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Market Study - Care Homes

On 18 May 2005, the OFT published a report on the market for care homes for older people in the UK. This study followed an informal ‘supercomplaint’ from the Consumers’ Association.

The report made the following recommendations for changes in the law:

• to require care homes to provide full breakdowns of fees in writing to residents before they decide to move in;

• to require local authorities to contract and pay for the full costs of accommodation, including any top-up fees, and recover any contributions from residents or third parties;

• to require care home regulators to produce guidance on redress avenues and make this available via care homes.

The Government responded on 16 August 2005. The response welcomed the report which highlights some key areas in which the care homes market is not serving consumers satisfactorily.

The Government has broadly accepted OFT’s recommended solutions to the problems identified, but has decided not to require that all care home payments for people receiving any council funding be directed through the council as this would reduce choice for older people and their families. However, where relatives choose to pay for a home that costs more than the council will usually pay, the local council contract with the home should show the full costs of accommodation (not just what the council’s paying) so that there is no confusion about who is paying for what.

The Department of Health is responsible for policy on care homes, and they will take the lead in implementation of the response. The Commission for Social Care Inspection has also responded.

As policy on care homes is a devolved matter, the Scottish Executive, Welsh Assembly Government and Department of Health, Social Services and Public Safety in Northern Ireland have made their own responses.