Cabinet Member for Adult Social Care and Health Care Homes & Care Services: Usual Maximum Rates, Fees & Charges for Adult Social Care March 2016

Ref: ASCH13 15.16 Key Decision: Yes

Part I Report by Executive Director of Care, Wellbeing & Education

Electoral Divisions: N/A

Executive Summary Annually a Cabinet Member decision is taken on fees paid to independent providers of adults’ social care, based in West Sussex. A key focus of the decision is the usual maximum rates paid to care homes and care homes with nursing within West Sussex. This year the decision also takes account of the impact of the National Living Wage (NLW), which comes into effect from April 2016, on providers of care in West Sussex. To inform usual maximum rates, providers of care homes and care homes with nursing were invited to participate in cost modelling work, to set the baseline against which the future fee, and any increases may be set and to inform the impact of the NLW. This decision will set the basis for the fee strategy for the 3 years starting April 2016. Since April 2015 The Care Act has created a new statutory duty on local authorities to facilitate their local care market and ensure sufficiency of supply, which brings an even greater focus to setting rates that support a sustainable infrastructure. This report sets out the outcome of the cost modelling work, the approach and the factors considered in setting fee levels. In addition this report sets out the schedule of fees, outside the scope of the model; for which a separate survey was run to understand the potential impact of the NLW in West Sussex. Consideration is also given to the knock-on implications of the recommendations for the fees that the County Council charges when a third party makes a placement in one of its residential homes for adults with learning disability and resource centres for older people. There are proposals for specific increases in a range of fees and rates where the modelling suggests that this is warranted. The report explains these differences. There is also a proposal that there is no increase in the Resource Allocation System (payments to personal budgets). The Cabinet Member is recommended to approve: 1. That for services for the year 2016/17 the proposals detailed at paragraph 3 and

Appendix 2 of this report shall apply to fees and charges for care funded by WSCC Adults’ Services, from 11th April 2016.

2. That there should be no increase in the Resource Allocation System as detailed at paragraph 3.12

3. That the rates of charges for placements made by third parties in the County Council’s residential and resource centre services as detailed in paragraph 3 be increased as set out in Appendix 3.

1. Background and Context 1.1 Annually rates and fees paid in respect of social care provision in the

community and in residential and nursing provision are subject to review.

1.2 This year’s approach is different from previous years as it also considers the impact of the National Living Wage (NLW), from April 2016, and the likely impact on providers of adult social care.

1.3 In 2013/14 an integrated approach was adopted for increases in residential, nursing and community based services as part of a 3 year fee strategy, the decision taken in 2015/16 was the final year. The rationale for the approach underpinned a more proactive approach to managing and developing the market for care services in line with commissioning intentions. The only exception to this approach is Shaw Healthcare Homes, where rates of increase are subject to an indexation formula specified in the contract, and are therefore outside of this decision.

1.3.1 2013/14 saw the introduction of a cost model which set the basis for the 3 year fees strategy for usual maximum rates, with a proposal to review the methodology (by working with providers) for usual maximum rates paid from 11 April 2016.

1.3.2 The proposals for usual maximum rates are based on completed cost surveys submitted by providers of these services in West Sussex, analysed by PA Consulting (who were appointed in December 2015) through the use of their cost benchmarking model, the same model approach was also used in 2013.

1.3.3 Usual maximum rate proposals are based on data within the model but also take into account the impact of the NLW, commissioning intentions, inflation indices and known factors of supply and demand in West Sussex.

1.4 Individually agreed rates are negotiated outside the scope of the model. The lead commissioner, for each requisite care group, has supported on defining the approach and resulting proposal.

1.5 Rates paid in respect of community based services such as supported living are reviewed in line with their respective contracts and, as with agreed rates, the lead commissioner for the care group has defined the approach, researched and reached a proposal.

1.6 Consideration in reviewing all rates and the subsequent recommendations takes into account the impact of the NLW evidenced through completed surveys from providers, supply and demand, commissioning intentions and the provider perspective.

1.7 Rates for domiciliary care under the 2009 Framework have been reviewed taking account of NLW and inflationary indices as appropriate.

1.8 Rates for domiciliary care under the 2015 Framework have been reviewed

taking account of NLW. 1.9 In relation to specialist residential centres managed directly by the County

Council, namely New Tyne and Marjorie Cobby House Resource Centres, an

aligned approach is proposed which will take account of the NLW together with the County Council’s inflation strategy. This will also be applied to the 5 learning disability homes which WSCC operate.

2. Consultation 2.1 An independent consultant was commissioned to lead the costing exercise,

with their role being to determine the approach to gather costing information in West Sussex, analyse the data by the use of an appropriate tool to take into account relevant costs, allow a return on capital and profit, and consider relevant impacts on costs. PA Consulting undertook the modelling in 2013 and demonstrated the benefits of engaging their services again.

