LANCASHIRE County Council is to increase the fees it pays to nursing and residential homes for care of the elderly by well above inflation.

The authority will spend an extra £1.7million in payments average 6.3 per cent per individual placed.

The increased payments will be made to 340 Care Quality Registered establishments across its 12 boroughs which include Burnley, Hyndburn, Ribble Valley, Pendle, Rossendale and Chorley.

News of the increase, due to be rubber-stamped by the authority's adult care boss and Burnley Central West councillor Tony Martin on Wednesday, comes as a BBC survey warned more than a quarter of care homes in the UK are in danger of going out of business within three years.

The rise is backdated till April 1 and sees a minimum increase of 4.54 per cent for standard nursing care to £587.66 a week.

Nursing dementia placements will see the fee paid to providers rise by 16.04 per cent to £673.04 weekly.

Residential weekly rates will rise by 8.53 per cent to £416.72 for standard care, 8.58 per cent to £470.15 for higher care and 9.52 per cent to £504.35 for dementia care.

Cllr Martin said: "We are responding to representations from the care home providers' national body.

"It is essential we pay enough to keep care homes viable and to ensure the highest standards for residents and their families.

"It is not as much as they asked for but is the most we could afford.

"Despite the cuts the county council is facing for the government, the care of Lancashire's elderly residents is our top priority."

Blackburn with Darwen council resources boss Andy Kay said: "We keep the fees we pay to nursing and residential homes for the care of elderly people under careful review.

"It is important that they remain viable and provide a high standard for residents."

The BBC Radio Four study suggested about 5,000 homes are at risk of closure because they carry too much debt and do not make enough profit to cover loan repayments.

Former Age Concern director general and Lancashire Telegraph columnist Gordon Lishman said: "This increase is to be welcomed in view of the county council's financial problems but it is still inadequate.

"The responsibility for resolving this criss does not rest with local authorities but with the government."

The Department of Health said it was working to make sure care providers had "strong contingency plans."