Care homes attack limited scope of fees investigation as a ‘cop-out’

Organisations have hit out at the Office of Fair Trading’s decision
to exclude fees paid by local authorities for publicly funded
clients from its investigation into care home price

The Registered Nursing Homes Association branded the news a
“cop-out” that would allow the role of the main funder of nursing
home care to go unscrutinised.

About 60 per cent of residential and care home clients have their
fees paid by social services.

The association said the OFT was undermining the validity of the
investigation by turning a blind eye to the effect that local
authorities’ decisions had on the market.

The investigation is in response to a “super-complaint” brought by
the Consumers’ Association over concerns that privately funded care
home residents were not getting a fair deal on the services they
received and the price they paid (news, page 10, 11 December).

The study will examine how relatives make choices about a care home
and how this affects competition in the market; how easy it is to
obtain clear and accurate information on fees and extra charges;
and whether contracts offer enough transparency and protection
against unreasonable price increases.

Association chief executive Frank Ursell said: “Local authorities
are the major purchasers of nursing home care.

“If they refuse to pay an economic rate and insist on keeping the
price of care down to a level where care providers make a trading
loss, this is fundamental to the price which nursing homes have to
charge patients who are funding their own care.”

Joe Campbell, chief executive of the English Community Care
Association, cautiously welcomed the investigation but also
expressed disappointment about the omission of councils’ role.

He said: “There is overwhelming evidence that local authorities are
not paying the true cost of care. It is therefore self-evident
that, in order to survive, providers have to look for other forms
of funding, such as top-ups.”

The OFT believes that the issue of council fees has been covered in
the recent BetterCare decision it made under the Competition Act
1998, which stated that paying low fees was likely to amount to an
abuse of a dominant position only in exceptional circumstances.

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