CMA care home refund is just more papering over cracks opened by funding crisis

Today is a good day for at least some of the residents of care homes run by Sunrise Senior Living: They are collectively £2m better off.

The company has decided to hand them back money they had been charged in the wake of an ongoing investigation into industry practices by the Competition & Markets Authority. So there is some life in that watchdog after all.

The probe found that Sunrise’s description of its upfront fee - running into several thousands of pounds per person - and how it would be used was “unclear”.

Prospective residents were having to pay up before they had actually secured places and the fee was non refundable after just 30 days residence.

With the CMA having raised concerns about these issues, the company has agreed to pay out an average of £3,000 to all those who shelled out from October 1 2015 onwards, including those who subsequently left its homes or died (in which case their families will get the money).

No further such charges will be levied.

Previously the watchdog’s work had led to another provider dropping a contract term requiring the payment of a month’s fees following the death of a resident. More such cases are expected.

Good. Preventing care home residents and their families from being gouged is exactly what a watchdog like the CMA should be doing.

But how much of the problem is down to the sector’s wider funding crisis?

This has led to is a dysfunctional market from which an increasing number of providers - including some good ones - are departing.

David Behan, the chief executive of the Care Quality Commission, highlighted the issue of their handing back contracts to local authorities through not being paid enough back in 2016, in the wake of the collapse of Southern Cross. Most often this involves smaller operators which lack economies of scale.

With the number of providers increasingly limited, bad practices aren’t being corrected through business being steered to good ones, a point made to me by the charity Independent Age. This is a problem affecting things that go way beyond charging.

It is fortuitous that the CMA released its findings on the same day that the House of Commons Public Accounts Committee (PAC) published a report calling for “urgent action” to address the under funded adult social care sector.

The report describes it as being in “a precarious state” with underpaid staff suffering from low esteem and a poor public image. Brexit is set to exacerbate the situation: many of them are from the continent.

It further worries that a forthcoming Department of Health & Social Care green paper will be seen as a “cure all” and risks under estimating the scale of the problem.

If so the constant drip feed of negative news about the care sector will continue unabated. The CMA has provided a rare positive with the refund it has secured. But its work is effectively about papering over cracks that are growing wider by the day.