Elderly care: Government delays threatening future of homes report warns Its report, the only study of its kind in the care sector, showed that councils have upped their fees by an average of just 1.6 per cent in the current financial year. Inflation is currently running at 2.8 per cent and homes estimate they would have need an average increase of about 2.5 per cent just to meet their costs. The report adds that the rises might have been smaller had it not been for a series of legal challenges. The small rise in fees represents an improvement on last year for the battered sector, which was described as the "worst ever" for care homes. But overall, homes have seen a real-terms cut of almost five per cent over the last three years, the report found. It means that homes are more likely to charge middle class residents who do not qualify for state support even more. Only people with assets, including their home, worth less than £23,500 qualify for any state support with their care in old age. A recent study by the Labour Party showed homes are already hiking charges to better-off residents by up to £12,000 a year to subsidise those who receive free care. Laing & Buisson also found dramatic variations in the amount different councils are prepared to pay, with a handful of councils paying as little as £274 a week per person for residential care while others pay a minimum of more than £700 a week. Justin Merritt operations director of Laing & Buisson said: "With the continued delay of word from the Government on the reformation of social care funding and its considered response to the Dilnot report, it's hardly surprising that councils have been reluctant to budge on baseline fees. Initial promises were that the coalition government would have something to say in the spring. We're now half way through June - to paraphrase the old saying, just how long is this piece of spring? "This persistent chipping away at operators" margins certainly risks damaging the long term health of the sector. If the Government is not careful it could face a situation where just as it is geared up to address the problem of how to support an ageing population, one of the options in which to achieve this aim may no longer be in a position to do so. Martin Green, chief executive of English Community Care Association, said: "The care system is in crisis because local authorities are refusing to pay the true costs of care, yet still expecting to get high quality services and the Government is guilty of shameful complacency in refusing to find a solution to the long-term care funding crisis." But Sarah Pickup, president of the Association of Directors Adult Social Services, said councils are having to freeze pay for their own staff making it harder for councillors to increase fees elsewhere. "The independent sector is a place where the chickens are going to come home to roost if the funding situation isn't resolved," she added. Caroline Abrahams, of Age UK said: "These cuts will inevitably affect the range and quality of care available for England's frailest and poorest care home residents. As we continue to wait for the long delayed White Paper and funding report, the crisis in social care deepens by the day. Oliver Thomas, UK Director of Bupa Care Homes, said: "We know there's a £1.7 billion shortfall - politicians must agree how the system can be sustainably financed and should listen to charities, providers and councils when we unanimously call for the funding shortfall to be urgently plugged." A spokesman for the Department of Health said: "As this report says, councils are paying higher fees to care providers this year. Ultimately, the amount of money councils pay to care homes is determined in contracts between councils and providers, though councils should take into account the actual cost of providing care. In the Spending Review, we recognised the pressures on the adult social care system, and allocated an additional £7.2 billion over the next three years. We will shortly be publishing the Care and Support White Paper, and a progress report on funding, which will transform care and support.