PRIVATE care homes for the elderly could close because they cannot pay staff the going rate, according to their owners.

Simon Beckett, chairman of Care North-East, which represents the region's independent care homes sector, said underfunding by local councils could lead to homes closing.

Local authorities use independent care homes and pay them a rate per occupied bed. But Mr Beckett said the private sector is finding it virtually impossible to recruit and retain trained staff as it cannot match local authority wages.

He said: "Local authorities do not pay independent care homes the true cost of care, yet they provide their own homes with considerably more funding. The funding situation is completely unbalanced and we are facing a real recruitment crisis, which could ultimately result in the closure of homes."

Redcar and Cleveland Borough Council pays local authority homes £489 per week per bed, while independent providers are paid a maximum of £332 per bed per week.

Its director of health and social care, Maurice Bates, said: "We are talking to the private sector all the time about the sort of support councils and primary care trusts can give them. For example, we have started to implement block contracting for some private sector businesses in order to guarantee their income. And our health and social services scrutiny committee has agreed to look at private sector fees."