A housing association has criticised controversial plans to introduce bed-blocking fines for social services departments.
Sussex Housing and Care says government proposals will threaten the already depleted care available for elderly people in the county.
It says the proposals, coupled with plans to slash local authority funding, could lead to major problems.
The Lewes-based association, which manages five residential care homes and 18 warden-assisted sheltered housing schemes, provides accommodation and care for about 700 older people in the county.
Chief executive Michael Goulden said: "We often have to subsidise the cost of an older person's place in one of our homes by as much as £80 per week and we are heavily reliant on the generosity of the public to raise these funds.
"The funding from local authorities is simply not enough and this puts an enormous strain on not-for-profit housing associations like us.
"Further cuts planned by the Government could be disastrous for everyone's future."
Under the plans, social services will be fined up to £120 for every night a patient stays in hospital unnecessarily.
It is believed this could leave Brighton and Hove City Council with a £1 million bill while in East Sussex the figure could be as high as £2.5 million.
West Sussex, which has a large elderly population, could face even higher costs.
Mr Goulden said: "This proposal would appear to make sense, especially when it costs so much more for a patient to stay in an NHS hospital than in a residential care home.
"However, if the Government cuts funding for older people's services to local authorities by such a huge amount, it is difficult to believe that older people are being put first."
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