If the anguish caused by the collapse of the Southern Cross group – which may lead to the closure of 500 care homes - was not enough, experts have warned that the elderly residents that another round of care home closures could be in the offing --- thanks to cash squeeze by councils!

According to the findings of an authoritative annual survey by healthcare market analysts Laing and Buisson, with the majority of councils across England having either frozen or reduced the fees they pay for residents in 2011-12, care home operators will apparently be facing the toughest operating environment in years.

While Laing and Buisson have calculated that operators require nearly 2.8 percent rise in fees to match care home cost inflation, the expected 0.3 percent average fee increase across the UK will actually spell a “significant real terms cut.”

Noting that as the news of Southern Cross’s collapse sinks in, care home operators “will need to think hard” about how to respond, Laing and Buisson has stated that the widening gap between the money coming in and the expenses will probably result in job cuts and deteriorating service; thereby forcing “more operators of residential care homes for the elderly into administration.”

Clearly, the cuts in the fees paid by councils for their state-subsidised residents will force hundreds of care homes to go out of business; and, to make matters even worse, councils are also reported mulling a small 0.6 percent decrease in the number of people they place in homes!