Care homes will be closed to new admissions

Scottish Care, which runs more than 800 homes, said it would prompt a "crisis like never before" unless it was granted an improved fees offer.

The group unanimously rejected a "take-it-or-leave it" deal from the Scottish Executive and the Convention of Scottish Local Authorities (Cosla) at an extraordinary general meeting.

From next Thursday homeowners will terminate their contracts with local authorities and serve out notice periods of up to six months.

Withdrawing its offer

After that Scottish Care members will only accept new admissions at rates which are about �50 per person per week more than currently offered.

After the meeting the executive responded by withdrawing its offer while Cosla accused the homeowners of being "impossible to deal with".

Scottish Care called for a Royal Commission to set new fee levels and vowed to sue local authorities if they failed to offer a better deal.

The new, non-negotiable rates were put before the organisation by deputy health minister Frank McAveety and Cosla president Pat Watters.

Under the offer, homes would have received �406 per week per person for nursing care and �346 for residential care.

More homes will close because we cannot keep going on money that is inadequate Joe Campbell Scottish Care

This compares with recommendations by the independent Joseph Rowntree report which concluded nursing care would cost �459 per person per week while residential care would cost �400.

Scottish Care chief executive Joe Campbell said: "Our members have received an offer from the Scottish Executive and Cosla which is totally inadequate and we have had to reject it.

"We will honour our contracts as they exist but when the period of notice finishes we will say we cannot accept elderly people at the rates we are being paid."

Mr Campbell warned if the dispute was not resolved the implications would be far-reaching.

"More homes will close because we cannot keep going on money that is inadequate," he said.

Cost of care

"Anybody that is with us now has nothing to fear as long as we can possibly stay solvent.

"If businesses go bust then local authorities will have to assume responsibility for their care."

Mr Campbell said Scottish Care had met with the Executive and Cosla in October 2001 and had agreed a timetable to establish the true cost of care.