A survey of care providers has revealed a trend towards the closure of homes as a result of increases in the national minimum wage.

Research conducted by the Federation of Small Business has found that in the vast majority of care providers reported that their purchasing local authority has failed to increase the rates they pay to residential care home proprietors in line with the newly increased national minimum wage.

Over 93 per cent of respondents stated that the local authority had failed to do anything about the increase in the national minimum wage to reflect prices they paid to residential care home proprietors.

Forum Response: Federation of Small Business

Nigel Dua, FSB Care Homes spokesman, told ePolitix.com: "These are very worrying returns from FSB members running care homes. I am particularly aggrieved at the high percentage of local authorities who have simply ignored the impact of the national minimum wage on their clients and are refusing to increase the rates they pay to care homes in line with the national minimum wage even by a modicum amount".

"I am also very worried about the comments that we have received back from members, the vast majority reporting a reduction in staffing levels to the absolute minimum set by government and local authorities. This has meant an increase in hours worked by the owners themselves and a reduction in the number of places catered for by the home. This has led to less revenue and eventually the possible closure of the care home itself".

"Anecdotal evidence from the members has also highlighted their concern over the increase in regulatory burdens and their fears that the new National Care Standards Commission (NCSC) will add to their problems. The worry is that the existence of the NCSC will result in a dramatic increase in inspection fees from current levels, adding still further to the overheads of care home proprietors"."We shall be taking up this issue with local authorities and will point out in no uncertain terms that the inaction on fees by local authorities is grossly unfair and will in the end lead to the closure of otherwise viable care homes. This in turn, will result in less places for today's elderly which could increase the incidence of bed blocking in our hospitals and may have an adverse impact on hospital waiting lists especially for urgent operations".