It is unsurprising that the Consumers' Association has made a complaint to the Office of Fair Tradin...
It is unsurprising that the Consumers' Association has made a complaint to the Office of Fair Trading (OFT) over pricing issues in the care home sector. Advisers working in the long term care (LTC) market are all too familiar with the failings of the current system.
The OFT plans to assess how transparent fees are. Although there is undoubtedly a need to make information on fees easier to understand, this is not the core failing of the system.
What LTC advisers and campaigning groups such as Age Concern would like to see changed is the way care home prices are set by different local authorities (LAs).
Residents are finding it increasingly difficult to find a vacancy that will accept them at the price the LA is prepared to pay.
There may be high price tags on care home places, but the service they provide is expensive. Most homes have thin or non-existent profit margins, which is why we hear about so many homes closing down.
Therefore some of the most vulnerable people in our society are forced to move away from family and friends or pay out hefty top-up fees.
The inadequacies of LA funding top the reasons why LTC insurance was launched in the first place. However, with poor sales and more providers dropping out of the market, the future of pre-funded products lies on shaky ground. This only reinforces how serious funding issues will continue to be unless something changes.
The OFT should be looking at how LAs calculate funding in the first place. Surely it would be easier to tackle the other inefficiencies once the core problem is resolved.
Kirstie Redford, editor
