NEWS RELEASE FROM THE
REGISTERED NURSING HOME ASSOCIATION
Issued 2nd January 2004
ONE LAW FOR THE PUBLIC SECTOR AND ONE LAW FOR THE PRIVATE SECTOR
IN CARE DELIVERY: RNHA ATTACKS DECISION BY OFFICE OF FAIR TRADING
‘You must be joking’ is the Registered Nursing Home Association’s response to a finding by the Office of Fair Trading that it is not a breach of the Competition Act for a public body to pay lower fees to an independent provider for elderly residential care than it spends on providing the same type of care in its own homes.
The RNHA said it could accept neither the logic nor the justice of the OFT’s decision, which overrides a previous decision by a Competition Commission Appeal Tribunal that the practice was discriminatory under the Act.
Challenging the OFT’s reasoning, the RNHA claimed it was plainly ridiculous to argue that public bodies which themselves operate care homes were not economic ‘undertakings’ in law. The association believes that public sector care providers are just as much engaged in economic activity as private care providers.
In a statement issued today (2nd January), the RNHA argues that the OFT judgement appeared to hinge on an interpretation of finer points of law rather than the general principles embedded in the Competition Act.
The association points out that local authorities are the single largest purchasers of residential and nursing home care in their respective areas. Collectively, they purchase between 60% and 70% of all care in care homes and are in a very powerful position to dictate the price.
The case in dispute originates from a complaint by the BetterCare Group that the North and West Belfast Health and Social Services Trust was unfairly paying a lower rate for the care provided to publicly funded residents in BetterCare homes than it was costing to provide the care in the Trust’s facilities.
Commented RNHA chief executive officer Frank Ursell: “If a public body which runs homes is not engaging in economic activity, then what exactly does the OFT think is going on? Providing care to older people costs money, whether you happen to be a private operator or a public organisation.”
He added: “Clearly, the OFT must think that public bodies don’t have to draw up budgets when they run their own services, don’t use money to pay staff or purchase supplies, and don’t have to worry at all about the balance sheet. I think everyone with an ounce of common sense would describe the OFT’s logic as ‘daft’.”
Independent organisations such as Help the Aged and the King’s Fund have repeatedly identified that local authorities pay care homes much less than the true cost of care, thus forcing the owners to make up the shortfall by increasing the fees of those who pay for their own care.
This has led to the Consumers Association lodging a so-called ‘super complaint’ with the OFT in order to prevent the need for cross-subsidies between different groups of people receiving care.
On the issue of discrimination and fairness, Mr Ursell questioned the OFT’s interpretation of the Competition Act. “How can it be fair,” he asked, “for an organisation to expect others to deliver a service for significantly less than it costs that organisation to do the same thing?”
He concluded: “This decision comes as a bitter blow to care homes throughout the UK. It sends a signal to them all that, in the eyes of the OFT, there is one law for the public sector and one law for the private sector. In the eyes of many independent commentators, local authorities are abusing their dominant position in the care market. The OFT exists to prevent such abuse. One is forced to ask why it is reluctant to act in this case.”
END
For further information and comment please contact:
Frank Ursell, Chief Executive Officer, RNHA
Tel: 0121-454 0924 during office hours on Friday, 2nd January
or 07785 227000 out of office hours
or 0121-454 2511 during office hours from Monday, 5th January
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