2.1.1 An email communication was issued to care home and care home with

nursing services on 22 December 2015 (followed up on 6th January 2016) advising PA Consulting Group would undertake a benchmarking exercise encompassing residential and nursing care homes in the County for those who provide services for Older People, people with Dementia and people requiring Nursing Care.

2.1.2 The purpose of the exercise was to support adult social care commissioners

in setting sustainable rates for care homes. In addition the exercise would take a forward look, beyond April 2016, to support WSCC to understand the impact of the NLW for the year 2016/17 to inform its approach to cost modelling. In order to optimise the results a participative approach was required.

2.1.3 Providers were invited to attend meetings on 8th January in Worthing or

Horsham. 2.1.4 A total of 277 residential and nursing homes, based in West Sussex, (257 for

Older People, Dementia, Nursing and 20 for Mental Health Care) were invited to participate in the cost bench marking exercise.

2.2 Completed, returned cost surveys represented in excess of 25% of beds in the market from 53 homes.

2.2.1 The information from the cost surveys was divided into Operational: staffing

and hotel costs; Property: Rental value or value if sold; Assets; Costs >0.5% p.a. excluded elsewhere, information on the “funding source” i.e. Local Authority, Health or Private and questions to pull out information on being compliant with NLW and maintaining differentials within an organisation and/or against competitors.

2.2.2 Unlike activity based costing models such as Laing & Buisson, where costs

are apportioned in a predetermined manner, the PA model benchmarks across all submissions and allows the commissioner to determine the profit level, target occupancy and the percentile at which the benchmark should be set to reach a true cost for the area.

2.2.3 Return on Capital (R.O.C.) investment has been a point of contention

between some Local Authorities (LAs) and providers with regard to the level to which this should be set. The WSCC model has maintained its position

allowing 7% on R.O.C. i.e. against the value on the property investment. Laing & Buisson have recently reduced the figure for R.O.C. in its model. There is a separate element for profit which has been linked to commissioning intentions i.e. where there is a need to stimulate growth in an area, such as dementia. This has been set between 10 and 12%.

2.2.4 The approach built the rates directly from the information submitted by

providers, therefore this year the rate has been arrived at then expressed as a percentage increase on the previous years’(rather than agreeing a percentage increase first).

2.3 The cost benchmark survey clearly evidenced a significant rise for rates to

dementia services and for particular areas of the county. This is supported by the West Sussex Joint Strategic Needs Assessment (JSNA), national research, demographic profiling and trends in placement costs, particularly over the last 12 months.

2.4 From April 2016 the NLW will pay workers aged 25 and over £7.20, an increase from the current National Minimum Wage of £6.70. To understand the impact on social care, research and analysis work was also commissioned from PA Consulting to evaluate the impact of the NLW on all other parts of the care market, such as domiciliary care, on a market segment basis. As with care homes, the requirement was to establish the cost of: i. simple wage compliance ii. maintaining pay differentials

2.5 To evaluate the impact of the NLW on all other segments of the care market

including domiciliary care a parallel survey was run. Over 400 providers across Adults’ and Children’s services were invited to participate with 43 responses being submitted, the majority of which were from domiciliary care providers. An independent follow up was undertaken by West Sussex Partners in Care (WSPinC) asking why providers may not have engaged. A number indicated that they are planning to withdraw or are actively withdrawing services from WSCC, more reassuring some businesses indicated they were already paying above what will be the NLW.

2.5.1 38 providers submitted an answer to the question “What, in your opinion, will

be the likely impact on your business and on the care market in general of the introduction of the NLW?” The 2 key points were: • Staff recruitment & retention – existing low pay problem in sector will be

exacerbated • Pay Differentials – existing pay differentials (whether for business or

premium work reasons need maintaining) 2.5.2 As with the care homes surveys the NLW responses from the other segments

of the market demonstrated that there were a range of pay rates and varying hourly rates under contract or charged to contracts.

3 Proposals 3.1 The County Council’s budget strategy for 2016/17 allows an inflation uplift of

0.8% for care purchased from independent providers as per the Retail Price Index in September 2015. Separately to this, provision has been made for the impact of the NLW. Between these two sources, funding of £7m is available within the Adults’ Social Care and Health portfolio for the proposals which are subject of this report. In effect this has created an uplift envelope for which a distribution is proposed that has been informed by an assessment of conditions in the different markets in which care is being purchased. This allows a minimum increase to be recommended for all providers whilst directing additional resources to those parts of the market where the County Council is facing greatest supply constraints.

3.2 The recommendations for fees and rates for 2016/17 fall into structural

changes to usual maximum rates; removal of 2 payment Bands; and a range of increases to apply from11 April 2016, as follows: (a) a move from a single usual maximum rate to standard and enhanced rates;(b) discontinue Band B for new placements; (c)discontinue Band F Mental Health for new placements (d) discontinue the use of the Market Supplement and Geographical Enhancement (e) increase by 2 %; (f) increase by 2.36%; and (g) increase by 3.19% (h) increase by 3.5%; (i)increase by more than 3.5%; (j) no change.

