Scores of care homes in South and West Wales will go bust and be forced to close unless there is a significant increase in funding from local councils.
That’s the grim warning from Mohammad Mazhar Ali, who runs Wellcome Care Homes that operates three homes in Caerphilly, Ceredigion and Carmarthenshire.
Mr Ali painted a bleak picture of the challenges providers face in trying to balance the books.
Things were so bad that his company had pulled the plug on £7m plans to open fourth care home with 96 beds in Llanwenog on the Ceredigion and Carmarthenshire border which would have created 150 jobs.
In Wales, the fees and the pay rates for carers are determined by local councils who used set formulas to calculate them.
As result, many carers are condemned to living on the minimum wage and he fears a lot of them will turn their back on the sector and look for better paid jobs elsewhere.
According to Mr Ali, the miserly fees were an affront to care workers who had put their own lives on the line and heroically done their utmost to protect their residents from the Covid-19 virus.
At the same time Wellcome had been forced to absorb a 14 per cent increase in the wage bill due to the extra costs associated with Covid.
He also fears homes may reluctantly have to turn away potential residents with significant needs if there is not a shift from a ‘one size fits all’ approach to funding which does not take into account the dependency levels of individuals.
Mr Ali says the challenges facing his homes have intensified following Covid-19 outbreaks, which have affected the health of a number of residents.
He is calling for a radical overhaul of the fee system and wants far more funding to be provided to meet the ever-increasing demands placed on providers.
His comments come after Care Forum Wales highlighted the low care home fees paid by local authorities in Wales and pushed for carers to receive improved salaries.
Last year the organisation, which represents nearly 500 independent social care providers, launched a campaign to ensure qualified staff who work in care homes and domiciliary care in Wales are paid a minimum of £20,000 a year.
Mr Ali says that in Ceredigion the standard rate is as low as £605 per week – equating to £86.42 per day.
“If nothing is done about this then I am worried that in years to come there will not be many care homes left,” said Mr Ali, who has run Wellcome Care Homes with his business partner, Syed Ali, since 2013.
“It is very challenging and difficult to do everything we do when the fees are so low.
“We provide accommodation and care and the residents have three meals a day. The staff administer medication and keep the residents engaged with activities, with services provided 24 hours a day.
“The fees need to be a lot higher to cover the costs of everything we do.”
Wellcome’s three homes are Annedd in Llanybydder, Carmarthenshire; Blaendyffryn Hall Nursing Home in Llandysul, Ceredigion; and Try-Celyn Court in Newbridge, Caerphilly.
Mr Ali, 52, said homes have a legal obligation to provide care for individuals under the Social Services Wellbeing (Wales) Act 2014.
But he is frustrated by the fact that local authorities do not vary the fees paid based upon dependency levels.
His concerns have been heightened by the impact of Covid outbreaks at the homes.
He added: “People are now coming into homes who are more frail and have complex needs.
“If somebody has a high level of need then this is clearly going to cost more.
“We have had Covid outbreaks at our homes. Although we have come the other side and thankfully the majority of our residents have survived, many are not the same as before.
“Their level of dependency has increased. This results in extra staffing costs.
“However, we do not get any extra funding to cover these increases in costs.
“If there is not a change then I can see care homes saying somebody is too frail to take them on. The system needs to be changed.”
“I am calling on the Welsh Government to step in and help ensure carers can be paid a minimum of £11 per hour, recognising the importance of their work and the long hours they put in. Ideally they would be paid even more than that.”
“It is unfair the UK Government’s newly-implemented quarantine hotels scheme – which sees arrivals from 33 high-risk countries having to isolate in a hotel for 10 days – involves a fee being paid of £175 per night.
“I am bemused why this figure is significantly higher than the amount our homes receive for providing vital care for residents.
“We are providing a larger and more comprehensive service than the hotels and looking after the most vulnerable in society,” said Mazhar.
“How can it be fair that the hotels are paid so much more? We are working tirelessly to save lives.
“The minimum paid for care per day should not be less than the £175 that the hotels are receiving.”
Mario Kreft MBE, the chair of Care Forum Wales, said: “The First Minister rightly pointed out that social care was in a very fragile state even before the pandemic began.
“The reason the sector is so chronically underfunded is that we have had local authorities managing the market for a generation, particularly in relation to care homes, and it was a disaster from the word go because they put cost before quality.
“As a result, social care has always been treated as a poor relation and a Cinderalla service.
“We need a radically different approach to the way we fund social care otherwise the situation will never get better.
“If we had to replace the current capacity of 20,000 beds it would cost £3 billion – and that’s without the cost of the land.
“Even then it would not be economically viable to build new care homes in many rural communities because it would not stack up financially.
“We therefore need to preserve what we have already and Wales needs to decide what kind of health and social care system it wants, in particular the value it attaches as a nation to its social care workers.
“We need to ditch the current postcode lottery and have a new national strategy with certain things like minimum fees set centrally, just like minimum standards, enabling providers to pay the real living wage to all qualified social care workers.
“The plight of Wellcome Care Homes in being forced to shelve their plans for a new care home which would have created 150 new jobs is yet another example of the urgency of the situation.
“If we carry on doing what we’ve done for the past quarter of a century we will make no progress and Wales will be poorer for it.
“As Einstein pointed out, insanity is doing the same thing over and over and expecting different results.”