Agenda item

5.1  The Chair stated that the purpose of this item is to get an overview of the many national changes to Adult Social Care and how they are likely to impact on Hackney.

5.2  He welcomed to the following:

ZainabJalil (ZJ), Head of Commissioning, Business Support and Project, Adults Health and Integration Directorate

John Holden (JH), Financial Advisor, Finance and Resources Directorate

Georgina Diba (GD), Director of Adult Social Care and Operations, AHI

Helen Woodland (HW), Group Director, Adults, Health and Integration

5.3  Members gave consideration to 2 reports

Adult Social Care Reforms: Fair cost of care and market sustainability from Adult Services

Proposed reforms to adult social care (including cap of care costs) from House of Commons Library, briefing paper.  For reference.

5.4  The officers took Members through the report in detail. It was noted that the date for implementation of Fair Cost of Care had shifted as there was some uncertainty about how much finding councils will get and when and how they are required to use it.  Hackney Council is continuing with planning regardless as it needs to be prepared and to support the local market.  It was also noted that in late Nov following the new Chancellor’s Autumn Statement the funding plan had been changed and repurposed to form part of an overall ASC grant rather than being specific to supporting services with the ‘fair cost of care’ plans.  Hackney had received £948k as start towards this exercise but funding for next year and year after was currently uncertain as to how it will come and how it will be banded.  Hackney was expecting £600m next year and the year after in the fair cost of care transition but they got just £948k for now.

5.4  Members asked detailed questions and the following points were noted:

a) In response to the Chair, officers explained that this was seed funding to embed the new system.  £948k was for internal use to do this exercise and communicate and work with providers and 75% of that was to be given to providers to support uplifts within this financial year and that money would be spent by 31 March.

b) The Chair asked if it was still the intention to give 75% of £948k to providers in recognition of all the cost pressures they are under and what are the conditions given to providers.  HW explained that the entire exercise was in recognition of the fact that the market is charging self-funders more to balance out what the local authority was paying for its clients placed with them and this hasn’t changed. In addition, significant inflationary pressure on costs and increased demand means that the market is at risk of failure nationally.  Councils need to work with providers with the funding that we’ve got in preparation for when the reforms might come in.

c) The Chair asked what is the Council’s assurance that these funds, 75% of which goes to providers, means these providers might just retain the same pay scales and use it to boost profit margins or dividends and what assurances are there that the funding does get passed onto staff in pay increases or capacity building. HW replied that it depends on the council involved.  There are no national restrictions on it having to be passed on to staff.  Most local authority markets  will  have significant private provision in them. In Hackney we are unusual in that we have just one private provider and the rest are social enterprises or charities and one is an NHS Provider (the Homerton). The safeguards are within our contracts with providers and we have good relationships with them, she added. All are London Living Wage employers and we use our contract monitoring and commissioning tools to ensure that LLW is paid. 

d) ZJ explained the detailed returns on care homes and homecare services that Hackney had to complete at the request of DHSC as well as a market sustainability plan and future modelling. She explained that Hackney depends on its neighbours so close working with NEL was key. Generally Providers can’t make profits and the number of self funders in Hackney is very low. Feedback from Providers was a key part of the process.  Hackney submitted all its returns on 14 Oct, but then there was the Chancellor's Autumn Statement so they are waiting to hear back on next steps.

e) The Chair asked how much below the projections in the modelling Hackney would be and what were the implications if the ‘fair cost of care’ proposals get pushed to 2025. Officers replied that the 2023 and 2024 money has been repurposed so they have to see what happens with 2025, but so far the funding from government had failed to match the projections derived from the modelling work. 

f) JH explained that it was difficult to judge because the government was consulting on a methodology to distribute the £600m, we don’t know how much they will give councils next year and we won’t know until they restart the whole process. What is clear is that costs generated by the modelling using the toolkit are significantly in excess of the funding that was available. This has been passed to the Dept so they will be aware of the gap and should have that from all councils so would be well informed on how any such additional funding would need to be distributed.

g) The Chair asked if they had done any rough modelling on the assumption that Hackney would get the same % as with the 948k/162m and where would that leave the gap.  JH replied that they did some simple exercises on how they might distribute the funding on that exact assumption. The numbers generated were way in excess of the available funding.

h) Cllr Kennedy (Cabinet Member) commented that in his view the government was shunting items like Fair Cost of Care for two years and this was tied to the electoral cycle so that the pain would hit after the last possible date for the next general election.

