OFT fees investigation “too narrow”

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

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’

“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


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