Agenda Item No. 26c


The Vale of Glamorgan Council


Cabinet Meeting: 18th March, 2013


Report of the Cabinet Member for Adult Services


Setting a standard contracting rate for places in independent residential care homes for older people


Purpose of the Report

1.         To outline the process to finalise the fees that the Council will pay when contracting for places in residential care homes run by the independent sector and to seek Cabinet approval for the fees the Council intends to set for 2012/2013.


1.         THAT Cabinet agrees the proposed fees for 2012/2013.

2.         THAT Cabinet gives delegated authority to the Director of Social Services, in consultation with the Leader, Cabinet Member for Adult Services and Managing Director, to vary fee levels in appropriate circumstances.

3.         THAT the Leader and Cabinet Member for Adult Services continue discussions with representatives of the independent sector.

4.         THAT Cabinet receives regular updates about progress in discussing next year's fees with independent providers of residential care and nursing home placements for older people in accordance with the action plan set out in this report.

Reasons for the Recommendations

1.         To establish the final fee for 2012/2013.

2.         To deal with exceptional circumstances where use of the agree contract rates operates against the interests of individual service users or the Council.

3.         To progress the settlement of future fee levels.

4.         To monitor the progress made in the ongoing dialogue with the independent sector in respect of this important commissioning task for the Council and for those in need of the service.


2.         In 2007 the Council adopted a robust methodology to determine care home fees which took into account the actual costs incurred in delivering care. Work was undertaken with the assistance of external experts to develop a toolkit to meet the requirements. The toolkit was adopted in 2007/2008 and has been used since that date to determine the level of fees in the Vale of Glamorgan.

3.         Welsh Government then provided statutory guidance on commissioning social services, setting out the responsibilities of local authorities in this area of work.  The Commissioning Framework Guidance and Good Practice is issued under section 7(1) of the Local Authority Social Services Act 1970.  The Framework has two parts.  Part 1 contains thirteen standards; these provide the benchmark against which the effectiveness of local authority commissioning activity will be measured.  Standards 9 states that: “Contracted social care services offer value for money and are fit for purpose”.  Standard 10 states that: “Commissioners have understood the costs of directly provided services and have acted in a way to promote sustainability”.  This guidance has been an integral part of the ongoing work with the independent sector to agree care home fees.

4.         Since 2011/2012, there has been ongoing dialogue with the care home sector regarding fee levels.  In November 2011, the Vale of Glamorgan Council set the care home fees for 2011/2012.  The fee was determined following extensive work with a small working group, nominated by the sector, to work with officers of the Council.  As a result of the work, the fees for 2011/2012 were 13% higher than those for 2010/2011. The final fees were set on the basis of changes made to the toolkit in response to issues raised by the independent sector.

5.         Although the fees showed a considerable uplift, the independent sector felt that the Council had not addressed all the issues which they had raised.  When the fees were approved by Cabinet 29th November 2011, the following minute was also agreed:

·                "Cabinet values the dialogue between officers of this Council and the independent providers of residential and nursing care, and authorises officers to pursue further discussions in respect of the few areas where agreement has not been reached in this financial year, in order to negotiate the fees for next year."

6.         The work with the sector progressed in a number of ways, including:

·                The electronic version of the toolkit used by the Council to determine fees was shared with the sector, together with the data used to populate it;

·                A number of meetings took place between the representatives from the sector and officers in 2012 during which a range of issues were discussed; and

·                A report was submitted for consideration by Cabinet on December 2012.

7.         Following additional representations from the independent sector, the report was not considered.  Cabinet agreed that the report should be deferred for further consideration and that a working group would be established with the aim of resolving the matter (min C1944 refers).

Relevant Issues and Options

8.         Since December 2012, two meetings have taken place between the Leader and Deputy Leader and representatives from the independent sector to clarify and discuss the outstanding issues.

9.         As an outcome from these discussions, it is proposed to award an uplift of 4.5% for 2012/2013, backdated to April 2012.  This will acknowledge the inflation costs that the sector has borne since the beginning of the year and some inconsistency in allocation of overheads within the toolkit.

10.      It is also proposed to review the method for setting fees for future years in accordance with the following action plan:


·                The whole sector will be asked, as a matter of urgency, to provide the Council with up-to-date data which can be used to inform a potential three-year agreement on fees.  This should result in a more representative sample of data being available.  It will be essential that representatives of the care home sector encourage providers to cooperate in this exercise as the timetable is challenging.

·                The required data would be:

- Cost per bed per week in the home

- Total costs detailed at the following levels:

   employee costs

   premises costs

   transport costs

   supplies and services

- Occupancy levels

·                On receipt of this information, an interim uplift of 2% for 2013/14 will be paid to each home.

Medium Term - end of June 2013

·                The occupancy levels to be used should be agreed and based on a percentage which reflects the operations of an efficient home.

·                Work will be undertaken to verify the data submitted to ensure reliability and agree a figure for inclusion in care home fee calculations.

Longer Term - six months and beyond

·                The methodology will be revisited, following further consideration of the remaining areas of difference between the independent sector and the Council.

·                The Council will ask the independent sector to help develop and adopt a revised contract for care home services.  The proposed data for implementation of the new contract is April 2014 at the latest.

·                If the new contract is adopted, a three-year agreement on fees from 2013/14 will be sought.

