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Care home competition inquiry to scrutinise funding practices

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The funding of care homes is to come under scrutiny as part of a new study by the UK’s competition regulator.

The Competition & Markets Authority market study will evaluate the effectiveness of competition between care homes in driving quality and value for money for both residents and taxpayers, as well as considering how councils purchase care home places and “encourage and shape local supply”. This will include looking at the markets for residents who are self-funded and those who are funded by their local authority.

The statement of scope setting out what the CMA will consider acknowledged widespread concerns about funding and sustainability of the care home sector but said this was an issue for government. However, the CMA will consider “how care homes set fees for both local authority and self-funded residents”.

Last week Care England chief executive Martin Green warned providers would increasingly pull out of markets with few self-funders as the fees being paid by councils were unsustainable. It is widely acknowledged that in many places fees paid by self-funders are used to cross subsidise low local authority fees.

CMA acting chief executive Andrea Coscelli said: “We are undertaking a thorough review of the sector to make sure it works in the best interests of those who rely on it.

“We want to hear from care home providers about the services they offer and any challenges they face, as well as residents, families and charities who have experienced what it’s like to choose and live in a care home.

“Given the concerns we have heard about possible breaches of consumer law, we particularly want to hear from people who think they might have encountered unfair terms or practices.”

Comments on the issues raised in the statement of scope should be sent to the CMA by 16 January. An interim report is due in May 2017 with a final report expected in November.

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