A CONSERVATIVE-led council facing intense financial pressures over rising private care home fees is examining launching a public sector takeover of some services.

It has emerged North Yorkshire County Council is reviewing ways in which it can intervene in the adult social care market as the authority is forecasting a £5m overspend on the service this year, despite pumping an increasing share of its dwindling budget into the area.

Over the past three years the council has sought to increase the number of businesses it owns to bolster its budget, launching enterprises such as a property development arm, and last year it became the first local authority in the North to trade its legal services.

A meeting of the council’s care and independence scrutiny committee heard 52 per cent of care home providers in the county were demanding more than the set county rate, which had been increased annually in line with inflation, the national living wage, pension costs and other factors.

Adult social care assistant director Anton Hodge told members the issue was particularly acute in the Harrogate area where more than 90 per cent of care providers were demanding more than the set county rate.

He said: “If we were to pay everyone at the county rate it would cost about £15m less, so it would wipe out the £5m deficit and then have some spare.”

Mr Hodge said the authority was looking at introducing a number of different care home rates across the county, which it is understood would take account of higher costs being faced by providers in some area.

Pateley Bridge councillor Stanley Lumley said the rising care home fees in areas such as Harrogate was presenting “a real challenge”.

He said: “That is not going to get better – it is only going to get worse. They have got us over a barrel, but there’s no alternative, we need to provide that care. Does there come a point when it’s more sensible to invest in a facility that we run as North Yorkshire County Council and take some of that burden off? There must be a tipping point when the cost of the private sector becomes completely unacceptable.”

Mr Hodge replied that the authority was reviewing a range of options to intervene in the market.

He said: “We are looking at if we can get more involved in care home models and owning or part-owning. The issue we have is that the actual projected costs is a bit more than some providers because of our pay rates and pensions. However, there are other ways in which we can intervene in the market. Nothing is off the table at the moment.”

After the meeting, the authority’s deputy leader, Councillor Gareth Dadd said the council’s infrastructure might enable it to provide care home services more cost effectively.

He said: “The council is going to face similar challenges over the cost of wages and other costs being higher in some places than others. If we can deliver better services that cost less then we will pick up that slack. We are not ideologically opposed to it.Whatever works best for the residents of north Yorkshire we will do.”