Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 18th April, 2012
Report of the Cabinet Member for Social and Care Services
Setting a standard contracting rate for places in independent residential homes for older people
Purpose of the Report
1. To advise Cabinet of the process which will be used to determine the fees that the Council will pay in 2012/2013 when contracting for places in residential care homes for older people run by the independent sector.
1. That Cabinet agrees the process to be used.
Reasons for the Recommendations
1. To clarify the process for establishing 2012/2013 fee levels.
2. At its meeting on 29th November 2011, Cabinet endorsed the care home fees for 2011/2012. The fee-setting process employed the robust and evidenced methodology adopted by the Council in 2007/8 to ensure a fair price and information about costs provided by the independent sector was taken into account.
3. In setting the fees for 2011/2012, there were additional factors to be given proper consideration.
· In August 2010, the Welsh Government published new statutory guidance on commissioning social services “Fulfilled Lives, Supportive Communities: Commissioning Framework Guidance and Good Practice”. Additional work was required by the Directorate to ensure compliance with this guidance during the fee-setting process. On 16th November 2011, Cabinet was asked to approve two documents which represent significant milestones in bringing about improved commissioning practice - the Social Services Commissioning Framework 2011 and the Social Services Commissioning Strategy for Older People's Services 2011 to 2018.
· There was a successful public law challenge to Pembrokeshire County Council’s policy for setting care home fees, known locally as the “Forest Care Home” case. Whilst the case was in relation to Pembrokeshire Council, the judgement had implications for all local authorities when negotiating fees with independent providers of residential care homes.
4. The Council takes seriously its responsibilities for complying with legislation, guidance and case law precedent. This includes attempting to reach a shared understanding with the independent sector about the issues they face in ensuring the continued provision of quality care in the Vale of Glamorgan. As a result of dialogue, the methodology for setting care home fees was amended to ensure it took into account the issues raised, the requirements of the Welsh Government guidance and lessons from the “Forest Care Home” case. It was not possible to reach agreement with the independent sector providers in some specific areas - management costs, running costs and the capital elements. It was agreed that issues concerning the capital elements would be addressed in discussions about setting the fee for 2012/2013. At the Cabinet meeting in November, elected Members acknowledged the work that had been undertaken with the independent sector and requested that this dialogue should continue.
5. The fees set for 2011/2012 were 13% above those for the previous financial year.
Relevant Issues and Options
6. Since January 2012, officers from the Social Services Directorate have met with representatives of the independent care home sector in the Vale of Glamorgan on three occasions. These meetings were used to continue sharing information about current pressures within the independent sector and to identify any changes that may be required to the fee-setting methodology in response.
7. One of the meetings was attended by officers from the Council, representatives from the care home sector and external experts who have worked with the Council on this matter since 2007/2008. The issues raised at this meeting are still being explored, including differentiated rewards for quality.
8. Additionally, there is a need to consider with the providers the implications of adopting an ‘open-book approach’ for ascertaining costs, profits, relative efficiency and forward investment or business plans. Such an approach is required in order to deal with questions about financial viability, sustainable provision of residential care and safeguarding the welfare of current residents. The report to Cabinet in November 2011 made it clear that, on the basis of the considerable increase in fee levels brought about by the proposed uplift, the Council:
· intended to work with the independent sector to ensure that the services provided are efficient, effective and mindful of the pressures on the public purse
· would be asking providers to demonstrate that their financial arrangements keep people safe and to show that their business is sustainable in terms of occupancy rates, cash flow, volumes and transparent accounts.
9. It is proposed that, if possible, a report is brought to Cabinet in June recommending the standard care home fees for 2012/2013. This timescale has been discussed and agreed with the representatives of the independent sector providers.
10. Some issues will take longer to resolve, including development of:
· a quality framework as a method of assessing the quality of care in each home and making appropriate payments to high performing care homes; and
· an audit framework to evaluate the financial viability of care homes.
11. It has been agreed with representatives of the independent sector that this work will be completed by September 2012, with the audits scheduled to take place between October and March. The findings will be included as part of the process for determining care home fees for 2013/2014
Resource Implications (Financial and Employment and Climate Change, if appropriate)
12. The standard contracting rate paid to the independent sector for care home placements must be fair, comply with Welsh Government guidance and legislation, and take into account the financial resources available to the Council. Because of the placement numbers involved, the level of payment has a considerable impact upon the budget of the Social Services Directorate.
13. Within the budget for 2011/2012, an inflationary increase of 2% was provided for care home fees, which equated to £81,000. The total additional cost of the uplift in fees agreed last November is £587,000 per annum, contributing significantly to the predicted overspend within the Directorate’s budget. This will be a considerable cost pressure in coming years. The revenue budgets for 2012/2013 includes an inflationary increase of 2% in relation to this area of spend.
Legal Implications (to Include Human Rights Implications)
14. The legislative context within which the Council sets fees for residential and nursing care placements requires that it must aim to ensure stability and sustainability in the provision of placements, so that obligations under the community care legislation can be met.
Crime and Disorder Implications
15. There are no crime and disorder implications as a direct result of this report.
Equal Opportunities Implications (to include Welsh Language issues)
16. Section 149 of The Equalities Act 2010 has replaced and incorporated the Race Relations Act 1976, the Sex Discrimination Act 1975 and the Disability Discrimination Act 1995 Public Sector Duties. Section 149 states:
A public authority must in the exercise of its functions give due regard to the need to:
a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.
17. A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to the matters mentioned in subsection (1).
18. Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;
b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;
c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.
19. The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.
20. Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
a) tackle prejudice, and
b) promote understanding.
21. Compliance with the duties in this section may involve treating some persons more favourably than others but this is not to be taken as permitting conduct that would otherwise be prohibited by or under this Act. The relevant protected characteristics are - age; disability; gender reassignment; pregnancy and maternity; rate; religion or belief; sex, sexual orientation.
22. Any changes to social care services should demonstrate compliance with the Act and Equalities Impact Assessments will be undertaken where appropriate.
23. The agreement of a standard fee is intended to ensure that service users can gain access to homes in the independent sector providing good quality care at a reasonable cost.
24. The setting of care home fees contributes to the corporate priority of “working with partners to meet the diverse needs of our residents in ways that will safeguard and support those who are most vulnerable and in greatest need; help people to keep fit and healthy; and increase social cohesion and equality of opportunity for all”.
Policy Framework and Budget
25. This is a matter for Executive decision.
Consultation (including Ward Member Consultation)
26. There are no matters in this report which relate to an individual ward.
27. Care home owners and managers have been consulted on the proposed process for setting care fees as outlined in this report.
Relevant Scrutiny Committee
28. Social Care and Health
Cabinet meeting report and minutes of 15th October 2008 - A Fair Price for Residential Care 2007/2008
Cabinet meeting report and minutes of 19 January 2011 - the Statutory Guidance on Commissioning (Fulfilled Lives, Supporting Communities)
Cabinet Meeting report and minutes of 13th April, 2011 - Social Services Change Plan 2011-2014
Cabinet meeting report and minutes of 16 November 2011 - Social Services Commissioning Framework 2011 and the Social Services Commissioning Strategy for Older People's Services 2011 to 2018
Cabinet meeting report and minutes of 16 November 2011 – Pressure on the Social Services Revenue Budget 2011/2012 and Budget Recovery Actions Plans
Cabinet meeting report and minutes of 29th November, 2011 - Setting the standard contracting rate for places in independent residential care homes for older people in 2011/2012
Philip Evans, Director of Social Services
Corporate Management Team
Philip Evans, Director of Social Services