A charity which cares for elderly people says new Government rules will spark a crisis in the rest and nursing home industry.

Worthing-based Guild Care is spending £2.3 million to upgrade the Caer Gwent home, in Belsize Road, before the legislation comes into force.

Rob Benfield, chief executive of Guild Care, said the charity was 100 per cent in favour of improved standards which would ultimately improve quality of life for people in its care.

But he warned: "The impact of those standards is that we can expect to see a significant number of homes closing locally and nationally.

"Smaller, family-style homes in older properties are particularly vulnerable because it may cost too much to adapt them, so the choice available for local people seeking residential care could be reduced."

The Care Standards Act comes into force next April and will establish an independent body to inspect care homes, including those currently exempt from inspection.

It will also insist that from 2007, homes must offer larger bedrooms and fewer shared bedrooms for residents.

Guild Care, which has provided residential care in Worthing since 1943, said the extension and refurbishment of Caer Gwent was the first phase of a multi-million pound redevelopment of its four homes, which have 162 residents.

The initial £2.3 million cost was being met via fund-raising and bank borrowing but Mr Benfield said finding the cash for further upgrading would not be easy.

He said: "Unfortunately, fund-raising successfully to build or redevelop homes for older people is an uphill struggle. But it is vital that we as a society provide high-quality care for the older members of our population."

Under the new Act, care staff will be expected to take on more responsibility and will need a higher level of training, which could cause problems for a sector already facing a recruitment crisis.

Mr Benfield said: "It is difficult enough to recruit staff at the moment because the work is perceived as fairly low status and is not paid as well as it should be.

"If that's the case now, how are we going to be able to recruit a sufficient number of high-calibre staff in the future?

"Guild Care intends to meet and where possible exceed the new standards but a challenging time lies ahead for local care providers."