YOUR correspondent Herzl Hamburger (Your Letters, April 11) made several comments about Bury Council's approach to paying owners of private nursing and residential care homes. I thought readers may find it helpful to know the facts.

Firstly, he asks why Bury Council pays private home owners less per client per week than other councils. The answer is quite simple -- Bury Council is funded at a vastly lower level than other councils. For example, Bury receives £206 less in grant per person than Oldham Council. So one reason why Oldham can afford to pay fees at a rate that is 20 per cent higher than Bury is because they get 30 per cent more grant than we do.

Bury Council also has more elderly people in residential and nursing homes than all but two other councils and so, with a very low funding base, we find it extremely difficult to pay the rates that other councils do.

Mr Hamburger also asks what happened to the extra £9.6million grant made available for 2003-04. In fact the funding that we received from the Government by way of grant and income from non-domestic rates went up by £14million, made up of the £9.6million mentioned by Mr Hamburger together with amounts paid to compensate the council for additional duties and loss of cash grants. This is intended to help pay for all of the council's services, not just care for the elderly.

However, in setting our budget we faced cost increases totalling more than £21million, the vast majority of which we had no choice but to meet. These costs included the effects of inflation (£6.2million), additional funding for our schools (£9.9million), increased insurance costs (£2.5million), the effects of the National Insurance increase that will help the NHS (£500,000), reductions in grants (£1.4million), an imposed increase in costs for transport and waste disposal (£900,000), increased pensions costs (£400,000). We also made an extra £200,000 available to develop our youth services and £115,000 to improve recycling rates within the borough.

Also, in recognition of the points made by the private home owners we have provided £300,000 of funding, over and above inflation, to allow a "real terms" increase in the fees that we pay. The Social Services budget alone has had over £3million of cash injected into it to meet all of these unavoidable costs.

It is also worth pointing out that service directors identified other costs pressures, totalling some £5million, which the council was unable to fund and the directors will have to meet these out of their existing budgets. Despite having had £3million extra cash, social services will have to absorb around £3.3million of other pressures and this is before any increase in payments to private homes over and above that already budgeted for.

Despite taking this very hard line we were still left with a shortfall of some £7million. We met part of this gap by making savings, meaning that the remainder had to come from either major cuts in services or from the council tax. We looked carefully at whether we could make more savings but felt that the effect on services would have been too severe and we were therefore left with no choice but to increase the council tax by 11.7 per cent.

To pay a further £100 per week to the private providers would in fact cost £3million a year and given that our government funding is fixed, Councillor John Byrne was right to say that we would have had no choice but to add a further six per cent to the council tax. It would be interesting to know how Bury Times readers would have felt about that.

Finally, Mr Hamburger is wrong to say that the council pays itself more than it pays to the private homes. In fact we simply cover the costs of running our own homes.

MIKE OWEN,

director of finance and e-government,

Bury MBC.