Feature

posted 10 Oct 2005 in Volume 10 Issue 6

Office of Fair Trading report into care homes

Pauline Thompson of Age Concern considers the government’s response to the OFT study on the care-home sector.

The Which? complaint and action taken

Advisers who have been involved in the process of finding a care-home place for an older person will be aware of the difficulties it poses. Where there are relatives, they often need advice both in finding a home and working out how much it will cost.

Advisers who act for older people, or who may be receivers or attorneys, have to be extra vigilant to be sure they know their way round the complex benefits and charging rules, and what the respective responsibilities are of care homes , the regulators and local authorities and, in some cases, the NHS.

In May of this year, the Office of Fair Trading (OFT) published the results of the market study it undertook in response to the so called ‘Super Complaint’ made by Which? in December 20031.

Super Complaints come under the Enterprise Act 2002 and give the OFT new functions to carry out market studies where the complaint is regarding the way a market in general may be failing individuals.

The government had 90 days in which to respond, with the Department of Trade and Industry co-ordinating the response of the relevant government departments.

This article

The government response (with each of the four national regions of the UK responding individually) was published on 17 August 20052. The responses are in the form of action plans. The relevant regulatory bodies also responded.

This article covers the response from the English Government. There are some slight variations between the government responses, largely reflecting the different positions from which they are starting.

The original OFT report

The areas the OFT report covered were:

Information about moving into a home;
Local-authority obligations to self-funders and third parties;
Price transparency;
Contracts;
Access to making complaints.

The research included a survey of older people living in care homes; a survey of care homes; a ‘mystery shopping’ exercise; and a survey of authorities across the UK.

In addition there were consultations with care homes, consumer groups, central and local government departments, regulatory bodies and research bodies. In addition to the report there are a number of annexes detailing the results of the different aspects of the survey.

Some of the key findings of the research are:

Of local-authority (LA) funded residents, 30-35 per cent were relying on top-ups from friends or relatives to make up the difference between what the LA is prepared to pay and the cost of the home;
Only 14 per cent of LAs provided information showing which homes did not require a top-up;
Of LA’s surveyed, 40 per cent suspected more top-ups were being paid than they knew about;
The survey of care homes showed that 39 per cent of top-ups were paid directly to the home;
Of care homes contacted in the mystery-shopping exercise, 12 per cent failed to provide information about their fee levels even after persistent prompting. Only 33 per cent provided information without prompting;
In the mystery shopping, 34 per cent of homes provided no information about the circumstances when fees would change, even after prompting;
In England, 32 per cent of postcodes have five care homes or fewer within a three-mile radius (on average there were twelve homes within a three mile radius). In Scotland, NI and Wales 67 per cent of post codes have five or fewer care homes within a three-mile radius;
Of the 152 contracts looked at as part of the survey, 66 per cent had more than one fee-related term that the OFT considered was potentially unfair, with six per cent having no fee-related terms;
Of residents interviewed, 52 per cent said they had not been given any information about their care home’s complaints procedures, and of those who had, 42 per cent had only been provided with oral guidance.

OFT recommendations

The OFT made a number of recommendations to try to address concerns identified by the research and give consumers greater protection.

On information:

1. A one-stop shop should be available as a single point of reference for information about the process of choosing a care home; clarifying the guidance to LAs on their role in helping people through the processof choosing a home;

2. Care homes should provide new residents with a copy of the latest inspection report when moving into a home;

3. The guidance to LAs should make it clear that self-funded people with an assessed need should have the same access to advice and assistance on choice as older people receiving public funding, and should be guided during the whole process of setting their care needs if they so wish;

4. Care homes should provide the price of accommodation and residential or nursing fees in writing prior to the older person making a decision to enter a home.

Both the government and the Commission for Social Care Inspection (CSCI) largely responded positively to all these recommendations. The aim is to bring together a number of strands through Link-age and Directgov (the Directgov website has recently placed some information about care homes in its over-50s section)3.

The CSCI will explore the possibility of making the fee information supplied to inspectors available, and issue new guidance to inspectors to stress the importance of homeowners giving fee information to prospective residents. It is also exploring the feasibility of using mystery shopping exercises to ascertain how both local authorities and service providers respond when they are approached by members of the public who need help to access care services.

The government response to the recommendation about self-funders was less encouraging stating that “to provide full support to all older people who are funding their own care would represent a significant expansion of the statutory role of social services”. This is in contrast to the Welsh Government, which has already issued guidance, saying: “Self-Funders should be provided with the same advice, guidance and assistance on choice as those individuals who are fully or partly public-funded4.” However, the English Government has said that in taking forward the Green Paper proposals it will consider the needs of those who fund their own care.

On third-party top-ups:

1. Improving the guidance available to older people and their representatives on top-ups should be a priority;

2. There should be a clear statement by LAs that anyone entitled to help with funding from the LA, does not need to secure a top-up to find a care home that is suitable for their needs;

3. In the care home, directories listing the services offered by all the homes in the area should be included, together with the level of funding the LA generally makes available, as well as those care homes that usually require additional payments above the amount the LA is prepared to pay;

4. Legislation should be amended so that LAs are responsible for contracting and paying the full costs of the accommodation, including any top-up fees (which are then recovered by the LA from the third party).

