Hunt calls for Competition and Markets Authority to investigate care home sector

The former Conservative Health Secretary, Jeremy Hunt MP, has today called for the Competition and Markets Authority to launch an investigation into the care homes sector.

Speaking on the BBC Radio 4 ‘Today’ programme this morning, Jeremy Hunt said, “We have a system at the moment where the owners of the biggest care home chains are following a business model that is just not appropriate for organizations that are looking after some of our most vulnerable people”.

His criticisms were directed in particular at private equity firms which are accused of loading up the sector with debt and using care homes as part of their wider property investment strategies.  They come after one care home Four, Seasons went into administration, with debt said to have been equivalent to £29,000 for each of their care home beds. Other operators have also come under fire for declaring dividends at the same time as requesting more Covid funding from local authorities.

Commenting on the role of private equity in the sector, Jeremy Hunt, who is now the Chair of the Commons Health Select Committee, said, “I am not against private equity being involved in the sector, I just don’t think it is operating in the interests of the people who depend on that sector.”

“You look at other sectors, like the pharmaceutical sector, and the profit motive is a spur for innovation which develops very important things like vaccines.  And when it works well, even private equity can make businesses more efficient, and that can lead to more innovation, better products and services for consumers, but it is not happening here”

“And that is why I think we need the Competition and Markets Authority to look into this market and ask how we can make sure this private sector investment, that we need, works in the interest of the residents and the people who depend on it”.

Suggesting that there should be a maximum level of debt permitted within the care sector, Jeremy Hunt said, “When you have businesses with very vulnerable people, depending on them functioning, then they must be some levels of debt that are dangerous and we shouldn’t let them happen”.

Commenting on Twitter this morning, the Labour MP Barry Sheerman suggested that the Competitions and Markets Authority might not be sufficiently robust enough to tackle issues in the sector.