A significant number of care homes for older people who need nursing or residential care are still being under-funded, according to updated research released by the Joseph Rowntree Foundation.

The author, William Laing of health and community care analysts Laing & Buisson, has twice before reported on the gap between council fees and the reasonable costs of running a good-quality care home. In his latest report on this subject, Laing says that around £540m of extra funding is still needed in the system for local authorities to fund a modernised care home sector.

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The research uses benchmarking data to calculate a 'fair market fee' with 'ceiling' and 'floor' rates for what care home places should cost. It suggests that where care home fees fall between these brackets should be determined by their quality. Only if a home is fully up-to-date with its physical environmental standards and has a service rated as 'good' or 'excellent' by the regulator should it warrant the highest fees.

Mr Laing said: "Care homes that meet the highest standards will cost more for care places, but this will benefit everyone, not just providers and investors. If a 'fair market fee' were introduced, older people who rely on state funding would have access to better quality facilities and relatives or charities would no longer need to make ‘top-up’ payments to keep elderly residents in their chosen care home."

(CD/JM)