CMA Report Calls For Solution to £1bn Shortfall

The CMA has identified that the care homes sector across the UK is under-funded to the tune of £1 billion per annum and calls for oversight of local authorities.

The publication of the Competition & Markets Authority (CMA) Care Homes Market Study report may be something of a watershed for the care sector. The CMA have stated in clear and simple terms the fundamental issues affecting the sector in such a way as to leave government, at local and national level, with nowhere left to hide.

The CMA has found that “the average fees paid by LAs (Local Authorities) are below the full costs involved in serving…residents”, and that “the fees currently being paid by LAs are not sufficient to sustain the current levels of care under the current funding model.” The CMA concludes that “if LAs were to pay the full cost of care for all residents they fund, the additional cost to them of these higher fees would be £0.9 to £1.1 billion a year.”

To those close to the sector, none of this will come as a particular surprise, as the squeeze on funding and increase in costs has been plain to see for years. The CMA report, however, puts funding front and centre of the debate. For many years, the narrative has been to criticise care operators, portraying them as somehow being “fat cats” bleeding the system dry. It is true, as with any sector, that there are operators whose practices are far from perfect. For a country whose social care model is predicated on independent provision however, it is astonishing to learn that this is currently under-resourced by around £1 billion per annum and that this could rise to as much as £2 billion as soon as 2025.

The CMA concludes that “public funding needs to increase if the current model of funding is to continue, or alternatively, if current levels of funding do not increase, the funding model for care will need to be changed.” The body recommends not only enhanced planning at local level, but also oversight of local authorities commissioning practices, to ensure appropriate plans are not only drawn up, but also delivered. It also supports additional investment in the sector through increased transparency and assurance of funding levels.

The CMA findings should be cautiously welcomed. Social care funding in the UK has increasingly had to rely on privately funded residents to prop up a creaking system, a practice which is iniquitous and unsustainable. One has to hope that now the problem has been clearly identified, the solution will not be long in following.

Ian Wilkie

December 2017