Agenda item

Report of Corporate Director for People

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

Jackie Wyse, Interim Head of Service, Contracts, Quality and Personalisation, presented the report, and stated the following:

a)  as Nottingham City Council is contractually obliged to consider fee rates on an annual basis where it has a statutory duty to provide a service, the report presents proposals for fee rates in 2024/25 across Adult Social Care contracted provision;

b)  consultation will be undertaken with providers on the proposals and the responses will be fully considered prior to implementation from April 2024;

c)  the Council’s fee rates for adult social care services have historically been reviewed annually and decisions based on an established methodology for calculating inflationary increases. An evidence base for pricing was originally developed based on the UK Homecare Association model for Care at Home type services and independent review of residential care pricing. These tools have been adjusted to account for factors including the current market position, cost of living indices and Office of National Statistics data;

d)  every year, these established tools have been used to undertake analysis of the potential impact of national living wage requirements and other pressures such as cost of living, pensions, profit, and voids. Alongside these financial pressures, there are other aspects which are considered:

o  the current provider market including number of providers and quality of the market;

o  demand for social care provision arising from demographic pressures;

o  difficulty in attracting workers into the care sector due to competition from other sectors;

o  competition between Local Authorities and their ability to pay more to the market

o  the fee rate modelling process has therefore been key to support social care providers to meet NLW and other cost pressures, and to manage the social care market, whilst balancing against the Council’s other budget commitments and pressures;

e)  in December 2021, the Department of Health and Social Care announced the new Market Sustainability and Fair Cost of Care Fund, available to support local authorities to begin preparing local care markets for reform and moving towards sustainable funding for this market;

f)  local authorities were expected to use this funding for activities such as conducting a cost of care exercise; improving data on costs; strengthening capacity for market oversight; and increasing fee rates as appropriate to local circumstances;

g)  in 2023-24, Nottingham City Council received an allocation of £5.99m from this fund, which has been used to support transformational work, to complete a strength-based review, bolster staffing levels and to provide a sustainable level of funding. The Fair Cost of Care work has been completed; however, the local response rate was extremely low (mirrored nationally) and therefore the outcome was inconclusive;

h)  due to the significant budget constraints, further options have been proposed and are outlined in exempt appendix 1. Information in relation to the market context (including benchmarking) and intelligence relating to the fragility of the market, quality and provider failure that is outlined within exempt appendix 3.

Resolved to

(1)  approve the fee uplift proposal (as outlined in exempt appendix 1, option 2) to enable consultation with the market to take place;

(2)  delegate authority to the Director of Commissioning and Partnerships in consultation with the Director for Adult Health and Social Care to agree fee rates in accordance with the proposals detailed in section 3 of the report and in exempt appendix 1, subject to the outcome of consultation with providers and in line with the Council budget;

(3)  note that, subject to consultation outcomes, the agreed rates will be implemented from April 2024;

(4)  approve the spend of £11.337m associated with this decision, including approval to spend against high-cost placement provision through the Council’s scheme of delegation for Adults Care Packages;

(5)  note that, if upon completion of consultation the financial impact of any revised proposals exceeds the budget available, further approval from this Committee will be sought.

Reasons for recommendations

a)  Section 5 of the Care Act, 2014 states: A local authority must promote the efficient and effective operation of a market in services for meeting care and support needs with a view to ensuring that any person in its area wishing to access services in the market has a variety of:

a)  providers to choose from who (taken together) provide a variety of services;

b)  high-quality services to choose from;

b)  The Care Act statutory guidance states in 4.35 Local authorities must not undertake any actions which may threaten the sustainability of the market as a whole, that is, the pool of providers able to deliver services of an appropriate quality – for example, by setting fee levels below an amount which is not sustainable for providers in the long-term. However, this should be considered with the duties relating to the delivery of a balanced budget;

c)  in accordance with the Council’s legal obligation, consultation on these proposals will be undertaken with adult social care providers during prior to April 2024;

d)  the Director of Commissioning and Partnerships in consultation with the Director for Adult Health and Social Care will take account of consultation responses and issue variations to existing contracts reflective of the proposals in this report should no significant issue arise. Should the outcome of these consultations require consideration of notable change to the sustainability of the market and/or financial consequences of these proposals a further report will be presented through the appropriate governance process;

e)  the proposals and the associated financial modelling are based on current full year financial forecasts in 2023/24;

f)  the recommendations presented take account of the implications of inflationary pressures on the adult social care market and aim to represent a fair allocation of funding and to support the market across all service areas. It is considered that a balanced, reasoned, and informed approach has been taken and that the proposals seek to support a sustainable, efficient, and effective market within the available resources.

Other options considered

a)  Consideration was given to a hybrid model, whereby each option would be broken down into two parts, part one applied the proposed uplift to all provision, part 2 applied the proposed uplift to providers on a contracted rate. (A contracted rate is one that is either a standard rate, a banded rate, or a commissioned rate. It does not include any provision where the rate is variable, and the provider has been able to state their fees at the point of placement).

b)  Although the hybrid options have been considered they are not recommended. The care packages are currently recorded in CONTROCC in such a way that it is impossible to determine which are contracted and which are variable resulting in an inability to financially model this option.

c)  Banded rates were introduced for working age adults residential care approximately 3 years ago, however, this only applied to new placements and not existing placements. It could also create disparity between providers, as not all providers had the opportunity to sign up to the banded or standard rates due to the specialisms they offer.

d)  Alongside the uplift proposals outlined within this report, there are a range of projects (appendix 3) being undertaken to reduce the financial impact of the fee rate increases, including any additional resources required to accelerate these projects.

e)  A range of options have been scoped and outlined within exempt appendix 1, with recommendations based on meeting statutory duties in relation to market stability and whilst balancing this with budget pressures. From the options proposed in appendix 1, option 2 is recommended, along with the contingency measures in section 3 of the appendix.