Agenda item

Report of the Portfolio Holder for Adult Care and Local Transport 

Steve Oakley, Acting Director of Commissioning and Procurement, presented the report presenting proposals for a new pricing model for fee rates for non-standard or specialist adult residential and nursing care services. The proposed model follows a review of the arrangements for setting fee rates for packages in which the level of care needed is above what is included in the fees paid for a standard package of care. The model and rates proposed are based on consideration of the actual costs of providing services and potential sustainable funding models, and have been subject to consultation with service providers. It is proposed to implement the new model from 1st December 2020 following completion of an appeals process in relation to the banding of individual homes.

Resolved to

(1)  approve proposals for a pricing model for non-standard/specialist adult residential and nursing care services, which have been subject to consultation with service providers;

(2)  delegate authority to the Head of Contracting and Procurement to agree the appropriate banding (and associated fee level) for each residential and nursing care service in accordance with the model proposed. The banding of individual services (for both existing and new placements) will be subject to an appeals process should providers wish to challenge the banding decision for their service;

(3)  approve the implementation of the new model for new placements from 1^st December 2020, with a view to implementing for all existing packages on 1^st December 2020 subject to the outcome of the appeals process;

(4)  delegate authority to the Director of Commissioning and Procurement in consultation with the Director of Adults Services to determine the outcome of the appeals process and confirm the timing of implementation of the new funding model for existing packages, following the appeals process;

(5)  note that approval to spend against individual placements in specialist provision is through the Council’s scheme of delegation for Adults Care Packages.

Reasons for recommendations:

·  Nottingham City Council (the Council) has a legal duty under the Care Act 2014 to consider fee rates payable for social care contracted services and in doing so, must consider the costs of delivering care and the sustainability of the market. These considerations are balanced against budget commitments and pressures for the City Council.

·  The Council is looking to implement a new funding model for nonstandard/ specialist residential and nursing care placements in which the level of care needed is above that of a standard package (as defined in the ‘core’ elements’ of a standard residential service). The aim is to take a more consistent and streamlined approach to the fees paid for specialist care and support. The development of a more consistent pricing mechanism supports transparency and fairness across providers.

·  Currently citizens are placed in non-standard/specialist residential and nursing care homes on a variety of differing rates, often for the same level of support. Under the proposed model, citizens with similar support needs will be paid the same rate regardless of where they are placed. Additionally there is often a high number of one to one hours required to support the citizen’s daily living. The proposed model aims to reduce reliance on one to one support to ‘top up’ fee rates when adequate staffing should be available to support the needs of citizens within the home.

·  It is considered that a balanced, reasoned and informed approach has been adopted in developing these proposals, which seek to support a sustainable, efficient and effective market within the available resources. The key factors taken into consideration are:

o  Costs of service delivery

o  Market considerations, including implications of the ‘Better Lives, Better Outcomes’ strategic vision for residential and nursing care

o  Outcomes of consultation with providers

o  Affordability

·  The proposed pricing model is based on a formula developed by Valuing Care Financial Management Ltd, who carried out a pricing review in 2018/19. The outcome of this review has been supplemented with information collected from providers to produce a model that is considered to align with and reflect the actual costs of service delivery in this market.

·  In recognition that the size of the home impacts on the costs of delivering services, the pricing model recognises the size of homes and comprises three size categories: 5 beds or less; between 6 and 11 beds; and 12 beds and above.

·  Market related factors considered include: size of the market; any evidence of market failure or collapse; whether providers are managing to deliver under the current fee rates and whether the fees proposed are equitable and support an efficient, effective and sustainable market.

·  Service providers were consulted on the proposals during March 2020 and were invited to identify potential impacts and risks eg to provider/market and service delivery, and to suggest mitigating actions. The outcomes have been fully considered in making these final recommendations.

·  The Council’s financial pressures are significant, with savings required in 2020/21 and cost pressures anticipated to continue. The review has been undertaken with regard to the budget savings required across adult provision, due to reductions in the funding the Council receives from central government and other current economic pressures. These proposals are considered the fairest way to allocate the funding available in the light of the Council’s financial pressures and within the context of the overall funding for adult social care provision.

·  Following approval of the proposed model, it is proposed to notify providers of the banding of their individual homes during September 2020. The banding of individual services will be subject to an appeals process should providers wish to challenge this decision.

·  It is proposed to implement this pricing model for new placements in residential and nursing care from 1st December 2020. It is also the intention to implement the model for existing placements from 1st December 2020, however this will be confirmed following completion of the appeals process.

Other options considered in making recommendations:

·  Do nothing. This is not recommended as it does not address the current inconsistencies in the pricing of specialist packages of care and achieve the aim of adopting a more consistent, streamlined and fair process across all providers.

·  Adopt a different model of fee rates. This is not recommended as the proposals are the result of significant analysis and financial modelling undertaken, taking into account knowledge of the market and the overall budget pressures upon the Council. The recommendations consider the potential impact on service delivery and the market. Offering alternative fee rates would place additional pressure on the Adult Social Care budget and this is not a feasible option.

·  To undertake analysis of individual placement costs and offer fee rates based on the cost of care, factoring in staffing and other operating costs. This option would not be feasible as it would be highly administratively burdensome and problematic as rates of pay and other factors are not standard across the sector.