News

Care home organisations have hit out at the Office of Fair Trading’s decision not to cover fees paid by local authorities for publicly funded clients in its investigation into price transparency in the care home sector, writes Derren Hayes.

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

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

The OFT’s investigation is in response to an informal super-complaint brought by the Consumers’ Association over concerns that privately funded care home residents weren’t getting a fair deal on the services they received and the price they paid.

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

Frank Ursell, chief executive of the RNHA, 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.

“There is overwhelming evidence 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.”

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