Bupa in warning over care home fees

Bupa, which cares for 18,000 UK residents in over 300 homes, is concerned that the aged care sector will become “seriously underfunded” as a consequence of local authorities reducing the amount they pay.

Southern Cross, the UK’s leading care home operator, decided to close in July after it said it could no longer pay the rent on its 752 homes as revenues came under pressure due to falling levels of occupancy and fees.

Bupa, which said it had been approached but decided not to get involved in the restructuring of the Southern Cross estate, added it expects a further contraction of the care homes market unless “fairer fees” are agreed.

It warned this could mean more closures and a potential bed blocking crisis for the NHS.

Chief executive Ray King said a minimum for the industry must be fee rises linked to the underlying rate of inflation.

The group, which is a provident company with no shareholders, said its care services division lifted revenues by 1 per cent to £589m and profits by 2 per cent to £67.7m in the half year to June.

The UK profit contribution fell due to higher catering and utility costs, while occupancy among its homes, which are 70 per cent funded by local authorities or primary care trusts, dropped to 86.9 per cent from 87.2 per cent.

It said it remains committed to the care homes sector and spent £36.8m on its operation over the past six months.