3.3 Move from single rate for usual maximum to standard and enhanced.

The returns from the survey (corroborated through direct experience when commissioning) showed a marked difference in the cost of service delivery across the county, with a differentiation, in the main, between the Coastal Area of West Sussex and some of the Northern areas of the county. The proposed change is to have a standard rate and an enhanced rate.

3.3.1 The standard rate:

Towns within the Western and Southern Adults’ social care areas, as shown at Appendix 1, will be paid at standard rate with the exception of those listed under Midhurst, Pulborough and Billingshurst in the West Sussex Care Guide.

3.3.2 The enhanced rate: Towns within the Northern Adults’ social care area of West Sussex and those care homes listed under Midhurst, Pulborough and Billingshurst in the West Sussex Care Guide will be paid at the enhanced rate.

3.4 Discontinue the use of Band B residential placements for new

placements, with 2.36% increase to rate for existing customers. 3.4.1 Band B, high level of physical care needs residential placements, currently

has 47 placements. This number has reduced significantly since the original fee structure was set (over 15 years ago); and has decreased by 40% since 2015.

3.4.2 Those customers in pay will remain on Band B, unless there is a change in assessed needs. The County Council would not want to encourage additional

investment in this type of provision and therefore is awarding an increase to meet the cost of NLW and inflation of 2.36%.

3.5 Discontinue the use of Band F Mental Health 3.5.1 Mental Health Commissioners propose no new purchases to be made under

usual maximum rate Band F after 1 April 2016. Those customers in pay will remain on Band F, with a 2.36% increase, unless there is a change in assessed needs.

3.5.2 The rationale for this is the change in need of customers requiring support

with mental health in residential care. Over the last two years no placements have been made at Band F due to assessed needs requiring a higher fee. Mental Health placements are now commissioned to provide a recovery focussed service based on a customer’s individual needs, therefore placements will be considered on an individually agreed rate basis.

3.5.3 Any future uplifts for customers placed on the historic Band F rate will be considered in line with the Council’s annual review of rates and charges. Any change to customer’s needs will be assessed and reviewed on an individual basis and costed accordingly. The County Council would not want to encourage additional investment in this type of provision and therefore is awarding an increase to meet the cost of NLW and inflation of 2.36%.

3.6 Delete the Market Supplement and Geographical Enhancement

The Market Supplement (£10 per week) and Geographical Enhancement (£20 per week) will now be deleted as a result of the new enhanced rate. The cost modelling work has highlighted that these were ineffective in recognising the particular cost pressures that exist for providers operating in those areas where the enhanced rate will be payable.

3.7 Increase of 2% 3.7.1 Shared Lives

These services are both commissioned from independent shared lives providers and directly provided by the Council. From a commissioning perspective, and for the customers who are supported, these services are truly valued to provide short and long term accommodation in family based accommodation to vulnerable people, to support them and in many cases provide respite care to support their family. As with agreed rates the increase is to facilitate an increase to wages, whilst acknowledging that existing hourly rates mean that the NLW will have less of an impact than for other care types.

3.7.2 Day care provision for Learning Disability

A procurement was run and contracts awarded during 2015/16. The proposal is to increase by 2%.

3.8 Increase of 2.36% 3.8.1 Band A.

This band was deleted in 14/15, however there are 2 placements currently on this rate. An increase to cover NLW and cost of living is proposed.

3.8.2 Usual maximum rates Standard Rate Band P (high/intense Physical Support),

Standard Rate Band D (Nursing

Band P (high/intense Physical Support) and Band D (Nursing) have the majority of placements. In response to the survey it was evidenced that there would be some increase required in all areas of the county, however in the main the “coastal” area of West Sussex required a lower increase to cover NLW and inflation pressures. The returns for nursing for Coastal indicated that current WSCC rates are higher than might have been expected however given the complexity of the customers, the need to underpin stability, particularly recruitment of nurses, strengthen and encourage investment and growth in this market the proposal is to increase the baseline for Band D in line with Band P.

3.8.2.1 To set usual maximum rates the following was taken into consideration: 3.8.2.2 the profit level, which is set between 10 and 12%; 3.8.2.3 the occupancy target. Occupancy (in dementia services, particularly and

nursing services) is quite high, therefore the target occupancy has been increased for these services;

3.8.2.4 the increasing number of people the local authority funds. This requires us to consider the impact of what is paid to ensure the rate allows a business to run efficiently based on local authority funding levels.

3.8.2.5 0.8% increase to reflect inflationary cost pressures on the business. There are huge difficulties in recruiting and retaining staff in the care industry together with real difficulties in recruiting nursing staff into the sector. West Sussex’s JSNA has predicted a decrease in working age population pitched against an increasing older population; therefore the County Council must consider how it can support providers to encourage workers into and to remain in the industry to maintain safe levels of care.

