Care Planning Services says privately funded care and nursing home residents in the Bath area are having to subsidise residents in local authority care.
The Bath firm was set up by Stone King solicitors and Money Wise Independent Financial Advisers to provide joined-up legal and financial advice to help families plan and fund care in later life.
It says that in 2016, the average weekly cost of a room in a South West nursing home was £810 and £713 in a residential care home, according to research by property agents Knight Frank.
In Bath and North East Somerset the local authority fee rates are £576 for a nursing home place and £452 for residential care, which is below the regional average cost.
Sarah Clarke from Care Planning Services said: “The figures suggests that in the South West, either privately funded care home and nursing care residents are paying over the average to subsidise local authority residents, or that our care homes are attempting to operate on fees that are simply not sustainable to deliver high quality care in the long term.”
Meanwhile, national research published this week by healthcare economists LaingBuisson shows that some residents who fund their care home placement privately are paying thousands of pounds a year to subsidise local authority funded residents.
Sarah Clarke added: “We have known about the unfair cross-subsidies which exist between privately funded and local authority funded residents for a while, but the extent to which privately funded residents are picking up the tab for the unfeasibly low local authority fee rates is truly shocking.
“Many care homes are having to think twice before accepting new local authority contracts because the authorities are not able to pay a fee which covers the cost of care for their residents.
“Parliament should no longer turn a blind eye. To have vulnerable care home residents, many of whom are self-funding out of their lifetime savings, pay an inflated price in care home fees, simply to prop up the market, is unacceptable.”
Care Planning Services brings together legal professionals and independent financial advisers to give families and individuals expert advice on how to fund and plan care in later life.