Agenda item

The Market Sustainability and Improvement Fund 2023/24

The report makes proposals for the allocation in 2023/24 of a Government grant for adult social care. Urgent approval of a broad approach to the use of this grant is required to comply with a grant condition requiring submission of proposals by 24 May (Appendix I)

The Market Sustainability and Improvement Fund 2023/24

Members received proposals for the allocation in 2023/24 of a Government grant for adult social care. Urgent approval of a broad approach to the use of this grant was required to comply with a grant condition requiring submission of proposals by 24 May (copy attached to the signed minutes as Appendix I)

Neil Bradley, Executive Director for Adults, Aging & Wellbeing, informed Members that additional information had come to light after production of the report that he wanted to make Cabinet aware of so they were making a decision today in full recognition of available information.  He reported that Care North East Northumberland (CNEN) which represented a number of the Care Homes operating in Northumberland was in disagreement with the County Council regarding care home fees.  A Judicial Review had been received by the Council since the papers for this Cabinet had been sent out in relation to its fee setting and its approach to the extraordinary inflation that was applicable to the sector.  The report being considered today may supersede the Judicial Review in that it recommended a 1.5% increase in fees for older persons care homes this year to recognise the additional inflation.  However, CNEN had raised further objections in relation to the report being considered by Cabinet today once they had seen it.  Those were as follows:-

•       That a disproportionate amount of the funding was being allocated to the home care market rather than the care home market. 

Mr. Bradley commented that he felt this issue was fully addressed in the report. 

•       That the CNEN should have been consulted at any earlier stage about the recommendations. 

Mr. Bradley commented that he had some sympathy for this point, however, this was due to the timescales between publication of guidelines and the limited time for submission to the DHSC of the plan for the use of the grant.  It had been made clear to CNEN previously that the officer’s view was that the key pressure was in home care rather than in care homes.  No significant points had been raised by CNEN in relation to this view other than general statements that they believed care homes were also under pressure.

•       The higher hourly rates paid to home care workers may create additional pressure on staffing within the care home sector. 

Mr. Bradley acknowledged that this was a risk, however, it was known that two years ago, a neighbouring Local Authority area raised home care worker hourly rates, but not care home worker rates and had not noted any substantial issues affecting the care home sector.  Additionally, some care homes had turned down the offer already in place to upgrade fees to enable them to pay the real living wage.  No issues were known to have been reported from the care homes that had chosen to have a differential in fees.  The risk was recognised and would be monitored.

A further point was highlighted by Mr. Bradley that there had been a fundamental difference of opinion for a number of years between the County Council and CNEN with CNEN strongly believing that there should be a mathematical calculation of fee increases via a model of the costs of running care homes.  Officers have argued that this was too simplistic and that it was necessary to look at a wider number of factors affecting the market and how the market was behaving to understand what was going on in that area.  In 2012, the Court of Appeal had backed the County Council’s position in relation to this issue.  Against this background, Mr Bradley highlighted that the proposed 1½% increase was not the result of a precise calculation but of an officer judgement which took account of the rough potential scale of the cost increase not picked up by the contract inflation formula, but also of the limited evidence that care homes had in practice been facing serious financial difficulties, and the fact that it was home care rather than care home accommodation which the service was currently unable to source. 

The Officer judgement was that the recommendations before Members struck the right balance for the use of this fund.  It was stressed that this would be reviewed if it became clear that the care home market was suffering difficulties as a result.

RESOLVED that Cabinet:

(1)    approve the proposed uses of the Market Sustainability and Improvement Fund (MSIF) in 2023/24 set out in this report, and the resulting commitments in subsequent years, which it is anticipated can be funded through the increased MSIF grant in 2024/25 and will be covered in later years either by continuation of this grant or by consolidation of the funding into the general local government financial settlement;

(2)    authorise the Executive Director – Adults, Ageing and Well-Being, in consultation with the Portfolio Holder for Adult Well-being, to make detailed decisions about the allocation of this grant, within the broad framework set out in this report, taking account of further consultations with care providers and any other relevant information which becomes available.