Partnership has warned the coalition government's spending review will have a ‘profound' effect on the funding of long-term care (LTC).
Chris Horlick, managing director of care at Partnership, noted that despite local authorities being allocated £2bn of extra funding towards care services in the comprehensive spending review (CSR), this has not been ring-fenced for that purpose.
"Local authority spending already accounts for 44% of total public spending on long term care for the elderly (in 2008/09, this accounted for £7.21bn out of the total of £16.17bn). Yet the government has announced that local authorities will have their budgets cut by 28% over the next four years," he said.
"This is despite an ever increasing demand on local authorities to fund social care as the oldest in our communities are set to grow rapidly over the next decades with those aged over 75," he added.
Horlick noted that, according to market analysts Laing and Buisson, the over 75s - who are most likely to require domiciliary or residential care - are predicted to increase by 70% by 2030.
"There will also be continued care fees inflation," he continued.
"This gives rise to a real concern that local authorities will have a significant shortfall in their care budgets, despite the announcement in the CSR that there will be an extra £2bn promised over the next four years for social care. This concern can only be heightened by the fact that this additional cash will not be ring-fenced in local council budgets."
In an attempt to pre-empt the impending problems, Horlick has called on local authorities to help those self-funding clients in long-term care to support themselves by pointing them toward financial advice.
This is something the provider says will also ease the strain on councils by reducing the need for clients to fall back on public funded care.
"It is inevitable that insurance and financial service products will play an increasingly important role in helping individuals meet their care funding needs, as local authorities restrict funding to the least well off and as they continue to tighten eligibility criteria, leaving the rest to rely on their own resources as self-funders," he said.
"Immediate care plans can stop self-funders running out of funds prematurely and falling back on the state, which we estimate costs English local authorities nearly £1 billion each year, something we believe will treble in the next 20 years to £2.75bn and will become of increasing importance to councils as they seek to balance their reduced budgets.
"It is hardly surprising that self funders deplete their funds prematurely and fall back on the state, as out of the 53,000 people who had to pay for their residential care last year, only 7,000 received appropriate financial advice. Local authorities can help stop self funders running out of money by sign posting them to appropriate financial advice, which is a cheap and effective solution for them," he concluded.
