Middle classes fleeced to fill £1bn care funding gap ÷Families are made to pay £5k up front...

...and 40% more than council residents

Middle class care home residents are being forced to pay huge up-front charges and overthe-top fees to keep the ailing sector afloat, a major investigation found yesterday.

Those who self-fund are being exploited by care homes because councils have slashed what they are prepared to pay for residents who get their places funded by the state.

A report by the Competition and Markets Authority (CMA) found that some care homes are charging up-front fees of £5,000 before elderly or vulnerable residents can move in.

Once they get a place, self-funders are then having to pay 40 per cent more on average than the local councils do – a typical premium of £12,000 a year on their annual fee. in some cases, care homes are even making families pay for weeks after their loved ones have died.

The CMA said there was a £1 billion-ayear funding gap in the care home sector, and much of the shortfall was being plugged by self-funders.

despite this, yesterday’s report found that dozens of care homes are still at risk of going bust, which would leave hundreds of elderly people without anywhere to live.

last night one charity accused care homes of being ‘unfair and exploitative’. The study by the CMA markets watchdog found:

Up to 12,000 additional care home beds need to be created each year to keep pace with the ageing population;

A number of care homes could be taken to court for charging families for up to four weeks after their loved one’s death;

Others are being challenged after charging families up to £5,000 simply to get a place in a home;

Families and friends are being unfairly banned from visiting their relatives;

An inadequate complaints system prevents residents and their families from raising concerns.

Some 49 per cent of care home residents have their bed paid for by their council, with 41 per cent paying their own fees and 10 per cent paid for by the NHS.

local authorities are able to get away with paying less because they buy care home places in bulk and get a discount.

CMA chief executive Andrea Coscelli said: ‘Care homes provide a vital service to some of the most vulnerable people in society.

‘However, the simple truth is that the system cannot continue to provide the essential care people need with the current level of funding. Without substantial reform... 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.’ Under england’s creaking care system, people who go into a care home have to use their assets to pay the full costs of their care until they are reduced to their last £23,250. The cost of their care is taken off the value of their home after they die – denying thousands of children their inheritance.

Two years ago david Cameron pledged to implement a cap of £75,000 on sky-high care costs, but this promise has now been shelved until after 2020.

The CMA inquiry found that the fees of self-funders were about £44,000 a year – way above the £32,000 paid by local authorities.

its report said: ‘Our assessment is that if local authorities were to pay the full cost of care for all residents they fund, the additional cost to them of these higher fees would be £900 million to £1.1 billion a year.’

The CMA said while the sector was just about managing to cover its day-to- day costs, it did not have the money to invest for the future. The year-long review also highlighted an inadequate complaints system, making it difficult for families to raise concerns, and families and friends being unfairly banned from visiting.

‘There is too great a risk of residents being treated unfairly, and in breach of their rights under consumer law,’ the report said. ‘examples of the CMA’s concerns include where homes are not being clear enough up front about their prices or terms and conditions, do not protect residents’ deposits effectively against the risk of insolvency, are not fair when asking a resident to leave or when they ban visitors.’

The CMA said it would be taking enforcement action and raising concerns with a number of care homes to ensure they comply with consumer protection law.

Caroline Abrahams, of Age UK, said: ‘This devastating report means we now have it on the highest authority that the care home market, a sector that many hundreds of thousands of older people depend on, is broken and living on borrowed time.

‘The report also substantiates what Age UK has been hearing from concerned members of the public: namely that the business practices of some, but not all, care home operators are unfair and exploitative of older people and their families at an incredibly vulnerable time of their lives.’

liberal democrat health spokesman Judith Jolly said: ‘The Government’s failure to tackle the £1 billion hole in the care homes budget is leaving families to pick up the tab. An ageing population and lack of funding is creating a ticking time bomb.’ Gillian Guy, of Citizens Advice, said: ‘it is good that the CMA has recognised that better protections are needed for older people and their families making decisions about their care – an issue we raised early last year.

‘While the wider challenge around adequate funding for care clearly needs to be addressed to tackle problems in care provision, it is also crucial that work is done to improve people’s experiences of care.’

The department of Health said: ‘We know the social care sector is under pressure due to our growing ageing population – that’s why we’ve given £2 billion additional funding over the next three years and next summer we will publish plans to reform social care to ensure it is sustainable for the future.’