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Pensioners are being charged up to £2,800 a year in admin fees by councils acting as “care brokers”, The Telegraph can reveal.
Local authorities are approaching pensioners – often while they are in hospital – and offering them “cheaper” care through their partnered services.
The Telegraph found at least 20 examples of councils charging these fees. However the service comes at a cost, with pensioners being charged thousands of pounds a year for the rest of their lives in some cases.
One industry member told The Telegraph the admin cost means the pensioner is often paying a premium overall.
Another warned wealthy pensioners are being used as cash cows to top up councils’ own care bills.
‘Encouraging a wild west market’
Wandsworth and Richmond demand £54 each week from families to cover “administration costs” for such a service, which comes to £2,808 each year.
Haringey charges a one-off fee of £650. Meanwhile in Surrey, the council charges a £295 set-up fee, a £125 annual fee and a £5 weekly fee.
Kent County Council is consulting on whether to bring in a £352 one-off fee, The Telegraph understands, along with an ongoing £3.08 fee each week – which comes to £160.16 each year.
Jane Townson, chief executive of the Homecare Association, said councils have “been doing it [acting as care brokers] for years, but not en masse” – until now.
“Self-funders are often told by social workers that they can get care more cheaply through them,” she said.
“But one of our members [a care provider] told us the fee the council was charging on top of their hourly rate meant it would have actually been cheaper to pay the private care fee.”
Back in 2021, the Local Government and Social Care Ombudsman forced Bexley Council to revise its brokerage charges after it decided to switch from a flat fee to 6.1pc of a person’s care package.
This led to one man paying £793 per year, rather than the previous £260 per annum – an increase of 205pc, which Ms Townson said was “blatant profiteering” and the Ombudsman a case of some families “paying over the odds”.
Another concern raised by Ms Townson was the hourly rates councils pay for social care contracts – those funded by the taxpayer, rather than relatives.
“Only 5pc of public bodies are coming anywhere near the minimum hourly rate needed to ensure sustainable services. Some pay as little as £16 or £17 an hour, which doesn’t even cover statutory pay levels for staff.
“This means councils are either charging for the hour when providers are only staying for 20 minutes or fuelling unsafe care. It’s just encouraging a wild west market of cowboys.”
The Home Care Association advises a minimum rate of £28.53 per hour of homecare, taking into account the latest statutory rise in the National Living Wage.
“If councils continue to pay these lower rates at scale, care providers will simply go bust,” Ms Townson added.
In one instance, a member claimed to Ms Townson they were “bullied” into accepting a £16-per-hour social care contract from the council despite running a business based on £24-per-hour packages.
The local authority said the gentleman they were trying to secure care for would be forced into a care home if they didn’t accept the rate.
Debbie Harris, founder of care provider directory Autumna, said the knock-on effect for self-funders of unsustainable social care contracts means they are effectively subsidising them.
She added: “Now, through these brokerage fees, they are also funding councils. We’ve seen an increase in local authorities charging people to find care on their behalf when they are in hospital. Families don’t know quite what to do.
“What we’re seeing is these ‘brokers’ in hospitals do not have the tools to do whole-of-market searches. Typically, they communicate with them via email and telephone. It’s a very manual, time-consuming search – which is one of the reasons why we have ‘bed blockers’.
“My worry for the sector is that if you have brokers in hospitals that have a constant stream of referrals, they become a very important source. It gives councils the power to say to a provider, ‘we can refer these patients to you if you accept our social care rate per hour’.”
One reason why councils are now actively advertising their services to self-funders, when they have not in the past despite being able to, could be because of the regulatory scrutiny on social care contracts – according to Dan Archer, of care provider Visiting Angels.
The Care Quality Commissioner has, in recent years, been probing councils who have not been letting some state-funded families choose their care providers.
State-funded families are technically supposed to get the money in cash for their homecare from the council, if they request it.
Mr Archer said: “There has been some resistance in the past from local authorities in allowing direct payments to families. When one of ours went to a council in 2019, the social worker denied all knowledge of direct payments.
“Local authorities benefit from the volume of care they commission, because they use it to beat up providers on price. But individuals can go where they like with those payments, they don’t have to choose one of the council’s partners.
“Local authorities now seem to be trying to protect this volume in other ways to suppress prices – and one way is using this brokerage service to channel people back to partner providers.
“In the absence of a solution from the Government, private care funders are subsidising council contracts and paying a premium for the same service.”
A spokesman for Oxfordshire Council said: “Where a council charges less in the one-off arrangement fee, they tend to charge more in the weekly fee. We work with more than 90 care providers on our framework, offering a huge amount of choice and variety.”
A spokesman from Haringey Council said: “Take-up of this service is entirely voluntary and assists self-funders not eligible for free support to get the right care for their needs.
“Feedback from our residents is that this is a valued service which provides access to a wide range of adult care providers. Unlike many councils, we do not charge an annual fee so that we can keep the overall charge as low as possible.”
Wandsworth, Richmond and Kent councils were also approached for comment.
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