“(1) 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— (a) has a variety of providers to choose from who (taken together) provide a variety of services; (b) has a variety of high quality services to choose from; (c) has sufficient information to make an informed decision about how to meet the needs in question. (2) In performing that duty, a local authority must have regard to the following matters in particular— (a) the need to ensure that the authority has, and makes available, information about the providers of services for meeting care and support needs and the types of services they provide; (b) the need to ensure that it is aware of current and likely future demand for such services and to consider how providers might meet that demand; (c) the importance of enabling adults with needs for care and support, and carers with needs for support, who wish to do so to participate in work, education or training; (d) the importance of ensuring the sustainability of the market (in circumstances where it is operating effectively as well as in circumstances where it is not); (e) the importance of fostering continuous improvement in the quality of such services and the efficiency and effectiveness with which such services are provided and of encouraging innovation in their provision; (f) the importance of fostering a workforce whose members are able to ensure the delivery of high quality services (because, for example, they have relevant skills and appropriate working conditions).”
“Providers have become increasingly concerned that some commissioners have used their dominant position to drive down or hold down fees to a level that recognises neither the costs to providers nor the inevitable reduction in the quality of service provision that follows. This is short-sighted and may put individuals at risk. It is in conflict with the Government’s Best Value policy. And it can destabilise the system, causing unplanned exits from the market. Fee setting must take into account the legitimate current 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 working. …”
“A local authority must act under the general guidance of the Secretary of State in the exercise of functions given to it by this Part or by regulations under this Part.”
“4.11 This statutory guidance describes, at a high level, the themes and issues that local authorities should have regard to when carrying out duties to shape their local markets and commission services. Market shaping, commissioning, procurement and contracting are inter-related activities and the themes of this guidance will apply to each to a greater or lesser extent depending on the specific activity. …” “4.27 Local authorities should commission services having regard to the cost-effectiveness and value for money that the services offer for public funds. The Local Government Association Adult Social Care Efficiency Programme ( … ) has advice on these issues and may be helpful. …” “4.31 When commissioning services, local authorities should assure themselves and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care. This should support and promote the wellbeing of people who receive care and support, and allow for the service provider ability to meet statutory obligations to pay at least the national minimum wage and provide effective training and development of staff. It should also allow retention of staff commensurate with delivering services to the agreed quality, and encourage innovation and improvement. Local authorities should have regard to guidance on minimum fee levels necessary to provide this assurance, taking account of the local economic environment. This assurance should understand that reasonable fee levels allow for a reasonable rate of return by independent providers that is sufficient to allow the overall pool of efficient providers to remain sustainable in the long term. The following tools may be helpful as examples of possible approaches: • UKHCA Minimum Price for Homecare ( … ) • Laing and Buisson toolkit to understand fair price for residential care ( … ) • ADASS paying for care calculator ( … )” • UKHCA Minimum Price for Homecare ( … ) • Laing and Buisson toolkit to understand fair price for residential care ( … ) • ADASS paying for care calculator ( … )”
“In determining how to meet needs, the local authority may also take into reasonable consideration its own finances and budgetary position, and must comply with its related public law duties. This includes the importance of ensuring that the funding available to the local authority is sufficient to meet the needs of the entire local population. The local authority may reasonably consider how to balance that requirement with the duty to meet the eligible needs of an individual in determining how an individual’s needs should be met (but not whether those needs are met). However, the local authority should not set arbitrary upper limits on the costs it is willing to pay to meet needs through certain routes – doing so would not deliver an approach that is person-centred or compatible with public law principles. The authority may take decisions on a case-by-case basis which weigh up the total costs of different potential options for meeting needs, and include the cost as a relevant factor in deciding between suitable alternative options for meeting needs. This does not mean choosing the cheapest option; but the one which delivers the outcomes desired for the best value.”” (2) Chapter 11 of the Guidance is headed “Personal budgets”
“11.4 It is vital that the process used to establish the personal budget is transparent so that people are clear how their budget was calculated, and the method used is robust so that people have confidence that the personal budget allocation is correct and therefore sufficient to meet their care and support needs. The allocation of a clear upfront indicative (or ‘ball-park’) allocation at the start of the planning process will help people to develop the plan and make appropriate choices over how their needs are met.” “11.10 The personal budget must always be an amount sufficient to meet the person’s care and support needs, and must include the cost to the local authority of meeting the person’s needs which the local authority is under a duty to meet, or has exercised its power to do so. This overall cost must then be broken down into the amount the person must pay, following the financial assessment, and the remainder of the budget that the authority will pay.” (3) Annex A to the Guidance is headed “Choice of accommodation and additional payments”
“… a declining trend in terms of the number of providers under review demonstrating that generally the quality of provision within Essex is high for this sector. In 2016, the Care Quality Commission (CQC) assessed 79% services inspected in Essex as either “good” or “outstanding”
“There are very few care home closures in Essex and the majority of those that do close are as a result of quality issues rather than financial distress. Frequently, when a care home has closed it has been taken over by another provider which indicates that it is still seen as a viable operation financially.”
