One of Scotland’s most experienced care home operators today called on the Accounts Commission, the public spending watchdog for local government in Scotland, to carry out an investigation into how much local councils spend on their care homes.

Renaissance Care chairman Robert Kilgour, who founded the UK’s second biggest company in the sector and who currently operates 12 homes throughout Scotland said it was time that Scottish local councils were “open and honest” about the costs of building and running their own care homes – in comparison to the funding they provide to independent sector operators.

He said: “Local councils need to address growing inequalities in funding between local authority and independent homes. What is taking place is a blatant misuse of public money, with tens of millions of pounds wasted every year.”

To this end, he has made FOI requests to all 32 local authorities for a detailed breakdown of their care home operations, including:

• How many care homes they currently own, lease or hold under other tenancy agreement.
• Total costs of purchasing, land acquisition, building or renovating these homes – and borrowings required for these.
• Total weekly costs per resident for each care home.
• The average annual salary of managers, deputy managers and assistant managers for each care home.
• Details of any care homes that they have plans to buy, develop or build in the future.

The responses are now available online at www.scottishcare.info

Kilgour said: “The responses show there is no level playing field when it comes to funding elderly care in Scotland. How can local councils expect independent care homes to operate on far lower funding than their own homes?

“I want to highlight the double standards in operation. Local councils are not being realistic and honest in recognising the true costs of care.

He posed four questions in the aftermath of receiving the responses:

1) Why should certain local authorities get away with spending lots more of taxpayers’ money running their own care homes?

He gave examples from the FOI responses:

• East Lothian Council at Crookston care home in Tranent – £1055 per week per resident for residential care
• Fife Council – an average cost across their seven care homes of £947 per week per resident
• West Dunbartonshire Council from £896 to £969 per week per resident
• North Ayrshire Council from £1,533 to £1,767 per week per resident
• Orkney Council from £1,039 to £1,230 per week per resident
• Perth and Kinross Council from £920 to £1,825 per week per resident
• South Lanarkshire Council from £919 to £1,572 per week per resident
• South Ayrshire Council – £1,379 per week per resident
• Shetland Council from £1,338 to £1,789 per week per resident

Kilgour said: “All of these are far more than they pay the independent sector per resident per week – which is £594 for residential care, and even much higher than the £690 paid for full nursing care.

2) Why should certain local authorities get away with spending lots more of taxpayers’ money building their own care homes?

Examples from the FOI responses:

• East Lothian Council at Crookston in Tranent – £175k (in 2015) per bed plus land costs
• West Dunbartonshire Council at Crosslet House in Dumbarton – £157k (in 2017) per bed plus land costs
• Aberdeenshire Council at Bennachie View in Inverurie – £193k (in 2015) per bed plus land costs; and at Edenholme in Stonehaven – £130k (in 2012) per bed plus land costs
• City of Edinburgh Council at Drumbrae in Edinburgh – £135k (in 2013) per bed plus land costs

Kilgour said: “All of these are much more than the current (in 2018) independent sector spend – circa £90k per bed plus land costs?

3) What are council care homes now valued at compared to what they cost to build with taxpayers’ money?

Kilgour said: “I personally know of two – Ostlers House in Kirkcaldy in Fife and Crookston in Tranent in East Lothian that have been valued by professional surveyors at a lot less – millions of pounds less – than they cost the two councils to build. Many more will see the same waste of money. “I’d like to understand why some authorities feel the need to own and operate their own care homes at a very expensive cost to the taxpayer as opposed to other councils who don’t feel the need.”

4) Why are some local councils charging higher fee rates to private funders than they are paying to the independent sector?

Examples from the FOI responses:

• Fife £954 for residential care per week per resident
• Argyll and Bute £1244 for residential care per week per resident
• Western Isles £1,028 for residential care per week per resident
• Midlothian £915 for residential care and £1,010 for nursing care per week per resident

Kilgour said: “These local councils seem to be subsidising their care home costs with charging private funders higher fees.”
He added that reassurance was needed that elderly people are being offered real choice as to which care home they wish to enter, rather than being pushed into going into local authority homes.

