Care homes

Name of complainant: Consumers' Association

Date of complaint: 5 December 2003

Subject of complaint

Consumers' Association (CA) states that it does not believe that the market for care home services is working well.

The key concerns that the CA recommend the OFT to investigate are:

• whether the fees paid to care homes by public authorities cover the full cost of providing the service
• whether the lower fees paid by public authorities force relatives to cover the real cost of care (through top-up fees and payments for extras)whether there are cross-subsidies between residents (with self-funded residents having to pay higher fees in order to cross-subsidise publicly funded residents)
• whether either purchasers (public authorities) or providers (care homes) have dominant positions at a local level
• whether information flows before and after residents' choice of a care home are sufficient
• whether contracts are clear and fair
• whether consumers' financial independence is respected
• whether consumers can get sufficient redress in this sector
• whether consumers are sufficiently protected by legislation
• the role of regulators in helping consumers
• regional differences in legislation.

OFT response: 3 March 2004

Having considered the super-complaint and conducted preliminary enquiries, analysis and research, the OFT consider that the following features may be significantly harming the interests of consumers and should be examined further by the OFT through a market study under the Enterprise Act 2002 (EA02):

• the context in which older people and their relatives make choices about a care home and how this affects competition in the market
• the ease with which prospective residents and their representatives can obtain sufficient clear and accurate information on fees and extra charges
• whether contracts offer sufficient transparency and protection against unreasonable price increases.

Action following response

The OFT launched a Market Study into Care Homes.

Key documents

• OFT press release OFT action on care homes complaint 5 December 2003
• Letter from Chairman to Consumers' Association (pdf 60 kb) 3 March 2004
• OFT press release OFT to examine price transparency in the care homes sector 3 March 2004
• OFT's Response to the super-complaint on care homes made by the Consumers' Association (pdf 232 kb) 3 March 2004
• OFT press release OFT launches care homes study 29 June 2004.

Back to: Super-complaints