“Different providers chose to bid at different points in the price matrix: some at the bottom, many within the middle of the range and some at the top of the matrix.”
“Laing and Buisson’s 6th Edition Fair Market Price for Residential and Nursing Care (October 2014 – March 2015) was used as the baseline position for the cost of care model and was adjusted for the impact of the increase to National Minimum Wage (NMW) in October 2015 (20p per hour increase to£6.70 per hour) and the introduction of National Living Wage in April 2016 (£7.20 per hour for workers aged over 25).”
“A number of sources of information were considered to help inform the development of the cost of care financial model. • Data from other local authority cost exercises although a lack of detailed assumptions meant that comparisons were difficult to make • Returns from the cost breakdown template sent to Residential and Nursing providers. Only 20 returns were received and the level of information included was variable leading to difficulties in ensuring a like for like comparison • Data submitted from providers to support uplift requests which was used predominately to triangulate the findings rather than to develop the cost model in the first instance • Laing and Buisson’s 6th Edition Fair Market Price for Residential and Nursing Care (October 2014 – March 2015). This was used as the baseline position and was supported by a range of detailed assumptions which have been challenged and amended, where relevant, to account for Essex-specific intelligence and/or Council assumptions around ‘efficient’ models of delivery.” • Data from other local authority cost exercises although a lack of detailed assumptions meant that comparisons were difficult to make • Returns from the cost breakdown template sent to Residential and Nursing providers. Only 20 returns were received and the level of information included was variable leading to difficulties in ensuring a like for like comparison • Data submitted from providers to support uplift requests which was used predominately to triangulate the findings rather than to develop the cost model in the first instance • Laing and Buisson’s 6th Edition Fair Market Price for Residential and Nursing Care (October 2014 – March 2015). This was used as the baseline position and was supported by a range of detailed assumptions which have been challenged and amended, where relevant, to account for Essex-specific intelligence and/or Council assumptions around ‘efficient’ models of delivery.”
“2.1 Agree that residential placements for older people made on a spot contract before1 August 2015 or under an old framework which are being paid at less than£647 per week be increased by£13.58 per week, or to£647 , whichever is the lower. 2.2 Agree that nursing placements for older people made on a spot contract before1 August 2015 or under an old framework which are being paid at less than£665 per week be uplifted by£13.79 per week, or to£665 , whichever is the lower. 2.3 Agree that the uplifts above only be applied to all older people residential and nursing placements which are in force as of1 July 2016 . 2.4 Agree any uplift payable be backdated to1 April 2016 when the National Living Wage (NLW) was introduced and increased costs were incurred by providers. 2.5 Agree that those people who meet the costs of their care are given a minimum 28 days notification of increased contributions required, with the increased contributions being collected for accommodation costs commencing1 September 2016 .”
