Cross-subsidy – the unfairest practice


Posted on December 5th, by geoff in Caring Times, CT blog. Comments Off on Cross-subsidy – the unfairest practice

By Caring Times editor Geoff Hodgson

Last week the Competition and Markets Authority (CMA) launched a market study into care homes for elderly people. It is going to look into reports of potentially unfair practices and contract terms being used by some care homes and evaluate the effectiveness of competition between care homes in driving quality and value for money for residents and taxpayers. It will also consider how local authorities and other public bodies purchase and assign care home places, and how they encourage and shape local supply.

This is an opportunity for providers to acknowledge, and then step back from, the unfair practise of charging self-funding residents over the odds to subsidise the inadequate fees paid by local authorities for publicly funded residents.

Not only do self-funders pay for their own care, but have throughout their working lives, through their taxes, helped to pay for the provision of care for those who cannot afford to pay for it themselves. This, I think, is as it should be. But it’s a bit rich to then ask them to pay a third time to cover the deficit created by governments which have effectively repudiated their social care responsibilities.

It is beyond my understanding that government can spend billions of our money on high-speed trains, fibreoptic broadband networks and redundant nuclear deterrents while effectively ignoring the needs of vulnerable older people in the last years and months of their lives.

I hope the CMA makes a big noise about the unfairness of cross-subsidies, and I hope providers and their representative organisations draw the CMA’s attention to the issue.

The CMA has invited views on any of the issues raised in the Statement of Scope – www.gov.uk/cma-cases/care-homes-market-study – by 5pm on Monday, 16th January 2017

  • The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.




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