11.      On the basis of this proposal above the standard fees for 2012/2013 are set out in Table 1 below

Table 1

Type of Provision

Fee for 2011/2012 £ per resident per week

Fee 2012/2013 £ per resident per week

Percentage Increase

Residential Care for Frail Elderly




Residential Care for Older People with dementia – not incentivised*




Residential Care for Older People with dementia – incentivised*





*The Commissioning Strategy for Older People Services 2011/2018 highlights the need for services to support older people with dementia.  The Council sometimes has difficulties in obtaining specialist places in nursing homes for older people suffering from dementia related illnesses.  It was agreed, therefore, to amend the methodology to provide an additional incentive from April 2012 so that more independent sector providers will be willing to provide this type of care.


Resource Implications (Financial and Employment)

12.      Within the overall social services budget for 2012/2013, there was an increase of 2% to allow for uplifting care home fees to account for inflation.  Because of the considerable number of placements involved, the fee levels have a considerable impact upon the budget of the Social Services Directorate.  Any 1% increase in the fee level increases community care spending by approximately £50,000 per year.  Payments of the 4.5% increase for 2012/13 will be backdated to the beginning of the financial year.  The proposed increase of 4.5% will be funded from underspends elsewhere within the social services budget in the current year.

13.      Not all the residents in these homes are the responsibility of the Vale Council and some of them will pay their own fees.  All the people placed in residential care by the Council are financially assessed with regard to contributing to the cost of the care provided.  These charges are calculated in accordance with the Charging for Residential Accommodation Guidelines produced by the Welsh Government.  The care home is paid net of the resultant assessed charge and the home must collect the balance.

14.      Nursing homes receive an additional payment from the Local Health Board to provide the nursing care required by individual residents.  This payment is currently £120 per resident per week and it has not been uplifted for inflation in the current financial year.

Sustainability and Climate Change Implications

15.      There are no sustainability or climate change implications arising from this report.

Legal Implications (to Include Human Rights Implications)

16.      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 community care legislation can be met.

17.      The National Assistance Act 1948 (Choice of Accommodation) Directions 192 (as amended) places local authorities under an obligation to make arrangements for placing a person assessed as "in need" in accommodation of the preferred choice subject to certain conditions.

18.      Relevant regulations include "The Care Homes (Wales) Regulations 2002" and subsequent amendments.  These regulations state that "the registered provider shall carry on the care home in such a manner as it likely to ensure that the care home will be financially viable for the purpose of achieving the aims and objectives set out in the statement of purpose".

19.      The adoption of the methodology to determine care home fees ensures that the Council meets legal requirements set out in Section 7 guidance from the Welsh Assembly Government and statutory obligations under the NHS and Community Care Act 1990.

20.      The Commissioning Framework Guidance and Good Practice is issued under section 7(1) of the Local Authority Social Services Act 1970.  Section 10 of the guidance indicates the factors which a Council should take into account when considering this issue.

·                Commissioners will have to take into account the full range of demands on them and their strategic priorities, as well as the resources they have at their disposal in developing their commissioning strategies.

·                Fee setting must take into account the legitimate and future costs faced by providers as well as the factors that affect those costs and the potential for improved performance and more cost effective ways of operating.

Equal Opportunities Implications (to include Welsh Language Issues)

21.      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. 

22.      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.


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).


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.


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.


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.


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.


23.      Any changes to social care services should demonstrate compliance with the Act and Equalities Impact Assessments will be undertaken where appropriate.

Corporate/Service Objectives

24.      Key objectives of the Council addressed by this report are:

·                to make the Vale a safe and healthy place in which individuals, children and families can live their lives to the full;

·                to manage the Council’s workforce, money and assets efficiently and effectively in order to maximise its ability to achieve its service aims;

·                to work with partners from the voluntary, public, private and other sectors to establish a shared vision for the future of the Vale and to ensure a co-ordinated approach to realising this vision.


Policy Framework and Budget

25.       This is matter for Executive decision.

Consultation (including Ward Member Consultation)

26.      Care home owners and managers were consulted about the methodology used to determine a fair price for residential care, collectively via the Vale of Glamorgan Care Homes Association and also individually when it was agreed in 2008.

27.      Meetings have taken place with representatives of the care home sector regarding proposed fees for 2012/2013.  The meetings have resulted in changes to the proposed fee level.  Written responses were produced after each of the meetings and shared with the sector.

Relevant Scrutiny Committee

28.      Social Care and Health

Background Papers

Cabinet 16th November: Report of the Cabinet Member for Social and Care Services - the Social Services Commissioning Framework 2011 and the Social Services Commissioning Strategy for Older People's Services 2011 to 2018. 


Cabinet 29th November, 2011:  Report of the Cabinet Member for Social and Care Services - Setting a standard contracting rate for places in independent residential care homes for older people in 2011/2012


Social Care and Health Scrutiny Committee 16th July 2012: Report of the Director of Social Services - Setting a Standard Contracting Rate for Places in Independent Residential Care Homes for Older People 2012/2013


Cabinet 17th December 2012 : Report of the Cabinet Member for Adult Services - Setting a Standard Contracting Rate for Places in Independent Residential Care Homes for Older People 2012/2013


Contact Officer

Carys Lord, Head of Business Management and Innovation


Officers Consulted

Managing Director

Legal Services


Philip Evans

Director of Social Services