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Christine Paley ...
Christine Paley

The office of fair trading responded to the Consumers' Association's 'super complaint' on care homes in March, which centred on a charge that the care home market is not working well. It highlighted many reasons for this, including the failure of public authorities to cover the cost of providing care homes. This was leading, it claimed, to cross subsidisation between residents with private residents paying higher fees, to cross subsidise publicly funded residents.

The OFT did not think it was appropriate to investigate these particular concerns. It pointed out the complexity of the care home market, where health and social care policies interact with market provision.

Concern about the level of government funding, particularly pertinent in view of the recent spending review by government with just a 2.7% allocation for social care, were highlighted. The OFT made it clear the level of funding by public authorities is a policy issue for the funding department to determine, rather than for the OFT to address.

Helpfully it puts the problem of cross subsidy in the context of the overall market mechanism: 'Independent care providers [are] not legally obliged to accept publicly funded residents, [so] care home providers could instead reposition themselves away from publicly funded residents.'

This pinpoints the real issue - that it isn't in councils' best interests to pay prices which are so low that the market fails for them. While I am sure it will be disappointing to independent providers that the OFT has chosen not to intervene in this matter, it does not let councils off the hook in tackling this issue.

The OFT will look into the implications for the market of people choosing a care home in a hurry. It will look at the impact on competition in the market, price transparency and the ease in which prospective residents can obtain sufficient clear and accurate information on fees and services and whether contracts offer sufficient transparency and protection against unreasonable price increases. I can't argue with any of that.

Christine Paley

Director of housing and social care, Thurrock BC, and joint chair of the Association of Directors of Social Services' Older People Committee

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