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Although we are still working our way through the detail, the NAFD welcomes the changes in the Competition and Markets Authority’s Final Report, which reflect much of the evidence presented by the NAFD on the sector’s proactive approach to tackling the challenges faced, including the work of the Funeral Service Consumer Standards Review. Publication of the report also provides clarity on a process that has left funeral directors facing huge uncertainty about their future, during an extremely challenging year in which they have been key workers on the frontline of the response to COVID-19.

Consumer feedback, in surveys undertaken by the CMA and others, confirms that the majority of bereaved people are satisfied with the service and costs of funerals they have arranged and this is therefore not a market where onerous statutory intervention is required. Importantly, the CMA shares our view that for funeral consumers, quality of service is as important as the cost of a funeral – and that both do (and should) influence the choice of funeral director,

In addition, the funerals market has been fundamentally changed by COVID. Consumers are buying simpler funerals (and it is not yet clear when the Government restrictions will be lifted) and the number of excess deaths in 2020 will lead to several years of a lower number of deaths in the coming years. Having presented evidence to the CMA, it is encouraging to see that this has been understood.

The NAFD shares the CMA’s view that the funeral sector could be more transparent in the way it communicates cost and services information – and changes also need to be made to the monitoring of how deceased people are cared for.

We support the principles of the CMA’s proposed ‘sunlight remedies’ to require funeral firms to provide more information in standard formats and will support our members in complying with the new requirements. Indeed the sector has already been taking steps to address this – and the NAFD has been leading this work.

We have already:

• toughened up the NAFD’s code of practice;
• introduced new professional qualifications;
• brought independent expertise in to review our inspections; and
• invested in an online platform to ensure funeral homes can communicate consistent, comparable pricing and service information.

In 2021, we will launch the Independent Funeral Standards Organisation (IFSO) – an independent regulatory body which we are confident will provide a robust mechanism to monitor quality standards among funeral firms that will satisfy the CMA’s recommendations.

The NAFD welcomes the introduction of a registration process for all funeral directors. However, the impact of the requirements of registration for a small independent funeral director will be vastly different to that of the largest businesses in the sector and therefore the requirements must be proportionate. We are also pleased see the importance of professional development pegged to the future registration regime. This will ensure that funeral firms are incentivised to invest in the skills and capabilities of their staff.

However, the NAFD is concerned that the CMA’s proposed ongoing monitoring of the financial performance of funeral firms with more than five branches will have a quantifiable impact, with the greatest potential impact on smaller firms. We do not believe that the CMA has properly assessed the implementation costs on the sector, particularly on smaller businesses, to evaluate both the proportionality and what benefits this continued and ongoing monitoring would bring. We will be asking the Ministry of Justice to examine these implications in more detail.

Equally, despite presenting independent evidence to the CMA that the ‘average’ £400 consumer detriment figure, first outlined in the Provisional Decision Report, was arrived at incorrectly by making unjustified assumptions, such as using data from the few big players in the market and applying this to the smaller companies in the market, the CMA has not reassessed this figure – making it unsafe for the Ministry of Justice to rely on when assessing whether consumers have paid too much for funeral. It is, however, extremely pleasing to see that the CMA does not attribute blame to funeral directors and indicates that there are structural concerns about the market, rather than evidence of any exploitative behaviour by funeral firms.

We are also disappointed that the CMA continues to hold the view, after investigating the market for three years already, that a further market investigation would be a sensible way forward as, together with the proposed financial monitoring, this raises the prospect of the funeral sector, which is dominated by small, independent and family owned businesses, being under the CMA’s constant scrutiny for many years, potentially exceeding the CMA’s powers.

There is much important detail still to be worked out in the CMA’s report. The NAFD has welcomed the engagement with the CMA that it has had throughout the market investigation and is pleased that the CMA notes the important role we have to play going forward. We look forward to the next steps as this report is scrutinised by the Government.