3.8.2.6 The impact of NLW from April.

3.8.3 Individually Agreed Rates for Residential and Nursing Placements across all

customer groups; LD; MH. PD, ABI and LD Residential Colleges.

These rates are agreed on an individual customer’s needs, often by applying the regional care funding calculator, reviewing the needs of the individual against the level of resource required to meet their needs. The market segment comprised of services the County Council commissions at individually agreed rates are relatively stable compared with others. As a responsible commissioner of services, the importance of paying rates that allows a provider to pay staff an increase in pay is recognised and respected, and it is anticipated that providers will apply the increase to careworkers’ wages.

3.8.3.1 Individually agreed rates for the following Primary Support Reasons will fall

into this increase group: Learning Disability; Mental Health; Physical Sensory; and individually agreed rates for residential and nursing care where individuals needs exceed usual maximum rates.

To be equitable across all customer groups the same increase is to be applied to individually agreed rates for all customer groups, namely physical support, learning disability, mental health and substance misuse, physical disability, acquired brain injury, learning disability.

3.8.4 Specialist residential/day centres managed directly by the County Council.

These services are the New Tyne and Marjorie Cobby House Resource Centres plus the 5 learning disabilities homes; a decision needs to be taken about the charges that will apply for self-funders and placements made by other local authorities. The County Council is recommending that the placement charges increase by 2.36%. The increase is mainly a hypothetical one because it is unusual for placements of this type to be made. The new rates are shown in Appendix 3.

3.9 Increase of 3.19% 3.9.1 2015 Care and Support at Home Framework

Providers delivering care and support at home services under the 2015 Framework Agreement have established rates submitted as part of their tender response. Under this agreement, the Council has committed to the principle of paying an inflationary uplift taking account of the Council’s finances; and the Consumer Price and the Average Weekly Earnings indices referenced KA5H by the Office for National Statistics. Submission and acceptance of framework rates preceded the announcement of the NLW, consequently the rates have not accounted for the impact. As the anniversary of the framework has not yet been reached the recommendation is that the rates are increased only to reflect the impact of the NLW. This will be reflected by a 3.19% increase to current 2015 framework rates.

3.9.2 The NLW will impact on the KA5H information during 2016. It is recognised

that paying an increase for NLW in advance of the anniversary of the contract, in line with the commencement of the NLW, will need to be taken into account when reviewing future increases with an appropriate adjustment being made to related indices.

3.10 Increase of 3.5% 3.10.1Supported Living Framework for Learning Disability.

These services support individuals with a learning disability to lead a life that is as independent and integrated with the local community as possible. Commissioners continue to explore how this type of service may be extended to other primary support reasons. Supported Living Services Schemes are largely unregistered, however the support delivered to the customers living in these services is delivered by Service Providers who are registered with CQC, as such the commonality of the service make up to care and support at home is recognised. Given the focus on ensuring a reasonable hourly rate is paid to cover the cost of running the business, which takes account of the cost of sleep-ins, travel, training and paying at least the NLW, an award of 3.5% to current rates is recommended.

3.11 Increases above 3.5%

3.11.12009 Domiciliary Care Framework

A new Care and Support at Home Framework was implemented in August 2015 following procurement in the Spring of 2015. The framework is in its infancy, and as a result, whilst all new customers are referred through the 2015 framework some customers continue to be supported under the 2009 Domiciliary Care Framework Agreement. The rates for the 2009 framework have not increased in the same way as the 2015 framework. In 2015/16 a 2% one off payment was agreed in support of the transition to the new framework. For 2016/17 the recommendation is that the 2% one-off transitional payment ceases on the 9th April 2016 and is replaced by an evidence-based rate increase to 2009 framework rates. The increase takes into account the effect of inflation as well reflects the changes in CPI and KA5H indices for a full year and also takes account of the NLW, as recommended for the 2015 framework. The recommendation is to increase the 2009 Framework by 5% on current rates and remove the one-off transitional payment.

3.11.2Usual maximum standard rate for Band C Dementia When the cost modelling was undertaken 3 years ago the survey evidenced a significant increase was needed to meet the costs of services for dementia, this was also the case this time. More people are living with dementia in West Sussex, between 2012 and 2037 the number of people with dementia is predicted to increase from 13,000 to 27,000. To encourage appropriate investment in these services an award of 7.92%.

3.11.3Usual maximum enhanced rates

3.11.3.1 Undertaking the cost modelling survey, corroborated by practitioners experience through micro commissioning placements and the strategic market oversight intelligence it is well evidenced that the cost of running services in certain localities, particularly those in the Northern area of the county, is higher than those in the other localities. The impact of an increased retail presence, the draw of Gatwick and proximity of London and other counties places increased pressure on the Northern localities of the County. In addition WSCC needs to pay at a level that will enable it to retain its market share. The enhanced rate will apply to care homes and care homes with nursing within the Adults’ Services Northern area and Northern Chichester (i.e. those homes listed in the West Sussex Care Guide under Petworth, Pulborough and Billingshurst.)

