Adult social care providers

The Government's Department of Health and Social Care (DHSC) asked Councils responsible for Adult Social Care services to survey residential and nursing care homes for older people and home care services in their area about the costs of providing their services. The specific reason for carrying out these surveys in 2022 was the plan to change the statutory framework for Adult Social Care in ways which would entitle anyone needing residential and nursing care home accommodation to ask the Council to contract for this, regardless of their financial circumstances.  After the survey was completed, and the results submitted to DHSC, it was announced that those reforms would be deferred for two years, and the council is not certain whether they will now proceed in their original form.

Because Councils usually at present contract only for people who cannot afford to pay residential care home fees themselves, the reforms would have made Councils responsible for many people who under the current system would contract with a residential/nursing care home privately.  Since many residential/nursing care homes for older people charge higher fees to private residents, this could have caused significant financial issues for both residential/nursing care home providers and Councils. The Government's expectation was that the survey would provide an indication of the extent to which fees paid by Councils might need to rise as this change took effect, to minimise the impact on residential/nursing care home providers. The Government had also carried out financial modelling which suggested that many Councils were paying fees for both residential/nursing care home accommodation and community home care services which were not as high as was necessary to sustain the long-term viability of the services.

DHSC published an impact assessment about the charging reforms that the Government was expecting to introduce in 2023 (PDF document) which explains their expectations about the impact of the reforms on care homes, and the increases to fee levels likely to be required.

 Guidance about the "fair cost of care" survey was published in July 2022. 

The council submitted in October 2022 the documents required by DHSC summarising the results of the "fair cost of care" survey, explaining its current plans for assessing the fees required to sustain residential and nursing care homes and home care services.  It did not publish these documents at the time, since it understood that DHSC wished to review the submissions before publication, to ensure that the calculations included in them were robust and based on good quality evidence.  Following the decision to defer the planned reforms, DHSC informed Council's in late December 2022 that they should now publish their submissions without waiting for DHSC approval on the following dates:

• Cost of Care Reports (Annex B)  on 01/02/2023
• Final Market Sustainability Plan on 27/03/2023

These documents as submitted to DHSC are available through the councils Fair Cost of Care webpage. DHSC have told the Council that it will be asked to produce a final Market Sustainability Plan on a different basis; the council does not yet have details of their expectations for that.

As explained in the documents the conclusion was that, while the surveys provided useful information about the costs of services, there were too many issues about the data for it to act directly as a guide to future fee levels. Since the data was collected, the social care market, both at a national and local levels, has become more pressurised as a result of changes such as the cost of living and also by the labour market. This means that the situation regarding market viability and provider sustainability has changed significantly since when the data was collected. Undoubtedly, costs of providing services have increased over the last 12 months and these pressures need to be effectively reflected in the councils fees setting processes.

It is the councils understanding that a similar conclusion was reached by many other Councils, though varying assumptions were made about how best to calculate the figures returned to DHSC.

There are some minor redactions from the documents as submitted to DHSC. In the explanation of the care home survey results, we have redacted some information which could have identified information supplied in confidence by individual care home operators. 

• Annex B - FCC Exercise - Draft Hillingdon Report - Care Homes (PDF) [375KB]
• Annex B - FCC Exercise - Draft Hillingdon Report - Domiciliary Care (PDF) [386KB]

Limitations to the Cost of Care Exercise  

Hillingdon Council acknowledges that there are widely recognised  limitations with this approach, due to the variation in the market and the statistical relevance of the sample size of providers who contributed. This initial sample oversimplifies what is a complex picture of care and support needs and operating models of providers in the borough. The guidance did not ask Councils to collect or analyse costs or average prices paid for accommodation-based support for working age adults. 

The council takes the view that this has been a useful exercise, as intelligence about cost and the variables that affect cost which will inform the  ongoing engagement with the local market, regional and sub regional stakeholders, helping us to shape sustainable commissioning, contracting and price strategies. In March 2023, the council will submit and share an updated Market Sustainability Plan

Update on the current status of the Cost of Care exercise

The DHSC asked Councils responsible for Adult Social Care services to survey residential and nursing care homes for older people and home care services in their area about the costs of providing their services. The specific reason for carrying out these surveys in 2022 was the plan to change the statutory framework for Adult Social Care in ways which would entitle anyone needing residential and nursing care home accommodation to ask the council to contract for this, regardless of their financial circumstances

The first stage to meet the conditions set out by the DHSC was for each Council  to submit  draft reports on the surveys and analysis carried out to the DHSC by Friday 14 October 2022 on the following - 

1. Appendix A- A spend Report which was collated from  eligible Provider's who chose to engage and submit a cost of care return for their organisation
2. Appendix B-  reports for both Domiciliary Care and Care Homes for people over 65. These reports outlined the exercise we undertook in the engagement with Providers, the number of providers who submitted a cost of care return, analysis on their returns and  how we approached the exercise to arrive at a median rate for Domiciliary Care and Care homes for people over the age of 65
3. A draft Market Position Statement to explain how we would move towards paying a 'fair cost of care' over the next 2 years. 

Hillingdon Council met this requirement but after this exercise was completed it was announced that the reforms would be deferred for 2 years and at this point it is not certain whether they will now proceed in their original form.

The exercise informed the council what the financial impact of the Cost of Care exercise would be. All Councils were notified at the beginning of this year the funding they would receive for 2023/24 but at this stage have not been advised of the available funding for 2024/25 so there is uncertainty at this point on how the council may be able to fully move towards meeting the cost of care.

The second stage of this process to meet the DHSC conditions and eligibility for funding was a requirement to publish the Appendix B reports  on the councils website by Wednesday 1 February making the information available to Providers. It can be confirmed that the council  has met this but due to the uncertainty of further funding for 24/25 the council has also published a statement outlining the limitations of the exercise.

For your information,  the DHSC have also now confirmed that the council is required to publish the final Market Sustainability Plan by Monday 27 March 2023. This plan is currently being updated and finalised ready for approval over the coming weeks. The council is also planning to carry out market engagement with providers regarding the draft MSP prior to its submission to the DSHC.