Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Profiteering risk in social care considered low due to falling profits and commissioning.
Recommendation
We asked about the risk of profiteering and how the Department was ensuring that the money it was putting into the system was going to the right places. The Department explained that was mainly down to the quality of commissioning and that, as CQC was now inspecting local authority commissioning, it would be getting an overview of how good that commissioning is. DLUHC told us that local authorities were responsible for ensuring that their local markets are working functionally and that they can continue to commission care. The Department pointed out that, as shown in the NAO’s report, provider profits were falling, and said it did not therefore consider there to be a particular risk of providers “creaming off profits”. It said that profits in social care were to be made more on the self-funder side than on local government funded care.24
Government Response Summary
The government states the recommendation is implemented, referring to £8.6 billion in funding and describing ongoing measures to ensure money goes to the right places and prevent profiteering. These include significant assurance processes for new grant funding, requiring detailed spending plans, and ongoing engagement with CQC to monitor provider profit margins.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 Since Spending Review 2021, the government has made available up to £8.6 billion in additional funding over 2023-24 and 2024-25 for adult social care and discharge. This funding has directly supported an 8.9% average increase in fee rates paid to providers in 2023-24 (which is greater than inflationary pressures), and a 10% increase in the number of supported discharges for patients assessed as no longer meeting the criteria to reside from February 2023 to February 2024. As the most recent State of Care Report shows, data from the CQC Market Oversight scheme indicates that provider profit margins are generally low on average, and we continue to engage CQC to understand whether funding uplifts result in any change in margins. 2.3 The department is undertaking significant assurance of new grant funding, requiring local authorities to report on performance against priorities, and requiring local authorities and ICBs to submit detailed spending plans for their discharge funding for 2023-24 and 2024-25. 2.4 The department works alongside the Department for Levelling Up, Housing and Communities to provide scrutiny and assurance of funding, as well as ensuring transparency to support local accountability. This includes the recent introduction of the Office for Local Government, assurance by the CQC, and reforms to the collection and availability of data on social care activity.