i) Members asked what role families play in shaping the structure and frameworks of care home services and asked what is needed more, a new council care home or council owned intermediate care facility and which would be better. HW replied that the recent Lang Busson report had looked at the difference between original funding and what was being proposed nationally and two thirds more funding would be needed. There is a difference between what the local authorities say the market needs and the original funding proposed.  On local care homes, they do not develop care homes and have no plans to but they work very closely with the market on types and quality of care and families are involved in those discussions. The greatest challenge is that  68% of all those going into residential homes are going out of borough as we have a very small market. She cautioned that it was not helpful to compare intermediate care with long term residential care as they’ve very different issues. She explained that they have step down care which is a Housing With Care Scheme to help people coming out of hospital. In the longer term they would prefer to look at Supported Living or Extra Care Supported Housing because they want residents to live as independently as possible. What would be most helpful would be to have those level of options available for a wider range of ages and care groups.

j) The Chair asked because of fair cost of care and councils being under enormous pressure was there a financial case for in house provision as that would be cheaper or was it more complex. HW replied they won’t rule out looking at it but not from a cost perspective but from a control of nominations perspective. She added that a key local care home provider was also the Homerton.

k) Members asked how they work with other boroughs in East London considering the high proportion of out of borough provision. HW replied that ZJ is part of the NEL Commissioning Group set up to manage the market in this way.  Obviously how different councils use investment has an impact on the overall market and they wouldn’t want one borough unilaterally destabilising the market in general.  On Intermediate Care they develop a number of options as part of winter planning and have a number of beds they commission to support flow through from hospitals over the winter as well as an increase the number of step down flats they can use.  Long term capital investment and building around supported living has been put on the agenda with housing and regeneration colleagues.  It has to be part of an overall asset management development strategy and these discussions are ongoing.

l) Members asked what were the barriers in preventing the expansion of the care home and supported living market. HW replied that the key barriers were price of land and cost of building.  Hackney was small geographically but with very expensive land and the costs of development here are quite significant so if you’re a care home provider it’s cheaper to build in Havering or outer London. This doesn’t mean it is ruled out but they have to think very creatively to attract Registered Providers and development partners in the future.

m) The Chair commented on the need to work at the same pace as other councils so as not to destabilise the market and on the differential between the fees care homes receive from self funders vs from council placements.  He asked if the Fair Cost of Care funding was simply to assist moving the rates closer to parity. HW replied it was and that Hackney places a lot of people in Havering. If we all pay different amounts to providers we will merely create a competition which will escalate prices for everyone.

n) The Chair asked if there was a good understanding among the 8 local authorities that they must abide by a joint approach or are there tensions. HW replied that of course there would be some tensions but every council also has a legal duty to sustain a market. Getting the 8 to agree to an inflationary increase in rates when we don’t have certainty over the national funding picture is a big challenge. There is a strong commitment to work together however and a long term Fair Cost of Care Group exists to help us do that.

o) Members asked if a cap on spend was introduced wouldn’t self funder rates move closer to the local authority rates and provider income would therefore drop significantly and so the cap could kill the market. They asked what would happen if the market failed. HW replied that this was a key risk so how we implement any Fair Cost of Care settlement is very important.  She added that the hope is that they might be able to standardise the rates so one group is not unfairly paying more for the same quality and type of care.  The  market in general has significant challenges not necessarily helped by the cost of living crisis and inflation and more important for them is having a clear and sustainable long term funding solution for Adult Social Care. We can't give assurances to our providers as we haven't got them from  central government.  They can’t plan, we can’t plan and this instability would be best addressed by a real, genuine, long term sustainable funding solution.

p) The Chair commented that the real tension point has been postponed so the immediate crisis has abated but this does not relieve any of the existing tensions in the sector and the sector is struggling and this is exacerbated by inflation pressures. HW concurred saying they were awaiting more immediate guidance because this funding runs out in March and of course the funding just cannot stop. She concluded that she expected they might get some kind of guidance and investment settlement for next year hopefully in the December Funding Statement.

q) The Chair commented that 75% of the 948k was really just to keep the market afloat and was a one off.  If something similar doesn’t appear there is concent of a market collapse and so the system would then need another sticking plaster until more long term solutions are found.  He added that when the Group Director knows more about the financial assessment for next year it would be helpful to be kept informed so that they can keep on top of it. 

ACTION:

Group Director AHI to provide a brief update to the Chair on the funding position for next year once it is  known.

5.5  The Chair thanked the officers for their very helpful and detailed briefings and for their attendance.

RESOLVED:

That the reports and discussion be noted.