The government only directly responded to the last of these recommendations by rejecting the proposal that all third-party top-ups should be routed through the local authority. It did this on the grounds that people should have the choice of how they pay the care home.

However, the government did point out that local authorities are responsible for meeting the full costs of accommodation, including any top-up fees, and accepted that this did not always seem to be happening.

The government was also concerned that in practice local authorities may be imposing net payments on residents, rather than offering them a choice of whether they would like the authority to pay the home gross and the resident and third party pay their contribution to the local authority. It will work to ensure practice reflects the legal position.

On contracts:

1. Care homes should ensure that all residents are provided with a written contract or statement of terms and regulator monitoring that this is done;

2. The OFT will support work being undertaken on model terms for LA contracts – alerting care homes to OFT guidance on unfair terms and encouraging trade associations to draw up model consumer contracts.

The government and CSCI responded positively, with CSCI stating it would put a prompt to confirm the commitment to issuing fair and transparent contracts and some random themed inspections, and develop an agreement with the OFT as to what factors should prompt a CSCI inspector to refer a contract to the OFT.

Work is in hand on model terms for local-authority contracts with care homes and should be completed by the end of 2005.

On complaints:

1. The production of a document by care-home regulators, which brings together the avenues for complaints should be included in information provided by care homes;

2. There should be pilot studies of advocacy services for older people to measure the benefits;

3. There should be improved collection of data on complaints with the publishing of the outcomes of substantiated, non-trivial complaints.

In its response, CSCI committed to producing a document about complaints avenues and are planning improvements to their recording of complaints. It is also planning to include information about substantiated complaints in the summary of their inspection reports.

The OFT had declined to research the question of the adequacy of local-authority funding and whether their market position means that fees of publicly-funded residents are being subsidised by self-funders.

The research showed that about one in five homes charge self-funders more than LA-funded residents for a similar room and similar care. It was reported in the Telegraph (21 May) that the OFT has invited anyone with evidence of cross-subsidy to contact them.

Special concerns for advisers

The finding of 66 per cent of the contracts having potentially unfair terms in relation to fees, will be of concern to advisers.

On 21 March 2005 the OFT issued a press release stating that they had sought and received undertakings to change their contracts from ten care-home operators: Brunelcare, BUPA, Four Seasons, Elizabeth Finn Trust, Orchard Manor Private Nursing Home, Professional Health Care, Sanderband Ltd; Southern Cross Healthcare Ltd, St Nicholas Healthcare Ltd, and Westminster Healthcare (UK) Ltd5.

Some of these changes are now on the website and it may be of interest to advisers to look to see the sorts of terms the OFT found to be unfair, as they may well find that other care homes have similar terms to those that had to be changed.

The OFT has issued guidance on unfair terms and conditions also on the OFT website6.

Advisers may well also be concerned about the number of authorities that considered that they were not always aware of what top-ups were being paid in their area. It begs the question how they can commission properly and ensure that top-ups are not routinely required if they do not have this basic information.

Comment

For those involved in the initial Super Complaint7 and then the market study, it has been an interesting and well worthwhile exercise.

Although the OFT did not cover all the areas we would have liked in the Super Complaint, the study that they undertook was very thorough and came at the problems that we find in social care from a different angle via consumer legislation.

Because Super Complaints require a response from the government, it raised the whole debate again of the problems older people face when they move into a care home, and the support they need to do so.

The research undertaken by the OFT provides a solid base of evidence from which to work for improvements. Some local authorities undertook an audit of how they measured up to the OFT’s report. It is certainly a useful document for providers to quote at local authorities, providers and regulators if you consider that the information they are giving is lacking or unclear, or if you think authorities are routinely expecting relatives to top-up fees.

It remains to be seen whether it does bring some positive changes. Hopefully this work will provide a catalyst for change to improve practice across all the players in this market.

References:

1. The link to the report Care homes for older people in the UK and all the annexes are at www.oft.gov.uk/business/market+studies/care+homes.htm

2. The link for the English response is www.dti.gov.uk/ccp/topics2/carehomes.htm

3. It is though not easy to find! The link is http://www.direct.gov.uk/Over50s/HomeAndCommunity/HomeAndCommunityArticles/fs/en?CONTENT_ID=10022322&chk=dnD82V

4 NAFW 46/2004

5. www.oft.gov.uk/news/press+releases/2005/51-05.htm. Details of the changes required are in the process of being posted on the website at http://www.crw.gov.uk/Undertakings+and+court+action/Sorted+Investigations/Trader.asp (look up the individual home by initial).

6. www.oft.gov.uk/news/press+releases/2004/12-04.htm

7. Although the Super Complaint was made by Which? it was supported by the Social Policy Ageing Information Network, a coalition of mainly voluntary organisations that worked together to supply the information for the original complaint.

Pauline Thompson is policy adviser at Age Concern. She can be contacted at thompsp@ace.org.uk