Ridout Report – Care home fee increases in the context of the Citizens Advice Report, Hidden charges in care homes

Topics covered: Ridouts professional advice

The Citizen’s Advice Bureau (CAB) report as cited by the Times on 08 February 2016 – Hidden charges in care homes – is simplistic and could be much more helpful for residents and potential residents. It should be noted carefully that this will apply only to independently funded care i.e. full self-funders and those paying top-ups.

The Unfair Contracts Terms Act 1977 provides exactly for this situation- the contract being a consumer contract. The Office of Fair Trading Report in 2003 covered the CAB points:

·         There should be a trial period of occupancy.

·         Fees should not be increased without reasonable notice (suggested to be a minimum of 4 weeks). In fact, the CAB study found that 56% of the care homes they contacted on a mystery shopper basis offer 4 weeks’ notice of an increase, whilst 18% offer a year’s notice. Only a comparatively small minority (8%) offer only a week’s notice.

·         There should always be an effective right of termination to avoid the increase

Ridouts advises care providers. Our advice to such providers would be that to seek to impose increases on very short notice is likely to be ineffective if challenged with the increase being irrecoverable. Less haste is more speed. It is unlikely that any satisfied residents would actually move.

That said, the correct inflation test is that of the costs to the care home and not a wider index. Comparability is required. The actual average increases are 1.9% for a residential care home and 4.8% for a nursing home, figures which may not seem that high when compared with real care wage inflation as we start to adjust for “living wage.”

Care homes have never insured personal contents (which vary enormously) beyond a standard and very limited cover, usually £500 per claim. If residents have significant valuables, they will wish to insure themselves (e.g jewellery such as engagement rings). A care home could never realistically provide comprehensive cover for whatever the resident may own.

Average weekly charges of £769.23 for a nursing home and £569.00 for a residential care home still seem relatively modest for 168 hours of care per week from a multidisciplinary team, including accommodation and food. That is £4.58 per hour for a nursing home and £ 3.38 per hour for a residential care home.

It should also be remembered that residential care has traditionally lagged behind in higher inflation days. If we want better care, this means paying carers better and that increase must be borne in part by residents so as to preserve margins and provider ability to invest.

Quite rightly, the wider public, as represented by the CQC, expect consistent and high quality care services in pleasant and effective surroundings. To achieve that, good care services must pay staff properly and make sufficient return to permit investment in replacement and improvement. Constantly complaining about transparently reasonable care fees whilst demanding ever improving standards is a paradox which cannot be sustained.

There needs to be a refreshed focus on value for money in a vital service and a stop to constant complaint about care costs.

In the vast majority of care services, as shown by the CQC’s own statistics, providers are delivering spectacular value at very low cost. This is for celebration not constant challenge and recrimination.

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