Agenda item

Cabinet Member: Adult Services

Forward Plan Ref: 2012/116

Contact: Andrew Colling, Quality & Contracts Manager Tel: (01865) 323682

Report by Director for Social & Community Services (CA10).

The Council has a statutory duty to make arrangements for persons aged 18 or over who it assesses are in need of care and attention which is not otherwise available to them.

Consequently the Council pays for approximately 1,700 older people in care homes for older people at any one time, at a cost of circa £48m per annum.

Each year we set a rate for care home fees – in Oxfordshire we have bandings representing different payments for different levels of client need.

Recently Care Home providers have mounted successful and unsuccessful challenges to the way their local authority set the fee rate. Judgements were made on:

• the consultation process;

• the Service and Community Impact Assessment;

• the assessment of the cost of care.

As a result there has been debate nationally about the ‘usual cost of care’ and the extent to which local authorities can take account of both their own resources and of market factors, such as the number of private payers (who generally pay more), when setting the rates.

There is no nationally agreed methodology for calculating the cost of care but the Association of Directors of Adult Services is developing its own model.

This paper proposes that the Banding System in Oxfordshire be simplified.

It proposes that we should

   a. Confirm the interim payment 3% already paid to care homes in 2012/13 and

   b. increase the payments for residential homes and for the lower band for nursing homes from 1st April 2013.

The cost of the proposed increases in 2013 /14 is £405,000 which will increase the pressures on the Older People pooled budget next year.

We are not offering a general inflation increase for 2013/14 in the light of the 3% increase earlier this year (cost to the council was £900k).?

Our new rates are within the range of neighbouring authorities, but remain considerably below what we routinely pay for care in Oxfordshire today.

We will be carrying out further consultation with our providers on these proposals.

Any provider who is not happy with the rate has the option of trying to challenge us through the courts if they have grounds for believing that we have acted unreasonably.

The Cabinet is RECOMMENDED that in view of the above:

(a)   for 2012/13 and for Care Home Placements in Oxfordshire to:

1.      Confirm the 3% uplift agreed as an interim payment for all existing placements in care homes from April 2012.

2.      Confirm the 3% uplift agreed as an interim payment for all new placements in care homes from April 2012.

(b)  for 2013/14 to:

·        Revise our Target banding Rates from April 2013 and

                           (i).            Delete the Residential-Substantial Target Banding Rate

                         (ii).            Increase the Target Banding rate for the Residential-Extensive Specialist Category to £452 per week for new placements.

                       (iii).            Increase all existing weekly Residential payment rates that are currently paid below £452 per week to £452 per week

                       (iv).            Delete the Nursing - Substantial Target Banding Rate

                         (v).            Increase the Nursing-Extensive Target Banding Rate to £560 per week

                       (vi).            Increase all existing weekly Nursing Extensive and Substantial rates that are currently below £560 per week to £560 per week.

                     (vii).            Retain the Nursing-Specialist Target Banding Rate at £630 per week

                   (viii).            Continue to use these rates as a guide to secure a care home placement  at a funding level as close to the Target Banding Rate as possible. 

                       (ix).            The above to apply from April 2013 and for care home placements in Oxfordshire.

(c)   to consult the care home providers in Oxfordshire on the above points (b) (i)-(ix); and

(d)  to review the Equality Impact Assessment once the outcome of the consultation is known. Fee setting is a function to which section 149 of the Equality Act 2010 applies, and the Equality Impact Assessment is the method by which the Council will have due regard to the needs set out in section 149.

At this point Cabinet agreed to vary the order of the agenda to take the next two items before the Service & Resource Planning report.

The Council has a statutory duty to make arrangements for persons aged 18 or over who it assesses are in need of care and attention which is not otherwise available to them. Consequently the Council pays for approximately 1,700 older people in care homes for older people at any one time, at a cost of circa £48m per annum. Each year we set a rate for care home fees Cabinet considered a report that proposed that the Banding System for Care Home Fees in Oxfordshire be simplified.

Councillor Jenny Hannaby, Shadow Cabinet Member for Adult Services, stated that at the last review when there had been a reduction in fees concerns had been expressed at the Scrutiny Committee about the possible impact on the quality and viability of homes and on the quality of nursing and care. She welcomed the current review and the efforts to consult providers. She noted the disappointment of officers at the lack of response to the consultation and queried whether this was either a lack of interest in what was being offered by the Council or a feeling that their views would not be taken on board. Councillor Hannaby expressed concern that Homes would top up their income from self funders. She referred to the letter from OCA that expressed the concerns she also had.

