CMA: Care home system cannot “continue to provide essential care” with current levels of funding

The Competition and Markets Authority (CMA) has warned that more care home closures are expected if Britain fails to bridge the gap between funding and spending.

The competition watchdog called for “reform of the care home sector so people get the support they need in their old age”.

Following an extensive review, the CMA published its findings of whether the current system is working well for the people who pay for them.

Notably, it found that continued “essential care” is not sustainable without additional funding. Its analysis identified a funding shortfall of around £1 billion a year across the UK, largely because councils are paying fee rates for the residents they fund which are below the costs care homes incur.

The CMA says this had led to care homes “propping up their finances by charging higher prices to those who pay for their own care” – known as self-funders.

Previous research has suggested that self-funders’ fees are around 40 per cent higher than those paid by local authorities.

The CMA also highlighted:

  • Care homes are facing challenges to cope with future needs, as the sector must grow “substantially” as the population ages.
  • Basic information and support is “often not available” to help families “navigate the system and make informed choices”.

CMA Chief Executive, Andrea Coscelli, said: “Care homes provide a vital service to some of the most vulnerable people in our society. However, the simple truth is that the system cannot continue to provide the essential care people need with the current levels of funding.

“Without substantial reform to the way that councils plan and commission care, and greater confidence that the costs of providing care will be covered, the UK also won’t be able to meet the growing needs of its ageing population.

“It is essential that residents and their families can make informed choices, understand how these services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have concerns. We are now calling on care homes, councils and government bodies to help people navigate what can be a confusing system.”