A council is to spend £1 million when independent care homes raise their fees to meet Government recommendations.
East Sussex County Council is to use part of an estimated £3.5 million windfall to meet the increased care home charges.
Deputy council leader Daphne Bagshawe said fees in the county had fallen so low neighbouring authorities were moving their older people into the county.
Fees are scheduled to rise to £230 a week next month, the figure recommended by the Government. Another increase is due in April.
Tony Andrews, of the East Sussex Residential Care Home Association, said the county had lost about a fifth of its beds, increasing the risk of bed blocking in hospitals.
He said: "Assuming they have made this uplift across the board then it goes a little way, only a little way, to paying an appropriate price for residential care."
The council is reviewing the future of its own care homes, many of which could close.
The council has an extra £3.5 million to spend because it will get more money than it expected from the Government next year.
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