Responding to questions from Cabinet Members Councillor Hannaby clarified that she was not saying that self funders should be subsidised but rather that a business would need to cover its costs and someone would pick up the slack and that this could be the self funders. She could not confirm that the Liberal Democrat would pay more indicating that they were putting their budget proposals together.

Councillor Fatemian, introduced the contents of the report emphasising that extensive work had been undertaken to come to a robust answer. He noted that through out the country self funders pay more than local authority users. He accepted that care homes needed to make a profit and that they kept a close eye on homes; overall Oxfordshire care homes were financially healthy. He expressed disappointment that more care homes did not take part in the consultation. They did not engage and did not share data. The model used was based on the National model and he proposed the recommendation to Cabinet as the right solution for Oxfordshire.

John Jackson, Director for Social and Community Services, detailed the contents of the report. He explained that the report set out a number of factors that had been considered including the results of the consultation.  He highlighted the issues and key points set out in the report. These included:

(1) The Council had received very limited information from only 5 providers.  As a result there is  not sufficient information to justify the significant increase that providers are seeking. 

(2) The County Council’s service and resource planning process had identified that there are significant pressures on the older people’s budget. As a result there is a need to focus resources for the benefit of an increasing number of vulnerable people.  Increasing our spending on care home services goes against our stated business strategy for the future. 

(3) A legal case last year suggested that local councils could take into account the availability of resources when determining the outcome of a price review and given the financial pressures that the Council faces and will face in the future it is believed that increasing spending in this service area for 2012/13 beyond the increased expenditure this year is unsustainable.

(4) However these are clearly challenging times for both providers and purchasers and it is important to the council to make sure that there is a sufficient provision to meet existing and increased future service demands. 

(5) Two possible models have been considered but whatever cost model is used the resulting figure generated is only an aid to discussion. This is why there are discussions with providers for each placement to agree the precise figure that will be paid.

(6) Of the two models on balance the ADASS model is preferable as it offers a cost of capital that reflects the council’s market view of no growth. The council has used the ADASS model with a £6.70 hourly rate to arrive at a weekly residential cost of £452. The Funded Nursing Care element is then applied to arrive at a Nursing Rate of £560.  These are the banding rates included in the recommendations.

(7) The Service and Community Impact Assessment explained how the impact of any decision to increase care home fees was the least worst option because the impact of making savings elsewhere would have a more detrimental impact on the protected groups.

John Jackson referred to a letter sent by Mr George Tuthill, Chairman, Oxfordshire Carehomes Association to members of the Cabinet. He commented that Mr Tuthill referred to the amount that the Council pay to the Orders of St. John.  Officers did not believe that this was comparable information.  The Oxfordshire Care Partnership took over the responsibility of the former County Council homes knowing that very significant capital investment would be required to bring these homes up to an acceptable standard.  This is reflected in the bed price that is paid. 

The Service and Community Impact Assessment explains how the impact of any decision to increase care home fees is the least worst option because the impact of making savings elsewhere would have a more detrimental impact on the protected groups.

RESOLVED:            that in view of the information considered:

(a)               for 2012/13 and for Care Home Placements in Oxfordshire to:

1.                  Confirm the 3% uplift agreed as an interim payment for all existing placements in care homes from April 2012.

2.                  Confirm the 3% uplift agreed as an interim payment for all new placements in care homes from April 2012.

(b)               for 2013/14 to:

·                    Revise our Target banding Rates from April 2013 and

                           (i).            Delete the Residential-Substantial Target Banding Rate

                         (ii).            Increase the Target Banding rate for the Residential-Extensive Specialist Category to £452 per week for new placements.

                       (iii).            Increase all existing weekly Residential payment rates that are currently paid below £452 per week to £452 per week

                        (iv).            Delete the Nursing - Substantial Target Banding Rate

                          (v).            Increase the Nursing-Extensive Target Banding Rate to £560 per week

                        (vi).            Increase all existing weekly Nursing Extensive and Substantial rates that are currently below £560 per week to £560 per week.

                      (vii).            Retain the Nursing-Specialist Target Banding Rate at £630 per week

                    (viii).            Continue to use these rates as a guide to secure a care home placement  at a funding level as close to the Target Banding Rate as possible. 

                        (ix).            The above to apply from April 2013 and for care home placements in Oxfordshire.

(c)               to consult the care home providers in Oxfordshire on the above points (b) (i)-(ix); and

(d)               to review the Equality Impact Assessment once the outcome of the consultation is known. Fee setting is a function to which section 149 of the Equality Act 2010 applies, and the Equality Impact Assessment is the method by which the Council will have due regard to the needs set out in section 149.