3.11.3.2 Usual maximum enhanced rate for Band D Nursing Where individuals have eligible social care needs that are greater than their nursing care needs local authorities pay a baseline social care rate for placements into care homes with the nursing element being covered by the Department of Health’s Funded Nursing Care (which is currently under

review). To support providers delivering nursing care to meet the cost of the NLW, attract and retain competent staff the survey supports an increase of 8.19%.

3.11.3.3 Usual maximum enhanced rate for Band C Dementia

As set out above in 3.10.3.1 the cost modelling supported by trends in placement costs evidences the need to increase the rate paid by WSCC for dementia placements. The proposed enhanced rate for dementia is an increase of 18.02%

3.11.3.4 Usual maximum enhanced rate for Band P intensive/complex physical care needs

WSCC has over 470 placements (across the county) at any one time. With life expectancy increasing the need to have sufficient supply of care home beds for WSCC, and the wider population, to commission is essential, with placements that support frailty with intensive/complex being critical.

With 13% inward migration in to West Sussex based homes, the market

needs to be encouraged to invest in supply and WSCC needs to ensure its attractiveness as a purchaser, particularly against those funding their own care. The response to the survey evidenced an increase to the level of 19.25%.

3.11.3.5 Sleep-in – Learning Disability

Providers delivering sleep-ins need to ensure that they pay staff at a level that ensures their total hours worked day and night, are paid at a level that meets statutory compliance. The issue has been particularly identified within Supported Living Schemes for Learning Disability, where sleeps in arrangements are more commonly used to support. Given that NLW will apply to all hours staff are required to be available to work, average remuneration across the working week will need to comply with NLW which will have a disproportionate impact of implementation of NLW. To enable providers to be compliant with the NLW across day and night hours a maximum increase of 40% based on an increase from the ceiling rate of £46.42 per night to a maximum of £65 per night.

3.12 No increase 3.12.1Resource Allocation System (RAS)

The RAS mechanism is used to calculate personal budgets. Some may be taken by customers in the form of a direct payment with the remainder being council-managed.

There will be no change to the pounds to points resource allocation, consequently no automatic change to the amount of money within customer’s personal budget.

3.12.1.2 Although the unit cost of (some of) the expenditure that customers will need to manage within their budgets will be increasing, no automatic change is proposed to the monetary value of the RAS. In part this is because a wide

range of items are bought using personal budgets, so customers will be benefiting from the low inflation environment within the wider economy. In part too it is a reflection that many people do not spend their budgets in full, which suggests that there is some in-built capacity to absorb marginal levels of price increase. A significant proportion of domiciliary care providers also charge direct payments customers at private-funder rates, which ought to make the NLW less of a factor in these situations than where care is being purchased by the County Council.

3.12.1.3 However to recognise that some customers may be unable to meet their care

needs within their budget a sum equivalent to 3.5 % has been set aside as local allocations for operational staff to draw from following reassessment, where appropriate. This will make for better use of resources than applying a uniform uplift, whilst earmarking funding to mitigate the risk that customers with personal budgets will be disadvantaged as a result of the NLW.

3.12.2Direct Payments.

No increase in line with the recommendation for the Resource Allocation System, however, customers Direct Payments will be reviewed as part of the annual review process.

3.12.3A sum equivalent to 3.5 % has been set aside as local allocations for

operational staff to draw from following reassessment. 3.12.4Personal budgets will be reviewed following reassessment, refer to para

3.11.1.3. 3.12.5The Supported Living Framework for Mental Health

No increase is proposed, as following a recent procurement, from 1st April 2016 a new maximum ceiling hourly rate of £16.00 will be applied which took account of the NLW.

3.13 Summary of Proposals

It is therefore proposed that for services for the year 2016/17 the following shall apply to fees and charges for care funded by WSCC for Adults’ Services from 11th April 2016:

2% increase to:

• Learning Disability Day care • Learning Disability Shared Lives

2.36% increase

• Band A residential placements 2.36% increase giving a rate of

£286.46 • Band B residential placements, 2.36% increase giving a rate of

£379.15 • Band D (social care element) of nursing placements at standard rate,

2.36% increase to placements to pay a rate of £504.81.

• Band P (frail with intensive/complex physical care needs) residential placements at standard rates, 2.36% increase to placements to pay a rate of £473.14.

