1. This document is the final report of the Competition and Markets Authority’s (CMA’s) market study into residential and nursing care homes for older people.
2. We have looked at how well the care homes market is working, for self-funders who purchase care services themselves, as well as for those individuals whose care is funded by the state. The market needs to work well for current and prospective care home residents; they must be able to make well-informed choices, and must be protected if things do not work out as expected. But also, the market must support the state’s intention to ensure that all those who have care needs have them met. This requires that the industry is sustainable, so that efficient care home providers can continue to operate, and that the sector is positioned to invest to meet growing future needs.
3. We have identified two broad areas where we have found problems in the market:
(a) those requiring care need greater support in choosing a care home and greater protections when they are residents.
(b) the current model of service provision cannot be sustained without additional public funding; the parts of the industry that supply primarily local authority (LA)-funded residents are unlikely to be sustainable at the current rates LAs pay. Significant reforms are needed to enable the sector to grow to meet the expected substantial increase in care needs.
4. As set out below, we have made a set of recommendations to governments, sector regulators, LAs, and the industry. In addition, we intend to take action to protect residents’ rights and compliance with consumer law.
Overview of the sector
5. This is a hugely important sector. Choices on care are an incredibly important decision taken by or on behalf of individuals who are often extremely vulnerable. The nature and quality of care has a massive impact on the person’s happiness, health, and longevity.
6. The care homes sector is worth around £15.9 billion a year in the UK, with around 410,000 residents. We calculate that there are around 5,500 different providers in the UK operating 11,300 care homes for the elderly.4 Around 95% of their beds are provided by the independent sector (both for-profit and charitable providers). LAs generally commission care services from independent care providers. We estimate that the average cost for a self-funder in 2016 was £846 per week (nearly £44,000 per year), while LAs on average paid £621 per week.
7. LAs are directly responsible for care provision in their areas. LAs have a legal duty to meet people’s ‘eligible needs’ subject to their financial circumstances. People with assets of more than £23,250 in England and Northern Ireland, £26,500 in Scotland, and £30,000 in Wales pay the full cost of their care, be it care homes, domiciliary care, or other types of care.5 41% of residents in care homes fund themselves (self-funders) and 49% receive LA-funding (around a quarter of these pay top-ups). Even for those receiving LA-funding, nearly all income, such as pensions, is offset against state contributions. The NHS also commissions nursing care services for people who have a primary health problem, around 10% of residents.
8. As the population continues to age, demand for care will increase and the types of care needed will change. The Office for National Statistics predicts a 36% growth in persons aged 85+ between 2015 and 2025, from 1.5 million to 2 million. This is expected to lead to a substantial increase in demand for care home services.
9. Adult social care in the UK is a devolved matter (although there are considerable similarities in the state systems in the four nations). Consequently, some of our recommendations only apply in certain nations.
Support and protections for those requiring care
10. In the main, the CMA’s consumer research found that residents had received good care. The sector performs a vital public service that benefits many people, and is staffed by many dedicated and caring individuals.
11. Ideally, for the care home market to meet people’s needs as well as it should, those entering care must be able to make an informed choice, and those within care must be sufficiently empowered to identify and address shortcomings in the service they receive.
12. However, the challenges faced by those entering and receiving care should not be underestimated; there are many inherent barriers to people making well-informed choices in this sector.
13. Choosing a care home is often an extremely difficult decision for people to make at a point in their lives when they are particularly vulnerable. Our consumer research found that there is often very little prior consideration of care needs and options by prospective residents, their representatives and their families. People don’t want to contemplate growing old in poor health and this can be a very difficult and emotive subject to discuss within families. Frequently, decisions on care are faced for the first time following a sudden illness, injury or loss of a carer, meaning they are often made with urgency under extremely distressing circumstances.
14. It is only at that point that many people begin to try to understand a very complex system. They need to assess their eligibility for funding, and try to find suitable, affordable care homes that have vacancies. Understandably, many people are overwhelmed by this process. The information and guidance they receive can be confusing and providers often do not clearly provide all the important information people need to make an informed choice.
15. Once in care, it is very difficult for residents to correct a poor choice, as once settled in a care home they find moving to a different home extremely stressful. The process of moving can severely impact on the residents’ health.
16. Because of this, it is particularly important that people in care, their representatives and their families feel empowered to raise any concerns that they might have. However, we have found that many residents and their representatives find it difficult to make complaints and seek redress, partly due to complaints systems being perceived as confusing and poorly sign-posted. People were also worried that if they complain, there could be reprisals against the resident receiving care, or their friends and relatives could be stopped from visiting them.
17. As residents face barriers, both to moving care home and to complaining and obtaining redress, the consequence is that residents are more vulnerable to unfair practices. Therefore, the consumer protections they receive need to reflect this.
18. We are making a set of recommendations in relation to these issues as well as taking direct action where we have the powers to do so. These include measures to improve decision making for those requiring care, but also measures to strengthen protections for consumers and to enhance complaints and redress processes.
19. The protections of consumer law against potential exploitation and adverse outcomes are especially important in this market given the vulnerability of people, the harm that may arise from residents being treated unfairly, and the importance of social care as a service. Our study has found some significant shortcomings in this regard, with some care homes not treating residents fairly. Compliance with the law is essential, especially in this market, where such vulnerable people are involved.
20. The processes for making complaints must be designed to recognise the barriers that can stop people from being forthcoming with their views. Measures are required both to widen and systematise the best practice witnessed in many care homes, and to provide better access to external independent redress mechanisms when these are required.
21. In determining our recommendations, we have been very conscious of the challenges faced by those choosing and within a care home. We are grateful for the considerable constructive input that we have had from stakeholder organisations and those with first-hand experience of being in these situations. We also commissioned the Behavioural Insights Team and Research Works to undertake consumer research, assess what is currently working and can be built upon, and explore potential new ways of addressing these challenges.
22. Our recommendations to improve consumer choice and protection can be grouped into three broad areas:
(a) helping people to make good decisions about their care options;
(b) protecting residents and their consumer rights; and
(c) making the complaints system work well for care home residents, their representatives and families.