He said: “Despite clear underfunding there is nevertheless a high level of quality in the independent sector, but if properly funded the quality would be even greater.

Independent care home companies are having to pay the Scottish Carers Living Wage, which I’m happy to do as care workers fully deserve it, but they are expected to do this with substantially lower funding than Council care homes.

“They also face other matters like the Apprenticeship Levy and uncertainty over Brexit which could result in loss of experienced EU-born staff. At the same time, they are expected to continue to invest in improved facilities. It’s simply not sustainable.
“The information on the website is intended to be a useful contribution to the debate for journalists, politicians and care home operators to access and use.”

Kilgour said if the present situation was allowed to continue, the result would be the closure of more independent care homes and bed blocking as elderly people have to be cared for in hospitals – resulting in more cancelled operations amongst the public.

He has suggested a four-point solution to the care of the elderly crisis in Scotland:

• Although Scottish Care, COSLA and the Integration Joint Boards (IJBs) have been developing a benchmarked Care Home Cost Model for the voluntary and independent sectors over the last 18 months, the Scottish Government should also urgently establish a cost review for the NHS and voluntary sectors to establish a level playing field for elderly care provision by benchmarking current costs across all sectors.
• This would allow for all future elderly care costs to be properly monitored to avoid waste and would also enable better planning, targeting and taxpayer value for all future expenditure.
• The Independent sector should be allowed and encouraged to become more involved in all 31 Health and Social Care Partnerships.
• The Scottish Government should appoint a Bed Blocking Czar with a detailed brief and powers to act.

Scottish Care Chief Executive Dr Donald Macaskill welcomed Kilgour’s initiative. He said: “Mr Kilgour and Renaissance Care are to be commended for undertaking this work through FOI requests. For some time now, Scottish Care has been working with colleagues in COSLA and the Integrated Joint Boards to determine the real cost of caring for the 33,000 individuals who will spend tonight in a care home.

“Mr Kilgour’s research has served to shine a light on the inequality at the heart of how we fund care home places in Scotland. People will rightly be shocked that local authorities are using public monies to deliver care at disproportionately and substantially higher costs than they are prepared to pay independent sector providers.

“This behaviour threatens the sustainability of the sector and at its worst could put those who live in a care home at risk of losing their place of care. Local authorities, I suspect, are delivering care home provision, at much closer to what the real cost of care is. It is a credit to the sector that the quality of care in independent care homes is as high as it is given the historic underfunding this research has revealed.
“Scottish Care will use this information to continue to work with others to create a system where care charges are transparent and clear, where you get a real choice when it comes to choosing a care home and don’t get pushed into choosing one provider or another, and where individuals receive the highest quality care possible.

“What this research makes clear is that we have a significant inequality and have been underfunding care home payments for many years, if local authority care is the barometer of true costs.

“Regardless of who delivers the care, it is becoming increasingly clear that as a nation we need to address the underfunding of a care home sector which is vital to us all.”

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Issued by The BIG Partnership on behalf of Renaissance Care
Contact Alex Hamilton on 07812 138701

About Robert Kilgour/Renaissance Care

Robert is a Scottish serial entrepreneur, investor and property developer who founded Four Seasons Health Care in 1988, opening its first care home in May 1989 in Fife. He left the company in early 2000 when it was operating 101 care homes and employing around 6,500 staff, the UK’s fifth largest care home operator, making his final financial exit from the company in 2005. Four Seasons is currently the UK’s second largest care home operator with nearly 360 care homes, around 17,000 residents and employing close to 25,000 staff.

Robert founded and is CEO of Dow Investments Plc, now celebrating its 29th year. In 2004 he founded, and is Executive Chairman of Renaissance Care, which currently operates twelve homes throughout Scotland and has 750 staff. Robert is a co-founder and Director of video and security systems specialists, NW Security Group (16 staff) and is also a founder shareholder and Chairman of Kingdom FM Radio (13 staff), the local radio franchisee for Fife. He holds several other non-executive directorships as well as several senior consultant and senior adviser roles.