Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 8
8
Acknowledged
Paragraph: 59
While the Government has provided funding for its charging reforms, we received many concerns that...
Recommendation
While the Government has provided funding for its charging reforms, we received many concerns that it has underestimated the combined cost of introducing a new cap and more generous means test, commencing Section 18(3) of the Care Act 2014 in respect of residential care, and the fair cost of care. It has since expressed its intention to stagger the rollout of Section 18(3), which may help to avert the worst-case scenario in terms of local authority capacity pressures and market sustainability. The 74 Long-term funding of adult social care Government should re-evaluate the combined impact of its charging reforms, Section 18(3), and the fair cost of care, to take account of the staggered rollout of Section 18(3). It should regularly monitor take-up of Section 18(3) and update its models accordingly. The Government should provide further funding to local authorities, if necessary, on top of additional funding for underlying pressures.
Government Response Summary
The government acknowledges the committee's interest in proposals to improve fee transparency and describes existing initiatives like the Market Sustainability and Fair Cost of Care Fund and the Market Sustainability and Improvement Fund, as well as a commitment to consider changing the CQC registration regulations to require greater fee transparency.
Paragraph Reference:
59
Government Response
Acknowledged
HM Government
Acknowledged
The government welcomes the committee’s interest in proposals to improve fee transparency. We know many local authorities have cultivated strong relationships with providers, working in partnership to deliver good quality care despite the ongoing financial, workforce and broader pressures, in a challenging environment exacerbated by the COVID-19 pandemic and the current economic context. Evidence has shown that a significant number of local authorities are paying residential and home care providers less than it costs to deliver the care received .2 2 See CMA Care homes market Study 2017 14 Government response In December 2022, we launched the Market Sustainability and Fair Cost of Care Fund. This was designed to support local authorities to move towards fees that reflect the actual cost of providing care. The Fund guidance,3 published in March 2022, was designed to ensure there is greater transparency between local authorities and providers in the fee-setting element of local authority commissioning processes and individual contract negotiations. The guidance provides detail on what is required from local authorities’ cost of care exercises and market sustainability plans. Local authorities were required to identify and publish the median actual operating costs for different service types in their local area by 1 February 2023, to provide greater transparency and ensure there is greater consistency in understanding the local costs and risks to local markets. These reports are now available to view on local authorities’ webpages, and a list of all published URLs is now also available on GOV.UK: Annex G: cost of care reports - GOV.UK (www.gov.uk). As previously mentioned, we are maintaining current levels of Fair Cost of Care funding for local authorities for the next two years (£162 million per year), given fee uplifts will already have been agreed for year one of the Fund on this basis. However, we have listened to stakeholder concerns that underpayment within the sector is only one issue being faced. Significantly, the boost to adult social care funding through a ringfenced fund of £400 million in 2023–24, rising to £680 million in 2024–25, will support local authorities to continue to build on the progress councils and providers have made this year on fees and cost of care exercises, while balancing this with wider objectives to support capacity and discharge. Local authorities will have flexibility to use the new funding from the Market Sustainability and Improvement Fund (MSIF) to drive improvements across a range of target areas. These are: • reducing adult social care waiting times • increasing adult social care workforce capacity and retention • increasing fee rates paid to adult social care providers Finally, as set out in People at the Heart of Care, we have committed to consider changing the Care Quality Commission (CQC) (Registration) Regulations 2009 to require CQC- registered providers to be more transparent about their fees to help people make informed decisions. The Department intends to publish the Post Implementation Review (PIR) of 2009 and 2014 regulations. Further changes to the regulations will be considered in light of the PIR. 3 Market Sustainability and Fair Cost of Care Fund 2022 to 2023: guidance - GOV.UK (www.gov.uk) Government response 15 Conclusion 13 – focus on outcomes-based commissioning Conclusion 13 - While achieving a fair price of care is vital, price should not be the driving factor in commissioning care