“3.2 The Older People’s residential care provider market in Essex has come under increasing financial pressure over recent years as a result of numerous factors: • The Council has had a policy of 0% uplift on rates for a number of years, although the introduction of the Quality Improvement Fund on1 April 2013 put an additional£8m per annum of funding into the Older People sector (not just Residential and Nursing); • The cohort of individuals accessing residential and nursing care display increasing levels of complexity as the Council’s commissioning strategy is to support individuals to maintain independence for as long as possible. This means that the average costs associated with providing care have increased over time; and • Legislative changes affecting the cost of employing staff in recent times including mandatory pension requirements, changes to national insurance contributions and the increase in minimum wage (most recently the 50p per hour increase to a National Living Wage of£7.20 per hour) have resulted in cost pressures across the sector. This alongside other pressures for example insurance premiums and CQC registration costs means many providers report that they are struggling to survive financially. 3.3 National intelligence suggests that the Older People’s residential care sector is struggling with regards to financial sustainability. Recent examples in the news include: • The losses incurred by the largest care home operator in Britain. At the end of April, Four Seasons Health Care reported an annual pre-tax loss of£264m , with credit rating agencies recently warning that it is likely the company will be taken over by its creditors. The low rates paid by local authorities is said to be one of the main contributing factors in the poor outlook for the company. • Research commissioned by BBC Radio 4’s You and Yours programme which found that average profit per care home was under£18,000 before tax. The research suggests that low profits along with the debt typically carried by homes, up to 5,000 (25%) of homes in the UK are at high risk of closure within the next three years. The research also suggests the low profits are holding back operators from investing in homes. • The fact that nationally more than 7,000 beds were deregistered in the year to March 2016, and with only 3,000 new beds registered in the same period the 4,000 net loss is the biggest for a decade. Again, the low rates paid by local authorities are highlighted as one of the leading contributing factors.” • The Council has had a policy of 0% uplift on rates for a number of years, although the introduction of the Quality Improvement Fund on1 April 2013 put an additional£8m per annum of funding into the Older People sector (not just Residential and Nursing); • The cohort of individuals accessing residential and nursing care display increasing levels of complexity as the Council’s commissioning strategy is to support individuals to maintain independence for as long as possible. This means that the average costs associated with providing care have increased over time; and • Legislative changes affecting the cost of employing staff in recent times including mandatory pension requirements, changes to national insurance contributions and the increase in minimum wage (most recently the 50p per hour increase to a National Living Wage of£7.20 per hour) have resulted in cost pressures across the sector. This alongside other pressures for example insurance premiums and CQC registration costs means many providers report that they are struggling to survive financially. • The losses incurred by the largest care home operator in Britain. At the end of April, Four Seasons Health Care reported an annual pre-tax loss of£264m , with credit rating agencies recently warning that it is likely the company will be taken over by its creditors. The low rates paid by local authorities is said to be one of the main contributing factors in the poor outlook for the company. • Research commissioned by BBC Radio 4’s You and Yours programme which found that average profit per care home was under£18,000 before tax. The research suggests that low profits along with the debt typically carried by homes, up to 5,000 (25%) of homes in the UK are at high risk of closure within the next three years. The research also suggests the low profits are holding back operators from investing in homes. • The fact that nationally more than 7,000 beds were deregistered in the year to March 2016, and with only 3,000 new beds registered in the same period the 4,000 net loss is the biggest for a decade. Again, the low rates paid by local authorities are highlighted as one of the leading contributing factors.”
