Fees paid by cash-strapped councils fail to meet costs of caring for residents, according to Competition and Markets Authority. The UK’s care homes are grappling with an unsustainable £1bn-a-year funding gap caused by councils not paying enough money, resulting in many homes charging residents over the odds in order to stay afloat, an official review has found. The Competition and Markets Authority (CMA) has also revealed it is taking enforcement action against a number of care homes that have been unfairly demanding large upfront fees, or charging families for weeks after the death of an elderly relative. In its report into the £16bn care homes sector, which covers 410,000 residents and stretches across 11,300 homes, the CMA said “urgent action” was needed because the current regime was “not sustainable” without additional funding. It suggested that people who paid for their own care were being asked to pay more than they should in order to subsidise council-funded residents. “On average, a self-funding resident is paying over £12,000 a year more than a local authority to have a place in the same care home. This difference between self-funded and local authority prices for the same service is understandably perceived by many as unfair.” The government has said it will publish a green paper on care and support for older people by summer 2018. In the meantime, however, the issue was that councils were paying fees that were “below the costs care homes incur”, said the CMA.