Warning as blundering council set to pay care homes extra £230k

Council chiefs say they are confident that care homes will accept a proposed increase in fees - after concerns were raised over a potential budget 'black hole'. Stoke-on-Trent City Council has offered to increase the amount it pays care homes by 1.4 per cent this year, after previously approving a payment freeze in breach of an existing contract due to 'human error'.

Cabinet members last month agreed to launch a consultation with care homes on the fee increase, prior to a final decision being made. But opposition Conservative councillors raised concerns over the impact on the cash-strapped council's finances - especially if the care homes demand an even bigger increase.

They 'called in' the cabinet's decision to the adult social care overview and scrutiny committee for further discussion. Council bosses told the committee that the £230,000 cost of the 1.4 per cent increase - the minimum annual increase required by the contract - would be covered by funds previously set aside in the budget, meaning there would be no impact on other services.

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And while they are confident that the care homes will accept the 1.4 per cent rise, they said any additional increase would be subject to further scrutiny.

Peter Tomlin, director of adult social care, said: "We will be very clear with the market - and so far we've had no kickback from the majority of providers - that we can only pay within what the council can afford. So we're not thinking there will be any more than 1.4 per cent, the minimum we need to provide. If it goes up more than that then we're open to scrutiny.

"We're engaged with all providers, and it's not just about finances. What we're saying to the residential care market is that we can offer you support with training, jobs fairs to help with recruitment, and making sure we pay bills as quickly as possible - those are the kind of things the residential care market are interested in, it's not just about money. So with all that, 1.4 per cent can be an attractive offer."

Mr Tomlin told the committee that newly-appointed officers had not been aware of the contractual obligation for annual 1.4 per cent increases, which had been agreed in 2021, but gave assurances that such a mistake would not be made again. He also explained that the council did not want to encourage growth in the residential care sector, as it was aiming to support people to live more independently at home.

Committee member Heather Blurton raised concerns that keeping the council's care home payments low effectively meant that self-funding residents would have to pay more themselves. Mr Tomlin acknowledged this was the case, but said the whole system of funding adult social care was 'bonkers' and in urgent need of reform.

Maxine Clark, one of the Tory councillors behind the call-in, said they were concerned that the cabinet had made their decision without having all the information around the financial impact.

She said: "We know that adult social care is the biggest pressure that the council faces in its finances, especially as this is a council that has already said it's going to go bust. But nowhere in the cabinet paper does it say how this 1.4 per cent increase will be absorbed.

"Care providers are saying that the increase is not enough to cover inflation, increases in the National Living Wage - therefore this paper should have gone into more financial detail around the risks and the costs. It doesn't say what will happen if it's more than 1.4 per cent. And if we have to find the money, what impact will that have on other services?

"So what we're saying is that the cabinet should reconsider this item with the detailed financial risks - such as potential cutbacks to other council services. Because those cutbacks are going to be needed to plug this black hole."

But the Labour members of the committee, who are in the majority, voted to support the original cabinet decision. Both Conservative councillors voted against this.