A third of old people could struggle to find a residential care bed as homes are forced to close their doors when the national minimum wage is introduced, a leading chief executive has warned.
Professor Martin Green OBE, the chief executive of Care England, has written to Cambridgeshire MPs to warn that within five years there could be major problems.
The warning comes after he said homes would struggle to make businesses work once the Government introduces a minimum wage.
Professor Martin Green, Chief Executive of Care England, said: “It is no exaggeration to say the care sector is on the brink of a catastrophic collapse and in desperation we are turning to MPs in Cambridgeshire for support.
“We urge them to write to the chancellor and impress on him the seriousness of the situation which will have a significant impact on thousands of elderly vulnerable people in Cambridgeshire.
“MPs and the government must act swiftly or be faced with a care sector crisis bigger than the collapse of Southern Cross and more severe than that facing the steel industry.
“Around 37,000 residents may be made homeless if the sector collapses – these are real, vulnerable elderly people and their families who will be affected, with the government facing a human tragedy of its own making.”
Professor Green emphasised that the care sector welcomed the national living wage for carers in recognition of their very difficult and demanding role. However, the industry leader warned of the effect of this on care home finances.
Unlike many businesses, staff wages account for 70 per cent of care home costs and 55 per cent of all people in residential care are state-funded by local authorities or Clinical Commissioning Groups who must be able to meet the increase in costs caused.
It will fall to the NHS to care for those older people who cannot be placed in care homes which is set to cost the NHS £3 billion.
A report published by independent think tank ResPublica says urgent extra sufficient government funding needs to be provided.
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