The rate of care home closures across Scotland “could escalate” without a key agreement with local governments soon, care home providers have warned.
COSLA, which represents local government, sets weekly care home fees as part of the National Care Home Contract (NCHC).
The rates currently stand at £838 for a nursing home and £719 for a residential care home, subject to a new agreement.
The contract is reviewed and renewed annually by COSLA and Scottish Care, which speaks for private and charitable care homes, and caps care home profits at 4%.
Despite rising costs over the last few years, agreements have been possible; however talks have reached a stalemate this year.
Scottish Care said on Wednesday that two COSLA offers since January had been rejected by care providers due to rising costs, as well as difficulties in employee recruitment and retainment.
The latest offer was an increase of 6% to fees.
In a statement, Scottish Care said: “The loss of the NCHC will result in the closure of many more care homes across the country most especially in rural and remote communities and even more importantly will cause huge damage and distress to hundreds of care home residents.
“There is a real urgency to save Scotland’s care homes.”
Both offers put forward this year by COSLA were rejected due to their inability to account for a £12 per hour wage for care workers, the body said.
It added that the offers also did not account for payment of the Scottish living wage to all care home staff, and sharp increases in overall running costs.
The body said that, alongside cost increases, recruitment challenges have also risen for private care homes since the Scottish Government-funded Agenda for Change settlement.
The settlement means that, from April this year, NHS care workers in similar roles as care home care workers now make over 19% more.
Scottish Care said the country has seen the “largest number of care home closures” in the last few months due to these challenges, and warned that this could “escalate at speed” without a new NCHC agreement.
The charity said: “Scottish Care recognises the immense pressure that local government is under, and we recognise that the offer currently on the table – a 6% increase – is realistically the best that they can offer.
“However, this will not pay frontline workers the £12 an hour they deserve and address the critical energy and other cost issues.
“If accepted this will inevitably lead to a huge number of homes closing their doors with all the devastation that brings to vulnerable older residents and loss of employment for staff.”
Councillor Paul Kelly, COSLA’s Health and Social Care spokesperson said: “Following an intensive period of negotiation, in March of this year Local Government made an offer to the care home sector.
“This was the highest-ever proposed increase to the National Care Home Contract, is the best offer we can make and is at the limits of affordability. We note that Scottish Care have acknowledged this.
“Local Government budgets have been under severe pressure in recent years. Despite this the offer sought to recognise the essential and invaluable role of care homes and their staff within our communities and was inevitably shaped by the severe financial and inflationary pressures we collectively face.
“We understand that as part of Scottish Care’s rejection of this offer there was direct engagement with Scottish Government in relation to the financial challenges across the sector.
“Meanwhile, councils have continued to ensure payments are timeously made to care home providers, including to enable adult social care workers to receive the Real Living Wage. The full offer remains on the table.”