Care homes

Launched: June 2004

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Purpose of the study

To examine:

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

Information indicating possible breaches of competition or consumer legislation to be investigated further to determine whether enforcement action appropriate.

Study followed super-complaint.

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Findings

The findings showed:

1. There is confusion about what advice and support authorities should be providing to older people and their representatives.

2. Many older people and their relatives lack information about care homes' fees and services and about the terms and conditions of living in a care home.

3. A large number of contracts are potentially unfair or have unclear fee related terms, allowing homes to introduce arbitrary fee increases.

4. Older people and their representatives have particular difficulty making complaints, including lack of awareness of avenues of redress.

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Recommendations

The recommendations of the study were:

1. Authority directories should cover all homes in their areas and list those that require top up fees. Care homes regulators to police this.

2. Care homes regulators should make their inspection reports more available by publishing on-line. Care homes should give copies to residents.

3. Government should establish a central information point or 'one stop shop' where people can get clear information about care for older people.

4. Government to clarify guidance so that self-funded residents get the same level of advice and assistance as publicly funded residents.

5. Authorities to provide guidance on care to self-funded older people. Care homes inspectorates to police this.

6. Authorities to ensure their guidance states that publicly funded residents don't need to pay top-up fees.

7. Care homes to provide prices before residents move in and ensure all their residents have contracts.

8. DoH to amend legislation and guidance to ensure local authority pays full cost of care (including any top-up - which it can then recover from the third party payer).

9. Regulators to improve guidance on, and handling of, complaints.

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Action following market study

The government:

• Recognised OFT's key recommendation - to create a one-stop shop to allow easy access to care home information. In August 2004 DWP published Link Age: developing networks of services for older people, which should cover this.
  
  
• Did not fully accept the recommendation that top-up payments must be routed via local authorities, although three administrations said they would take steps to ensure the existing legislation and guidance in the area of pricing was adhered to.
  
  
• Rejected the proposal that information for self funded residents be provided by authorities but said that CSCI would look into ways of making fee and other information more widely available. Its website has been updated to provide more information.
  
  
• Announced a wider review of health and social care regulation.
  
  
• National care homes regulators committed to ensure written contracts are in place for all care home residents.
  
  
• OFT alerted care homes to guidance on the UTCCRs and guidance on unfair terms in care homes contracts, and took action against a number of care homes under UTCCRs.
  
  
• OFT delivered UTCCRs training to care homes inspectors.

In 2008, OFT reviewed undertakings provided to OFT between 1 January 2004 and 1 January 2008 by 13 care homes.

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Market study details and report

See press release OFT call for better care homes information 18 May 2005

Download Care homes for older people in the UK May 2005 (pdf 1.1Mb)

• Annexe A (pdf 292kb) Authority obligations and guidance
• Annexe B (pdf 585kb) Survey of Authorities
• Annexe C (pdf 504kb) General research findings
• Annexe D (pdf 315kb) Methodology
• Annexe E (pdf 558kb) Survey of providers of residential and nursing care homes for older people
• Annexe F (pdf 1.7Mb) Survery of older people in care homes
• Annexe G (pdf 1.4Mb) Care homes mystery shopping
• Annexe H (pdf 487kb) Case studies of elderly consumers choosing a care home
• Annexe I (pdf 278kb) Complaints procedure
• Annexe J (pdf 290kb) Regulatory framework
• Annexe K (pdf 606kb) Consumer behaviour and care homes - a literature assessment
• Annexe L (pdf 257kb) Paying for care
• Annexe M (pdf 104kb) Organisations that were consulted

See press release OFT welcomes government response to care homes market study 17 August 2005.

See the Government's response to the study on the Department for Business, Enterprise and Regulatory Reform website August 2005.

See the Scottish Executive response to the study August 2005.

See the Welsh Assembly Government's response to the study August 2005.

See the Department of Health, Social Services and Public Safety Northern Ireland response to the study November 2005.

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Background Information

The study follows an informal super-complaint by the Consumers' Association on 5 December 2003.

See press release OFT launches care homes study 29 June 2004

See a list of organisations that provide information and help regarding care homes in the UK.

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