in order to apply.

Different government schemes are available, but they need to adequately cover the additional expenses borne by the patients, their families or the care provider caused by the surging utility prices. 

Utility costs for at-home care

Local Authorities and ICBs are also responsible for contributing to the costs of patients who reside in their own homes but are dependent on medical technology such as ventilators, oxygen concentrators or at-home dialysis treatment. Some patients cannot meet the increased cost and must choose between their well-being or going into high debt levels to receive their vital treatments. 

There has yet to be any government support to assist with the rising costs for at-home patients dependent on medical technology. However, some private companies who supply these medical devices have started offering rebates on the amount of electricity their products use on behalf of the NHS. 

However, these rebates are only provided by certain manufacturers and for specific models of medical technology. Therefore many users of medical technology are left to cover their additional costs without any support. For example, customers using dialysis that sometimes require 12 hours or more during the day have reported a 400% increase in their yearly equipment operation costs.

Conclusion

Funding in the health and social care sector requires reform. Before the cost of living crisis, the sector was already severely underfunded. The rise in the cost of living, inflation and the surging utility costs have all exacerbated this underfunding, and it is clear that this is not sustainable. 

The social care ‘price cap’ may provide some much-needed reform to the sector but has been delayed until at least October 2025, with no certainty it will actually be implemented. In any event, this is still over two years away, and whilst the price cap may assist individuals to an extent, it is unlikely to impact the sustainability of providers significantly. Without providers, the sector would not be able to function. It is time that Local Authorities and ICBs address this issue with urgency.

We regularly provide advice regarding care contracts, fee disputes and funding queries and have extensive experience in the sector. If you have any questions concerning the economic climate in the sector and what this means for you, contact our health and social care lawyers to discuss how we can help at 01202 786135 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Emma Ritchie, Solicitor with Lester Aldridge Solicitors

Written by Scott Smid, Trainee Solicitor, and Nicole Ridgwell, Senior Associate, in the Healthcare team at Lester Aldridge.

About Lester Aldridge Solicitors

Lester Aldridge Solicitors are based in London, Southampton and Bournemouth - where the office covering the New Forest is situated conveniently close to the main Bournemouth train station. Their specialist teams in the various fields of law will be happy to advise and assist you, starting with a completely free initial consultation during which you can decide whether you feel able to trust them with your confidential information. Consultations are also available via virtual meetings : advice is available through phone, email, Skype and Zoom.

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Life Matters is a regular monthly feature on Lymington.com, which covers a wide range of legal subjects and is always written by one of the Lester Aldridge team.

You can see a list of all published articles by clicking to the Lester Aldridge Solicitors webpage on Lymington.com here.

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