Straight Talk
Martin Green

Martin Green raises concerns about financial constraints and local authority commissioning practices on the Care Act.

Now is a pivotal moment for the sector. The Care Bill has finally become the Care Act, the most significant piece of social care legislation in decades that aims to overhaul the system and create an affordable and adaptable system for all.

I think that many of those working in the sector, myself included, are united in support for such a change. The care sector is under strain. An ageing population will only add further pressure, we need reform now if we are to ensure sufficient, safe and well-staffed care is available for future generations. Yet for all its benefits and promises of progress, the Act doesn’t inspire me with confidence. Nor does it assuage many of the concerns we have.

Primarily, the Act has side-stepped the thorny issue of finance and local authority (LA) commissioning practices. Arguably, this is the area most in need of reform, but due to the inevitable complications and fiscal challenges, it’s one that slipped through the net. Few LAs pay care placement fees which accurately reflect the true cost of providing care. This creates a shortfall in funding which is placing providers, both private and not-for-profit, under increasing strain. To date, the ‘sticking plaster’ solution has been cross-subsidisation; private funders, providers and more generous LAs covering the shortfall. The Act looks to stop this practice, but fails to provide a viable solution for the fundamental problem, a lack of available funds going into the system.

LAs have seen budgets slashed whilst facing increasing costs of providing services. They are operating on a knife-edge too. However, providers cannot invest in services, improve training, pay staff a living wage and ensure top quality care without proper financing. We cannot ensure ever-improving quality whilst accepting ever-dwindling rates. Commissioning is becoming a ‘race to the bottom’, with the main criteria being who can accept the lowest price and still function. If we are to avoid another Southern Cross scale collapse, or the collapse of any provider for that matter, the structures of care provision must adapt so that providers are offered rates which tally with costs. This will, of course, be more expensive but surely it’s worth it if it means better care for all.

Such reform was not provisioned for within the Care Act, but not for want of trying. Various parties pushed the agenda of commissioning reform. During the committee stages several MPs voiced their concerns, former Care Minister Paul Burstow MP, commented, ‘Commissioning has, in practice, turned out to be crude procurement’, and he quoted a 2013 Office of Fair Trading report which found, ‘that providers felt there was a lack of clear strategic direction from local authorities, and a lack of commissioning and procurement skills – which was leading to market inefficiencies and difficulties in planning’.

We’ve been campaigning to raise awareness of this issue. Protect Care, Pay Fair got the issue discussed in the House of Commons, with two amendments reviewed by MPs.  The amendments called for the introduction of a ‘fair funding formula’, which LAs would utilise when tendering contracts, to ensure reasonable costs were met. This would keep the market healthy and drive up standards. These amendments didn’t make it on to the Bill; the cost implications are understandably something the Government is keen to steer clear of if it can. However, we can’t keep hoping that these damaging commissioning practices will change by themselves.

Those in power accept the arguments behind these concerns, Care and Support Minister Norman Lamb MP acknowledged the issues in the Committee Stages of the Bill and the House of Commons. However, until there is a groundswell of public opinion calling for LA funding reform, this acceptance is unlikely to translate into action. I fear this may only come if there’s more serious financial care provider collapse, something we all want to avoid.

Mr Lamb assured MPs that any LA that doesn’t consider the actual cost of care when setting fee levels is unlikely to be fulfilling its statutory duties, and that this will be addressed fully in the Act’s accompanying guidance. We’re currently awaiting the draft guidance and its consultation. We’ll be reviewing it carefully and submitting a detailed response. It’s a huge opportunity to ensure commissioning practices are addressed and that real incentives (or penalties) are in place to ensure change happens on the ground.

A recent announcement from Jon Rouse, Director General for Social Care, Local Government and Care Partnerships at the Department of Health confirmed that councils won’t receive any more money. The £470 million pot is what LAs are relying on to implement the Act’s reforms. If, or perhaps more realistically, when, this runs out, there is no back-up plan to ensure that the new laws are adhered to, no provisions to ensure councils will see the Act translated into action.

At this junction in the journey of social care, I don’t want to see all the good of the Care Act overshadowed by a slow progression towards an untenable market place and the inability for providers to invest in services. Current and future generations need and deserve quality care. We shouldn’t be avoiding reform purely for the sake of short-term financial ease.

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