Agenda item

Report of Director of Commissioning and Procurement

Councillor Woodings, Portfolio Holder for Adult Social Care and Health, introduced the report.

Prior to discussion, it was stated that the report incorrectly named the responsible Director as ‘Katy Ball - Director of Commissioning and Procurement’, when it should state responsibility laid with ‘Sara Storey - Director for Adult Health Social Care’.

As Ms Storey was not in attendance, Ms Ball presented the report and stated the following:

·  it was proposed to apply a further temporary increase to the rates paid for adult social care services in 2022-2023, effective from 1 October 2022.

·  this was in response to the current impact of inflationary pressures upon these services and the adult social care market overall.

·  a cost of care exercise was currently underway, with the aim of establishing a sustainable position for the funding of this market for the longer term and the proposed increases would be paid, in part, from the Market Sustainability Funding allocated to Nottingham City Council by the Department of Health and Social Care.

Resolved

(1)  to agree temporary increases to the rates paid for all commissioned adult social care services in 2022-23 of up to 4.25% for residential and nursing care services and 2.99% for community services, backdated to take effect from 1 October 2022;

(2)  to approve expenditure of up to £2.33m on the proposed increases in resolution (1) above, funded in part from the Department of Health and Social Care Market Sustainability Fund allocation to Nottingham City Council.

Reasons for recommendations

Nottingham City Council is obliged to consider the fee rates it pays for its commissioned social care services, and in doing so to take into account a number of factors, within the context of the wider financial position of the Council.  Section 5 of the Care Act 2014 obliges Local Authorities to promote the efficient and effective operation of the market for adult social care as a whole. They must have regard to the need for sufficient services to be available in the area and the importance of sustainability in this market.

The pricing of all adult social care services for 2022-23 was set in March 2022 based on proposals developed during the autumn 2021. These rates were based upon inflationary pressures in November 2021 and therefore did not provide for the significant inflationary increase now being experienced. General inflation is currently having a significant impact upon the care sector, causing providers to struggle to meet costs.

To develop a detailed understanding of the impact of inflation on this market, specific elements of the Consumer Price Index have been applied to the pricing tools that were previously developed to calculate annual inflationary increases. The biggest impact is from energy and fuel, with inflation on these items running at between 17 and 80%. Food inflation is also high at 8.6%. Wage inflation is likely to impact on the longer term National Living Wage (NLW) set annually by government, with wage inflation currently at over 7% in the private sector.

These inflationary pressures mean that some providers are struggling to provide services and a number have requested additional funding to maintain service provision. Wage inflation is impacting on the availability of staffing and providers are finding it difficult to recruit. Some services such as home care that were previously under pressure are now failing to keep up with demand.

The proposed increases are based upon local provider prices for standard residential care, including top up fees; and for homecare, the impact of wage inflation as the tool calculates rates based upon the hourly rate paid to the worker.

For community-based services such as homecare and care, support and enablement, provision has been made for travel costs which will increase from 30p to 40p per mile to reflect increased costs. Providers may use this funding as they decide best to deliver the service; for example by increasing the overall hourly rate paid to staff, or by increasing the travel allowance.

It is anticipated and providers will be encouraged to pass on part of these increases directly to staff to support recruitment and retention at this difficult time.

It is considered that a fair, balanced and informed approach has been adopted in developing these recommendations and that the proposed increases aim to support a sustainable, efficient and effective market across all areas of adult social care, within the available resources.

Other options considered

Do nothing. This option was rejected due to the current serious impact of current inflationary pressures on the adult social care market and the associated risks of service and market failure.

Offer different levels of increase. This is not recommended as these proposals are based on modelling using established tools, adjusted to take account of current data on inflation and local market factors.