Bupa’s fear over care home funding

The group, which takes some 70 per cent of its 18,000 residents from the NHS or local authorities, said occupancy rates at its 302 UK care homes fell to 87.3 per cent from 88 per cent the previous year as the public sector spending cuts meant more people were looked after in their own homes.

Chief executive Ray King said the funding squeeze was impacting fees across the sector and that unless care homes received “fairer” rates, it will jeopardise the quality of care and lead to a potential bed blocking crisis for the NHS.

The lower occupancy rate and increased staff costs and training led to a squeeze in profits in Bupa Care Homes UK, although its care services division as a whole saw a 5 per cent increase in its surplus as a result of stronger performance overseas.

The group, which is a provident company with no shareholders, reported a 20 per cent increase in its overall underlying surplus to £559m for 2011, boosted by a strong performance in its Australian and international divisions.

Mr King’s warning came after the collapse of the UK’s biggest care home operator Southern Cross last year, which blamed local authorities for falling fees and occupancy rates.

Mr King said operators will eventually reduce the number of beds in the sector unless the Government pledged to start increasing funding.

He added: “The people will keep coming but where will they end up?

“In the NHS blocking beds.”