Agenda Item No 8


The Vale of Glamorgan Council


Scrutiny Committee (Social Care and Health): 19th May, 2014


Report of the Director of Social Services


Setting a Standard Contracting Rate for Places in Independent Residential Care Homes for Older People


Purpose of the Report

1.         This report updates Scrutiny Committee on the work undertaken to set a standard contracting rate for places in independent residential care homes for older people.


That members of the Scrutiny Committee note the work undertaken to set care home fees for 2013/14 and for the next three years.

Reason for the Recommendation

To ensure that Scrutiny Committee can exercise effective oversight of an important local authority function undertaken by the Social Services Directorate.



2.         Setting a standard contracting rate for places in independent residential care homes for older people is a complex issue.  With the assistance of external experts, the Council adopted in 2007 a robust methodology for use when determining annually the fees payable to independent providers of residential care for older people.  The toolkit takes into account the actual costs incurred in delivering care.

3.         Statutory guidance on commissioning social services was then provided by Welsh Government, setting out the responsibilities of local authorities in this area of work.  'The Commissioning Framework Guidance and Good Practice' was 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 can be measured.  Standard 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'.  It makes clear that the Local Authority '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'. This guidance has been an integral part of our ongoing work to establish a fair price for independent sector residential care home placements on an annual basis.

4.         The Council has worked closely with the independent care sector to consider the costs of providing residential care for older people in the Vale of Glamorgan. When the fees were set for 2013/2014, officers were requested to continue meeting with representatives of the sector to establish whether it might be possible to reach a three-year agreement as a means of providing additional business certainty for both providers and the Council. 

Relevant Issues and Options

5.         The independent care home sector was requested to supply up-to-date information regarding their running costs.  By October 2013, all but one of the homes had returned their data and this information was used to inform the work with the sector. This return rate has provided the Council with the most robust data set that the Council has had to work with since the toolkit was introduced.  As agreed by Cabinet, all of the care homes that provided their financial data received a 2% interim uplift in fees, which was backdated to April 2013.

6.         A small working group consisting of officers and representatives from the sector worked on the data, clarifying some anomalies.  The outcome of this work was considered by Cabinet on 28th April 2014 and the report is attached at Appendix 1.  The table below describes the decisions agreed by Cabinet.


Type of Provision

Fee for 2012/2013 per resident per week

Fee for 2013/2014 per resident per week

Fee for 2014/2015 per resident per week

Fee for 2015/2016 per resident per week

Fee for 2016/2017 per resident per week

Residential Care for Frail Elderly






Residential Care for Older People with dementia – incentivised







7.         The Cabinet did receive representations from the Vale of Glamorgan Care Home Association regarding the proposed fees.  It was agreed that further work should be undertaken regarding the fees for nursing home placements as this is a particular source of concern for independent providers.

Resource Implications (Financial and Employment)

8.         Within the social services budget for 2013/2014, an increase of 2% was given, to allow for uplifting care home fees to take account of inflation.  Given the 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 £55,000 per year.  The additional payment of 1% in the last financial year will be backdated to the beginning of 2013/2014. 

Sustainability and Climate Change Implications

9.         The development of a three year settlement to 2016/2017 provides some stability for the sector and enables them to plan their businesses in a way that is not possible when fees are agreed annually.

Legal Implications (to Include Human Rights Implications)

10.      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.

11.      The National Assistance Act 1948 (Choice of Accommodation) Directions 1992 (as amended) places local authorities under an obligation to make arrangements for placing a person assessed as "in need" in their preferred choice of accommodation, subject to certain conditions.

12.      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".

13.      Adopting the methodology to determine care home fees helps to ensure 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.

14.      'The Commissioning Framework Guidance and Good Practice' was 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.

15.      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.

16.      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.

Crime and Disorder Implications

17.      There are no specific crime and disorder implications associated with this report.

Equal Opportunities Implications (to include Welsh Language issues)

18.      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. 

Corporate/Service Objectives

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

·           "Citizens of the Vale of Glamorgan are healthy and have equality of outcomes and, through appropriate support and safeguards, the most vulnerable members of our community maximise their life opportunities";

·           "Older people are valued and empowered to remain independent, healthy and active.  They have equality of opportunity and receive high quality services to meet their diverse needs."

Policy Framework and Budget

20.      The report is in accordance with the Council's policy framework and budget.

Consultation (including Ward Member Consultation)

21.      Meetings have taken place with representatives of the care home sector regarding proposed fees for 2013/2014 and beyond.  The meetings have resulted in changes to the proposed fee levels.    

Contact Officer

Carys Lord


Officers Consulted

Corporate Management Team


Responsible Officer

Phil Evans, Director of Social Services