“4. Options 4.1 Status Quo (i.e. no uplift for existing placements) There is no contractual obligation on the Council to uplift existing residential and nursing placements so one option would be to maintain rates at the current levels. This is not a recommended option as the Council does have an obligation under the Care Act to maintain a sustainable market of diverse provision and to ensure fees are at a sufficient level to enable providers to meet their legal obligations. Providers have had to absorb many cost increases over recent years including, amongst other things, normal inflationary pressures, pension auto-enrolment and year on year increases to National Minimum Wage. The recent introduction of National Living Wage makes is increasingly difficult for providers to maintain the current fee levels. 4.2 Affordable increase The Council recognises the cost pressures faced by Social Care providers whilst also facing similar financial pressures itself. The second option would be to uplift existing placements that have not had the opportunity to reflect the increased cost of National Living Wage by an amount broadly equivalent to the impact of its introduction. This equates, according to the Council’s cost model, to£13.58 for residential placements and£13.79 for nursing placement, subject to a cap of£647 for residential placements and£665 for nursing placements. This is the option recommended in this paper. 4.3 Full cost of care increase The final option identified is to uplift all rates to the calculated cost of care figures of£647 per week for residential placements and£665 per week exclusive of Funded Nursing Care for nursing placements. This is not a recommended option as the financial impact on the Council would be a minimum of£25.7m per annum taking into account the likely increased contribution levels for full cost payers. The Council’s financial situation does not allow this to be a viable option at this point in time.”
“2 Financial implications 2.1 Within the£118.5m 2016/17 budget for residential and nursing care,£2.3m was notionally allocated for managing the impact of the National Living Wage (NLW) within the older people residential and nursing case sector. 2.2 Within the report, it is indicated the expected net cost of the recommendations is£1.6m . It is likely the actual cost when the recommendations are implemented will be lower as a result of placements changing or adults leaving residential care. Based on the average reduction seen over the last three months, net costs could fall by£63,000 over June and every month thereafter. 2.3 With an estimated net cost of£1.6m , this is within the£2.3m allocated notionally for NLW impact on this market sector (and part of£16.3m allocated across ECC) and therefore the recommendations are affordable within the MTRS. 2.4 The Adult Social Care forecast outturn as at the end of May predicts the£1.6m maximum cost will actually be met from within the budget for inflationary pressures and therefore at the current time it is assumed the NLW budget will not be required. The£1.6m cost is currently noted as a risk against the NLW budget and this will be kept under review.”
“The monetary figure of the proposed uplift comes from detailed financial analysis but is supported by evidence gathered as part of the Care Act work and is in line with what the market told us they would need to cover the increased costs resulting from the changes to National Living Wage.”
“The emphasis in Ms Mountfield's submissions was on the sufficiency of the respondent's inquiries. There is no dispute that the respondent took some steps to equip itself with the relevant information. The appellant's contention is that those steps were insufficient. When considering the force of this submission, it is important to remember that provided some inquiry into the relevant factor to which due regard has to be paid is made by the decision-maker “it is generally for the decision-maker to decide on the manner and intensity of the inquiry to be undertaken into any relevant factor”, see per Beatson J, as he then was, in R (on the application of Bevan & Clarke LLP) v Neath Port Talbot County Borough Council[2012] EWHC 236 (Admin) cited in paragraph 37 of the judgment below.”
“What is the meaning and effect of the obligation to ‘act under the general guidance of the Secretary of State’? Clearly guidance is less than direction, and the word ‘general’ emphasises the non-prescriptive nature of what is envisaged. Mr McCarthy, for the local authority, submits that such guidance is no more than one of the many factors to which the local authority is to have regard. Miss Richards submits that, in order to give effect to the words ‘shall … … act’, a local authority must follow such guidance unless it has and can articulate a good reason for departing from it. In my judgment Parliament in enacting section 7(1) did not intend local authorities to whom ministerial guidance was given to be free, having considered it, to take it or leave it. Such a construction would put this kind of statutory guidance on a par with the many forms of non-statutory guidance issued by departments of state. While guidance and direction are semantically and legally different things, and while ‘guidance does not compel any particular decision’ (Laker Airways Ltd v Department of Trade[1967] QB 643 , 714 per Roskill LJ), especially when prefaced by the word ‘general’, in my view Parliament by s.7(1) has required local authorities to follow the path charted by the Secretary of State's guidance, with liberty to deviate from it where the local authority judges on admissible grounds that there is good reason to do so, but without freedom to take a substantially different course.”