OFT welcomes Government response to care homes market study

157/05 17 August 2005

The OFT welcomes today's positive response to its care homes report from the English, Scottish, Welsh and Northern Irish administrations and the national regulators.

The OFT particularly welcomes the Government's recognition of its key recommendation that there should be a central source of information, or one-stop-shop, to allow easy access to information about care homes. The OFT report found in May (see note 1) that older people and their representatives face significant problems in finding information about moving into a care home, often at a time of difficult and distressing circumstances.

The OFT also welcomes commitments from the national care homes regulators to ensure that written contracts are in place for all care home residents in line with the minimum standards and regulations for care homes.

One OFT recommendation – that top-up payments must be routed via local authorities – has not been fully accepted, although three administrations have said they will take steps to ensure that the existing legislation and guidance in the area of pricing is adhered to (see note 5).

The Government's response to the OFT market study comes at the beginning of a wider process of improvement in care provision for adults generally. The OFT is greatly encouraged by the support for and commitments to its recommendations, and looks forward to their successful implementation.

Sir John Vickers, OFT Chairman, said:

'Choosing a care home is a major and difficult decision. Older people and their families need good information when making choices about their future care and need to know that they will be protected from unfair contracts. Implementing the recommendations in our report, together with continuing OFT work, will help the care homes market work better for the public.'

NOTES

1. Download the OFT's report Care homes for older people in the UK (pdf 1,158 kb).

2. In December 2003, the Consumers' Association (now Which?) submitted a super-complaint regarding the care homes sector on behalf of an umbrella organisation called SPAIN (Social Policy Ageing Information Network). SPAIN's members include Age Concern, Help the Aged, The Association of Charity Officers, and the Alzheimer's Society. The OFT said it would treat this as if it were a formal super-complaint. On 3 March 2004 the OFT announced that it would conduct a market study. The announcement is available from the super-complaints area of the site. Further information is also available from the market studies area of the site.

3. In March 2005 the OFT took enforcement action against unfair terms in 10 care homes operators' contracts. See press release 51/05.

4. Under the Enterprise Act 2002 designated bodies can make super-complaints to the OFT, which the OFT must respond to within 90 days. The Enterprise Act also gives the OFT powers to examine whether markets are working effectively for consumers. The OFT announced its intention to launch a market study into care homes for older people in the UK on 3 March 2004. The study was launched on 29 June 2004.

5. Current guidance states that when making arrangements for residential care for an individual under the National Assistance Act 1948, an Authority is responsible for the full cost of that accommodation. Where an Authority places someone in more expensive accommodation chosen by the resident, it must contract to pay the accommodation's fees in full. Under the Act it is open to Authorities to agree with both the resident and the care home that, instead of paying a contribution to the Authority, the resident may pay the same amount direct to the care home, with the Authority paying the difference. However, even where there is an agreement for the resident to make payments direct to the care home, the Authority continues to be liable to pay the full costs of the accommodation should either the resident or relative fail to pay the required amount.

6. In Scotland, a new topping up arrangement (from 2002) can only be established if, in the opinion of the Authority, the resident or third party is able and willing to pay the difference. The restriction is important for reducing the chances of a person eventually having to move because the payments can no longer be met. It applies to all new arrangements. There is no such decision required for existing topping up arrangement.

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