Agenda item

Report of the Deputy Chief Executive (People)

The Cabinet Member considered a report of the Deputy Chief Executive (People) regarding market cost pressures and fee rates uplifts 2018/19 in Adult Social Care.

A separate report was submitted in private in respect of this item, as it contained details of financial information required to be kept private in accordance with Paragraph 3 of Schedule 12A to the Local Government Act 1972.  The grounds for privacy were that it refered to the identity, financial and business affairs of an organisation.

Sustainability of the adult social care market was of major importance in order to ensure the safety, health and wellbeing of vulnerable adults with a range of eligible social care support needs.  The Care Act (2014) placed duties on Local Authorities to ensure a sustainable market for adult social care and, amongst other responsibilities, required councils to be assured that fee rates paid to social care providers enabled them to meet legislative requirements including those relating to payment of the National Living Wage (NLW) or National Minimum Wage (NMW).  The Act also placed duties on Councils to ensure a sustainable market for adult social care.

Whereas some increases had been applied as standard to recognise costs associated with NLW the Council currently considered requests from providers for fee increases in excess of this on a case by case basis and in agreeing any increases a range of factors were taken into account including existing fee levels as a market comparison and time elapsed since a previous uplift was agreed.  Council Tax precept and improved Better Care Fund (iBCF) resources had been used to fund these increases.

Applying the above principles providers of long term services for people with learning disabilities in the City had generally attracted higher than average fee rates, therefore, no increase was offered for this provision.  Some providers had responded by seeking uplifts partly as a consequence of national living wage increases but also as a result of a requirement to pay NLW for sleep ins and had also highlighted other general inflationary pressures.  Such requests had been negotiated on a case by case. 

All fee increases were agreed on the basis of market sustainability in that to not agree any increases would probably result in a position where providers were unsustainable and would therefore seek to exit contracts where no readily available alternatives exist.

The report described the impact of fee rate increases, outlined options considered and sought endorsement of the approach taken and approval of increases in excess of £100k per annum.

Option 1 was the recommended option to endorse the approach to fee increases currently applied, as described in the report and noting that changes to the approach may be required dependant on changing financial or legal circumstances.

In two instances providers had approached the Council for increases in excess of £100k per annum.  Cabinet Member was recommended to approve these increases based on the circumstances detailed in the report.

Option 2 was not recommended and was to decline the increases. This may impact on the provider’s ability to meet the needs of service users and could result in the council potentially paying a greater fee level than that sought for alternative provision. 

Providers were given a deadline of 30th June to respond to initial fee uplift offers, where increases have yet to be implemented uplifts would be made by 31st October backdated to 1st April 2018.

The cost of initial National Living wage uplifts for older people accommodation based services, generic home support provision and day opportunities stood at approximately £500k for 2018/19.  Subsequent negotiation in respect of national living wage with disability providers was estimated to cost an additional £160k.  There were a limited number of negotiations yet to be concluded, in respect of broader inflationary pressures, however, the anticipated impact was an additional funding requirement of approximately £680k.

The Cabinet Member was requested to approve uplifts over £100k.  For 2018/19 this was expected to apply to two providers as most increases were below this threshold.  Details in relation to the two providers were shown in the table in the report.  These increases were expected to exceed £100k for a number of reasons.  In the case of Provider A due to the volume of service users and the fact that no increases had been awarded for a number of years with hourly rates being below the average for Supported Living provision.  With respect to Provider B, again no uplifts had been granted for a number of years.  An established in City provider served notice on their contract which  resulted in a business to business  transfer to Provider B who had to work to a tight timescale to ensure service continuity which did not allow for a forensic analysis of financial sustainability.  Subsequent in depth analysis by the provider elucidated significant financial risks to them at current rates resulting in the request for a significant uplift for 2018/19. 

Costs of all uplifts were to be met through a combination of Council Tax precept and improved Better Care Fund (iBCF) resources with reporting on the latter sought through Adult Joint Commissioning Board as per the s75 agreement.

When commissioning services, The Care Act (2014) required local authorities to be assured that contract terms, conditions and fee levels for care and support packages were appropriate to support the delivery of good quality care. This included being satisfied that service providers were able to meet statutory obligations including those relating to payment of the National Living Wage (NLW) or National Minimum Wage (NMW).  The Act and associated statutory guidance also confered duties on Councils to take action to shape social care markets and ensure sustainability of  a range and sufficiency of good quality care provision to enable adults with eligible care and support needs to have those needs appropriately met and offer choice where possible.

In July 2018 the Court of Appeal overturned a previous Employment Tribunal Ruling made in April 2016 and re-instated the option to pay a flat rate payment for staff sleeping in for most of the circumstances relevant to this report.  Unison have applied to the Supreme Court in a challenge to this judgment but at the time of writing it has yet to be determined if the Supreme Court would allow the appeal to be heard. 

The Cabinet Member and Shadow Cabinet Member discussed the following areas with the officers present:

·  The pragmatic approach and reviewing as necessary

·  The uncertainty of the Better Care Fund

RESOLVED that the Cabinet Member

1.  Endorse the approach taken to agreement of fee increases for   providers of adult social care

2.  Approve increases in excess of £100k as detailed in section 5.1 of   the report.