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Ensuring a Fair Price for Care

Putting a fair price on care services is a complex task. Against a backdrop of immense pressures on social care budgets Nottingham City Council explains how it has sought to pay providers a fair price for care and ensure citizens receive a quality service.

In 2012, Nottingham City Council identified that in order to discharge its statutory duty to provide residential accommodation to adults with an assessed need the Council needed to consider the fees it pays to providers, whilst bearing in mind the limited funds available. In this context the Council agreed to commission external independent specialist support to undertake a review to identify an appropriate price for residential and nursing care services in the City.

Valuing Care Financial Management (VCFM) were appointed to carry out this work which comprised a sample costing exercise of placements in a cross section of services and analysis with reference to a national comparator database of rates. The process included local provider engagement with VCFM.

The report of the review findings was completed in March 2013 and formed the basis for the Council’s pricing structure from 2013 onwards. The report entitled Fair Price for Care Review outlined the findings of the review and prices that were suggested to represent a reasonable price for care for services in the City.


The local care home providers were consulted on a number of occasions in relation to the findings and the proposed pricing arrangements. Initially, the consultation was on the pricing for 2013 to 2014 and subsequently for the proposed pricing structure from 2014 to 2017. During the first consultation the review information was supplied to providers to ensure transparency of process. This information was anonymised as some information would have been commercially sensitive to individual providers.

In subsequent consultations, the longer term pricing structure was published and views sought from providers. The Council recognised the importance of getting a broad range of providers’ views and at one point extended the consultation following discussions with providers to enable further comments to be included.

Following the consultation, the recommendations were agreed by the Council in April 2014. These recommendations were informed by a range of evidence including the consultation responses, the report of VCFM and by an Equality Impact Assessment. Throughout the process the Council has been clear that the pricing structure is based upon a core cost of providing residential care. Citizens with needs over and above the core elements would be considered by the Council and additional funding provided where appropriate.

Pricing structure

The proposed core price would be the minimum price for residential and nursing care, payable for those packages where the identified care needs can be met through the minimum ‘core’ level of service. The Core Elements of Care document accompanied the pricing proposals during the consultation to define the core elements of service to be covered by the minimum core price.

For citizens with higher levels of need that cannot be met through the core package, additional support/staffing/hours assessed to be needed over and above the core price will continue to be paid for on top of the minimum core price. This will include citizens with dementia and other complex needs. This would ensure those citizens with higher levels of need would have the appropriate level of care funded and enable Nottingham City Council to fulfil its statutory duty to meet assessed needs.


During the review of pricing it became clear that there needed to be further consideration of the previous pricing structure, which for older people’s services was based upon five quality bands. It was important to the Council that to ensure all services are able to meet the required service standards on a sustainable basis, all should be paid equally the price needed to deliver care to an acceptable standard. This should enable lower banded homes to make improvements. The Council made clear its intention to manage quality standards robustly through the contract compliance process and to apply sanctions for poor performance. Quality monitoring visits are undertaken with a RAG (red, amber, green) rating system and the ratings are made publicly available to citizens to support them in their choice of home.

Through contract compliance and market development Nottingham City Council aims to shape the local residential market to improve quality across all residential and nursing care homes. Performance managing providers against the contract terms and conditions is important but is only one element of the work to improve quality in Nottingham City. The Council has also worked with a number of local suppliers around measures to improve quality of provision as well as providing advice on making their business sustainable in the longer term against a backdrop of a move towards increasing more home-based provision and reducing demand for residential care.


Nottingham City Council is committed to commissioning quality residential and nursing home provision at a level of pricing that is fair and sustainable and is based upon robust evidence of the cost of delivery. The Council continues to be driven by the priority of ensuring its citizens receive quality care with the limited funds available.

With thanks to Nottingham City Council.

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