• Band F (Mental Health all ages), 2.36% increase to placements to pay a rate of £365.19

• Learning Disability individually agreed rates for residential and nursing care

• Learning Disability individually agreed rates for residential colleges • Mental Health individually agreed rates for residential care and nursing

care • Substance Misuse individually agreed rates for residential care and

nursing care. • Physical Disability individually agreed rates for residential care and

nursing care. • Individually agreed rates for residential and nursing care where

individuals needs exceed usual maximum rates

3.19% increase • Care and Support at Home Framework, 3.19% increase

3.5% increase • Supported Living Framework for Learning Disability, 3.5% increase • A 3.5% increase to non-residential locally held budgets for Council

Managed Budgets. • A 3.5% increase to non-residential locally budgets for Direct Payments

Increases above 3.5%

• 2009 Domiciliary Care Framework, an increase of 5% • Band C Dementia Standard Rate, an increase of 7.92% to £530. • Band D (social care element) of nursing placements at Enhanced Rate,

8.19% increase to placements to pay a rate of £566. • Band C Dementia Enhanced Rate, increase by 18.02% to pay a rate of

£615. • Band P (frail with intensive/complex physical care needs) residential

placements at Enhanced Rate, 19.25% increase to placements to pay a rate of £587.

• Sleep-ins. An increase of up to 40% to cover the cost of sleep-ins.

No change to: • The Resource Allocation System • Direct Payments.

Introduction of a new maximum rates structure into: • Standard rate • Enhanced rate

Removal of:

• Band B, usual maximum rate for high level of physical care needs • Band F, usual maximum rate for all age mental health • Geographical enhancement • Market supplement

4. Other Options Considered

4.1 All increases took into account the likely impact of the NLW, one option that

was considered was to pay an amount to be legally compliant only, particularly given the low increase of the inflation indices, however this was not felt to be sustainable within the market.

5. Resource Implications and Value for Money 5.1.1 In gross terms, the County Council is budgeting to spend around £180m in

2016/17 on the care costs which are subject of this report. 5.1.2 Quantifying the impact of the recommendations is not a precise science,

mainly as the group of people receiving social care is subject to a significant level of turnover each year. Of itself this can lead to changes in the relative mix of spending as well as differences in the means-assessed contributions that customers make towards the cost of their care. Nevertheless, if the proposed rates shown in paragraph 3.12 are applied to current customer numbers, the aggregate additional cost of the recommendations, based on payment from 11th April, will be in the order of £7.24m. This is around £0.2m more than the additional funding which has been allocated to the Adult Social Care and Health portfolio as a result of County Council’s budget strategy for 2016/17. Rather than diluting any of the uplift proposals, that excess will be managed within the wider portfolio, including from close monitoring of the provisional allocations that will be set aside for personal budgets.

5.1.3 The only category where different considerations apply is for Mental Health

clients. This is because the increases proposed for Band F will fall to the Mental Health pooled budget. As such roughly 87% of the cost of that change will be funded by the three clinical commissioning groups in West Sussex. The Mental Health pooled budget manager has confirmed that this will be affordable within the limits of the available provision.

6. Impact of the proposal

6.1 Equality Duty

An Equality Impact Report has been undertaken and is attached at Appendix 4.

6.2 Crime and Disorder Act Implications

No implications.

6.3 Human Rights Act Implications In reaching a decision on the level of fees, the Authority has considered its duties under the Human Rights Act, and in particular Article 8, and the need to consider the private and home life interests of all those assessed to be in need of residential and other basic care. The Authority has endeavoured to find out the cost of care in order to ensure that any increase enables these needs to be met.

6.4 Social Value The proposal supports the sustainability of the care market in West Sussex

by supporting providers to meet their statutory duties in relation to the NLW and the maintenance of wage differentials between staff groups.

This potentially will support an increase in jobs in the care market across

West Sussex by enabling providers to pay more attractive pay rates to staff. The increase in usual maximum rates should encourage more providers to

support WSCC funded customers and also encourage new investors into West Sussex.

Care businesses supporting WSCC funded customers will be underpinned by

an evidenced based increase in rates, with a marked increase in usual maximum rates in localities currently unable to accept usual maximum rates.

7. Risk Management Implications 7.1 The model reduces the risk of legal challenge as WSCC has adopted a robust

process where the eventual fee rates can be shown to be based on a proper and evidenced based assessment of the actual cost of care.

7.2 A financial risk that the costs will exceed the allocated budget through

activity shifts, is referenced in paragraph 5 above. 7.3 As fees paid in respect of care provision is a national, high profile issue, a

robust approach to cost modelling was required to mitigate any reputational risk.

7.4 Frameworki requires updating with all the new rates and subsequent testing

to ensure payments to providers are correct. Based on a March decision, at this time it is uncertain when the changes will be implemented in Frameworki, particularly given the upgrade to the Mosaic system. Following this decision The Portfolio Manager for Frameworki and the Systems Support Manager will review the required work and advise of the earliest date the changes can be implemented, which will be communicated to providers. Every effort will be made to ensure that the increases are paid as near as possible to 11th April. If this is not achievable, all payments will be backdated to then.

7.5 The County Council is experiencing increasing difficulties in securing

placements at its usual maximum rates, particularly in the Northern localities of the County. This is a reflection of market pressures, where a combination of loss of capacity and growing demand is exerting an upwards influence on prices. The proposals in this report with the introduction of enhanced rates attempt to acknowledge that position.

