The Ombudsman's final decision:
Summary: Ms X says Mrs Y’s care provider increased her weekly fee by £150 despite her care needs not changing. We have found evidence of fault in how the care provider raised Mrs Y’s care fees and have recommended a remedy for the injustice caused to her and any other affected residents. The care provider agreed to our recommendations.
- Ms X, who is complaining on behalf of Mrs Y, says the care provider increased Mrs Y’s care fees from £750 to £900 when her needs have not changed.
The Ombudsman’s role and powers
- We investigate complaints about adult social care providers and decide whether their actions have caused injustice, or could have caused injustice, to the person making the complaint. I have used the term fault to describe such actions. (Local Government Act 1974, sections 34B and 34C)
- We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
- If an adult social care provider’s actions have caused an injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))
How I considered this complaint
- I discussed the complaint with Ms X and considered information she provided. I made enquiries of the care provider and considered its response and documents it provided. I had regard to relevant guidance and legislation. I set out my initial thoughts on the complaint in a draft decision statement and invited Ms X and the care provider to comment.
What I found
Relevant guidance and legislation
Competition and Markets Authority (CMA)-UK Care Home Providers for Older People Advice on Consumer Law Guidance, Section 4.41
- This guidance says care providers cannot increase fees arbitrarily. To ensure compliance with consumer law, variation terms must set out clearly the circumstances in which a resident’s fees may change and the method of calculating the change. This should enable residents and their representatives to foresee - on the basis of clear, objective and intelligible criteria - the changes that may be made and evaluate the practical implications for them before entering into a contract. General fee reviews should be limited to once a year.
The National Minimum Wage (Amendment) Regulations 2019
- These regulations came into force on 1 April 2019 and increased the national minimum wage for workers over the age of 25 from £7.83 to £8.21 per hour.
The National Minimum Wage (Amendment) Regulations 2020
- These regulations came into force on 1 April 2020 and increased the national minimum wage for workers over the age of 25 to £8.72 per hour.
- Mrs Y approached the care provider regarding a placement in 2018. An assessment of her needs was completed. The assessment found that she met the criteria for low needs in respect of personal care, nutrition, continence, social needs and maintaining a safe environment. She had medium needs in respect of mobility and medication. As most of Mrs Y’s needs were in the low category it was decided the fee for her care would be £750 a week.
- A placement was agreed and a contract signed. In respect of changes to the fees charged for the placement the contract said:
“Fees are generally reviewed annually. However, if the Resident requires additional care and/or significant cost increases are incurred as a result of changing legislation, the Home reserves the right to review fees on an interim basis. The Home will give not less than 2 weeks’ notice of any increase in fees.”
- Mrs Y placement commenced in August 2018 and she was charged £750 a week.
- In April 2019 new legislation came into force raising the amount of national living wage.
- In May 2019 the care provider contacted Mrs Y and Ms X to advise the weekly fee for Mrs Y’s care was increasing to £850 from 1 July. No rationale for the increase was provided.
- A review of Mrs Y’s care needs found she had some low and some medium needs in respect of personal care and nutrition. However, the decision was made to continue to charge her at the rate applicable to residents with needs in the low category.
- Ms X raised concerns that the fee increase was above the rate of inflation and there had been no significant increase in Mrs Y’s care needs.
- The care provider offered to arrange a meeting to discuss the fees in July but Ms X declined the offer preferring to seek our assistance in resolving the matter.
- A review of Mrs Y’s care needs conducted in 2020 shows that she continued to have some low and medium needs regarding personal care but now had medium needs regarding nutrition. She remained on the rate applicable to residents with needs in the low category because her needs had only increased in respect of nutrition.
- In March 2020 the care provider advised Ms X that Mrs Y’s weekly care fee would increase from £850 to £900 from the 1 April. It explained this was due to an increase in the national living wage from that date.
- Mrs Y died in April.
- I asked the care provider why it had increased Mrs Y’s care fees. It responded this was because of changes in the national living wage and increases in Mrs Y’s care needs.
- The contract provided to Mrs Y does not comply with the CMA guidance. It does not define ‘significant costs’ or explain how these will translate into fee increases. Further, there is no explanation of how changes in care levels affect the level of fee charged. This lack of clarity means residents cannot anticipate how fees might change and leaves them open to unreasonable fee increases. For this reason I do not consider the terms meet the CMA guidance. This is fault.
- The care provider says Mrs Y’s fees increased because her care needs increased. I agree assessments of her needs in 2019 and 2020 recognised she needed additional help with personal care and nutrition. But both reviews determined most of her care needs remained in the low category and so her fees would remain at the same level. I therefore do not see that Mrs Y’s increased needs justified the increase in her fees. It would therefore appear the increase resulted only from changes to the national living wage.
- In 2019 the national living wage increased by 4.9% and Mrs Y’s weekly fee increased by 13.3%. In 2020, the national living wage increased by 6.2% and Mrs Y’s weekly fee increased by 5.9%. Over the two year period there was an increase of 11.6% in the national living wage and a rise of 20.0% in the weekly fee. This suggests the fee increases were not simply a result of changes in the national living wage.
- In the absence of any information on how cost increases will translate into higher fees, I consider the care provider has applied the fee increase in an arbitrary manner.
- The CMA guidance also says that care providers should give residents 28 days’ notice of any changes to the terms of their contract including fee increases. Mrs Y’s contract refers to 2 weeks’ notice. The care provider’s response to my enquiries acknowledged its contract did not comply with this part of the guidance and it has undertaken to amend its contracts accordingly.
- The care provider agreed to alter its contract in line with the CMA guidance. In particular, it will ensure the contract provides greater clarity on how fee increases will be calculated so residents can see how their fees may increase.
- It will also amend its contract so residents are given 28 days’ notice of any changes to the contract and fee increases.
- As a result of the fault I have found Mrs Y and Ms X were caused uncertainty about how Mrs Y’s fees were increased. This necessitated Ms X’s complaint to us. In recognition of this, I recommended the care provider refund Mrs Y’s estate £50 per week for the period 1 July 2019 to 1 April 2020. The care provider agreed.
- The care provider will also review the charges levied to other residents with a view to reducing them by the same amount for the same period.
- The care provider should carry out the agreed actions within six weeks of the date of my decision.
- I have ended my investigation of this complaint as the care provider agreed to my recommendations.
Investigator’s final decision on behalf of the Ombudsman
Investigator's decision on behalf of the Ombudsman