Councils are “aggressively” trying to cut the rates they pay care homes and are not paying their bills for up to two months.
In-depth research by Rix and Kay Solicitors involving 80 care homes in Sussex found serious concerns over funding and the regulation of the sector.
The survey found 16% of homes felt new government legislation would benefit residents, 76% thought the government was playing politics with care and 69% disagreed that residents understood local authority funding, the survey found.
Operators had little faith in the Care Quality Commission (CQC) with most saying the regulator brings “no discernible benefit” to residents or care providers.
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Richard Bates, partner at Rix and Kay, said: “There is a general concern about government and local authorities’ willingness to engage in financial fair play.
“There is a growing disparity between the true cost of a room and the local authority rate.
“Local authorities have considerable purchasing power and are becoming more aggressive in negotiating rates down.
“Care providers are financing residents’ accommodation until the first payment by a local authority is made, usually by overdraft.
“There is general disquiet that there is no mechanism for local authorities to advance monies early pending completion of formalities.
“This reliance on the financial goodwill of care home operators clearly cannot last and a long-term solution needs to be found to fill this funding gap.”
Keith Hinkley, director of adult social care at East Sussex County Council, said: “As with every authority, the county council is facing increasing financial pressures, it is therefore vital we achieve the best value for money in every service we offer.
“We work positively with the independent sector to address any issues of concern.
“We agree it is very important to have a vibrant and sustainable care market so that people have choice and quality available to them.”
A West Sussex County Council spokesman said: “Last year we adopted a cost model for fees paid to independent providers of residential and nursing home services within West Sussex, which was based on work carried out with providers of care homes and care homes with nursing in West Sussex.
“This has ensured that we factor in a return on capital and profit for care home providers whilst ensuring we receive value for money. We also ensure that we regularly review the rates we pay to care homes by consulting with our providers.”
The authority produces an annual care guide and is involved in not-for-profit group Carewise, which provides information about care options.
Brighton and Hove City Council declined to comment.