Avril Wilson Mark Howell

Executive Director, Care, Health and Well-being Director Adult Operations

Contact: Debbie Young 0330 22 24134

Appendix 1: Adults’ Social Care Areas for Enhanced and Standard Rates Appendix 2: Fee Schedule Proposed Fee Rates for 2016-17

Appendix 3: Schedule of Charges for Adults’ Services Resource Centres Appendix 4: Equality Impact Report

Background Papers None

Appendix 1 Northern Area and highlighted towns in Western = Enhanced Rates Southern & Western Areas (exc. highlighted towns) = Standard Rates

Appendix 2 FEE SCHEDULE

PROPOSED FEE RATES FOR 2016-17 CARE HOME RATES

ADULTS' SERVICES USUAL MAXIMUM RATES FOR PERSONAL AND NURSING CARE IN REGISTERED CARE HOMES (ALL AGE GROUPS)

CARE HOMES REGISTERED WITH THE CARE QUALITY COMMISSION TO PROVIDE PERSONAL CARE

2015-16 from 06/04/15 Weekly Rate £

2016-17 from 11/04/16 Weekly Rate £

Band A - Older Person: High level of Personal Care

DELETED

DELETED

Band B – High level of physical care needs 370.40

DISCONTINUED 379.15 (in pay)

Band C - Specialist dementia care (intensive/complex)

491.11

Standard 530.00

Enhanced 615.00

Band P - Frail with intensive/complex physical care needs

462.23

Standard 473.14

Enhanced 587.00

Band F - Person with mental health needs 356.76

DISCONTINUED 365.19 (in pay)

CARE HOMES REGISTERED WITH THE CARE QUALITY COMMISSION TO PROVIDE NURSING CARE Baseline Social Care Rate (Accommodation and Personal Care element of Nursing Fee)

493.17

Standard

504.81

Enhanced 566.00

Plus the NHS Contribution to Nursing Care: (W.E.F. 1 April 2015) 2015 figure used for illustrative purposes only the 2016/17 rates for FNC are yet to be confirmed by the DoH. Band - Standard (£112.00)

605.17 Standard 616.81

Enhanced 678.00

Band - High (£154.14 ) 647.31 Standard 658.95 Enhanced 720.14

For homes in West Sussex nursing care is paid gross through WSCC, with reimbursement from the CCG.

N.B. Prices stated are gross.

Substance Misuse, Learning Disability, Mental Health, Physical Disability and where need exceeds usual maximum rates are agreed on an individual basis.

Enhanced rates are paid for homes within the Adults’ Services Northern area and Northern Chichester (i.e. those homes listed in the West Sussex Care Guide under Petworth, Pulborough and Billingshurst)

Appendix 3

SCHEDULE OF CHARGES FOR ADULTS’ SERVICES RESOURCE CENTRES (Marjorie Cobby House & New Tyne Resource Centre)

All rates per

amounts 2015-16

WSCC Weekly Rate

£

2016-17 WSCC Weekly

Rate £

Percentage Increase

Adults’ Services Resource Centres (Self-funded/ externally-funded places)

657.24 672.75 2.36%

SCHEDULE OF CHARGES FOR RESIDENTIAL CARE HOMES FOR PEOPLE WITH A LEARNING DISABILITY

All rates per amounts per

week

2015-16 from 06/04/15

WSCC Weekly Rate

£

2016-17 from 11/04/16

WSCC Weekly Rate

£

Percentage Increase

Standard Support 841.00 860.85 2.36%

Higher Support 1,176.27 1204.03 2.36%

Intensive Support 1,730.38 1771.22 2.36%

Appendix 4

Equality Impact Report

Title of proposal Care Homes & Care Services: Usual Maximum Rates and Fees for Adult Social Care

Date of implementation 11 April 2016

EIR completed by: Name:

Tel:

Debbie Young

0330 2224134

1. Decide whether this report is needed and, if so, describe how you have assessed the impact of the proposal.

The rate paid by WSCC for placements into care homes, for Adults, needs to be based on evidence and information available about the market in West Sussex. For 2016/17 a cost benchmarking exercise was undertaken with providers of care home services in West Sussex to arrive at a cost of care in West Sussex (for placements made at the usual maximum rates under the Care Home Services Contract 2007). This also took into account the impact of the National Living Wage from April. This exercise has enabled a unique insight into the cost of providing care in (localities in) West Sussex, and therefore the impact on customers if a fair fee is not agreed. Other areas analysed include:

• The number of customers receiving a service • The proportion of the market funded by WSCC • Financial analysis to ascertain the number of customers WSCC is paying for:

above the authority’s standard rates; at usual maximum rates: and at usual maximum rates with a third party top-up.

