It is calling for changes to be brought in to stop "major anomalies" which are putting old people at risk.
The review of long-term care published yesterday by the Better Regulation Task Force says the system is "confusing" and consumers have little confidence in it.
The task force recommends that a independent inspectorate should be set up to enforce minimum standards of care in nursing and residential homes.
The chairman of the working group, Dr Chai Patel, said: "At the heart of all regulation has to be the need to provide protection for vulnerable people through guaranteed standards."
The force wants the responsibilities to be taken out of the hands of local authorities where there could be conflict of interest when such authorities act as providers, purchasers and inspectors of care.
The Department of Health is expected to respond to the review by August.Reuse content