Care England takes legal action over Essex County Council care home fees
A council is facing legal action over the level of fees it pays to care home providers for looking after residents.
Care England, a body representing adult care providers, said it was "deeply concerned" about the state of the care home market in Essex.
It has brought judicial review proceedings over the rates Essex County Council pays homes, which one care provider described as "unsustainable".
The council said it was committed to "a sustainable social care market".
Sean Watson, one of the directors of St Michael Homes Ltd in Brentwood, said Essex County Council currently paid £483 per week per resident, compared with private residents who paid £650 a week.
"Lots of care homes who depend on council-funded residents are closing down or providing a poor service and you can't really blame them because they haven't got funding to back them," he said.
"This was a growing issue in the early 1990s, but it's much worse now with increasing demand on services for the elderly, and rates the council pays us not going up for years or increasing in line with inflation."
Care England said the review sought to "challenge the lawfulness of the council's fee setting decision", adding it believed the council's actions to date were "a breach of its responsibilities under the Care Act 2014".
Mr Watson said the lack of funding was likely to put homes off accepting social services-funded residents in future.
"Care homes can't sustain the low fees with all the increases in wages and the Care Quality Commission demanding ever more of the service with no increase in fees," he said.
An Essex County Council spokesman said the authority could not comment on the specifics of the case because of legal proceedings, but he said it took its obligations under the Care Act 2014 "extremely seriously".