Consideration has been given to the number of placements that can be made at usual maximum rates and where WSCC has been/is experiencing difficulty in making placements in the county it is introducing and enhanced rate of payment. Although any customer group may be impacted by the rate at which WSCC set its fees the group who would potentially be impacted the most by our rates would be older people and their families. 2. Describe any negative impact for customers or residents. Although there are top ups paid by individual customers and families, a significant number (including those higher in value) relate to WSCC picking up responsibility for private run outs as well as relatives paying third party top ups in respect of those customers who are on deferred payment agreements. This supports customers’ greater opportunity for choice because it enables them to secure or retain placements in homes that do not accept WSCC’s usual maximum rate. The customers are those who meet the national eligibility threshold and either are on a deferred payment (as their funds are tied up in assets) or are eligible for financial support and are in receipt of adult social care, in West Sussex, on a short, long-term or respite basis in a care home or care home with nursing.

It is acknowledged that any fee increase will have an effect on the sum recharged to full cost payers and on any customer choosing a care home or care home with nursing as an option for respite, as respite costs are included in the personal budget which is derived from the Resource Allocation System (RAS). The RAS is not being increased per se, but where this is likely to have an impact a variation will be required on a per customer basis to reduce the risk of inequality following a review. Full cost payers will be contacted, by letter, to advise of any fee increases, however if they had cashable assets they may be paying increased fees directly to providers rather than via WSCC. 3. Describe any positive effects which may offset any negative impact. This year sees increases to placements for all care home services and to some providers of community based services. With the introduction of a new rates structure for usual maximum rates to include enhanced rates it is hoped that this will stabilise existing services and attract new services/new providers into the area that are willing and able to provide services to WSCC at the published usual maximum rates. It is recognised that providers, like other businesses, have continued to provide services in really constrained financial services. By awarding increases and/or reviewing service provision the County Council aims to support and grow a healthy social care market which is funded in a way that facilitates the delivery of safe, quality care services to all customer groups. 4. Describe whether and how the proposal helps to eliminate

discrimination, harassment and victimisation. By reviewing rates for all Primary Support Reasons together, looking at commissioning intentions, the market dynamics and current and future legislation this provides a real opportunity to ensure ( as far as practicable) that there are safe, quality services than may be commissioned by all residents of West Sussex regardless of funding source or primary need. Particularly families of older people who often choose to pay additional money, to increase their choice of home, above WSCC usual maximum rates. With the new rates structure and increases to rates this will allow greater choice of placement for those funded by WSCC. 5. Describe whether and how the proposal helps to advance equality of

opportunity between people who share a protected characteristic and those who do not.

Individually agreed rates for residential and nursing placements are to be increased for all primary support reasons using the same formula These proposals are intended to support providers to continue to deliver (and improve, where required) quality services to meet customers’ individual needs, circumstances, cultures and lifestyles, hence ensuring that where customers personal circumstances and support needs change, that there is sufficient provision in the independent sector available to support them. 6. Describe whether and how the proposal helps to foster good relations

between persons who share a protected characteristic and those who do not.

The impact is, at most, marginal. As above, it is expected that by paying providers increases to deliver care in West Sussex, that they will continue to deliver (and improve, where required) quality services to meet customers’ individual needs, circumstances, cultures and lifestyles. This should improve customer outcomes, and provides support for measures to address discrepancies in opportunities amongst the adult population and have a small impact on relations referred to here. This raises the profile of care fees for older people and takes account of what the County Council pays for care for older people linked to the cost of provision similar to other care groups. 7. What changes were made to the proposal as a result? If none, explain

why. Fees are to be raised for Specialist Dementia Care in order to encourage more high quality care. A focus on complex needs is also required, and this is reflected in the proposals. In addition the quantity of places available in the market, but more particularly to WSCC, needs to increase in the Crawley and Mid Sussex area which may be supported by the introduction of the enhanced rate. All care groups were considered in determining the approach for fees and rates to encourage a fair and uniform approach. Due regard will be paid to the Equalities Duty and protected characteristics to ensure that all customers are treated fairly and no discrimination occurs. The Cabinet Member Decision will be communicated sensitively by letter to customers who are full cost payers or have a Deferred Payment, as any fee increase will affect the fees they pay. For customers who receive social care funding from the Council, where they pay a contribution towards the cost of their care the new rates will be used to determine how much the Council and the customer need to contribute. Once the Cabinet Member Decision has been taken providers will be formally advised of the change. 8. Explain how the impact will be monitored to make sure it continues to

meet the equality duty owed to customers and say who will be responsible for this.

A risk-based approach to quality assurance of care homes and the performance of the providers has now been fully adopted. Feedback from customers, individual providers, the West Sussex Partners in Care and Provider Forums will be reviewed by Contracts & Performance and Commissioning. In addition the County Council will continue to review the impact of the fee structure by reviewing the ease at which placements can be made at usual maximum rates.

To be signed by a Director or Head of Service to confirm that they have read and approved the content.

Name Avril Wilson Date 02/16

Your position Executive Director Care, Wellbeing and Education