Agenda item

Residential and Nursing Care Fee Levels within Adult Social Care

(This report invites the Committee to consider a proposed decision by the Executive Councillor on the setting of 'usual costs' for residential accommodation.   The recommendation to the Executive Councillor is that a usual cost should be set for each of the next three years incorporating an inflationary allowance in each year which anticipates the likely effect of changes to providers costs such as minimum wages or food prices)


The Committee considered a report on residential and nursing care fee levels within Adult Social Care, on which the Executive Councillor for Adult Care, Health and Children's Services was due to make a decision on 22 February 2018.  The report was jointly presented by the following officers:


  • Assistant Director of Adult Frailty and Long Terms Conditions
  • Assistant Director of Specialist Adult Services
  • Head of Finance, Adult Care and Community Wellbeing
  • Senior Strategic Commercial and Procurement Manager


Melanie Weatherley, the Chair of the Lincolnshire Care Association, was also present for the item, to provide the perspective of the representative association of residential and nursing care home providers. 


The Committee was advised that its agreed comments would be passed to the Executive Councillor for Adult Care, Health and Children's Services prior her making the decision on 22 February 2018.


The focus of the report was the rationale for the calculation of the 'usual cost' for three levels of service: residential, nursing and high dependency across all types of need (older people, physical disability, learning disability and mental health).  These costs had last been determined in 2015 for three financial years (2015/16, 2016/17 and 2017/18), and the proposal was for the usual costs again to be approved for the subsequent three financial years: 2018/19, 2019/20 and 2020/21.


The Committee was advised that the previous exercise in 2014/15 had failed to provide sufficient clarity on the cost of Learning Disability placements and therefore the usual cost had been based upon the baseline costs for Adult Frailty and Long Term Conditions. To address this, a separate programme of activity had been carried out on the Learning Disability provider market, which had led the creation of a proposed new cost model as well as a distinct set of usual costs for Learning Disability services.


The Committee was also advised of the importance of due process and the reasonableness and logic underpinning the usual cost. The report detailed the process; who had been involved; and the full details of consultation process. Overall, 48% of the care homes had replied to the consultation exercise.   


The report contained a full explanation of the model, which had been constructed to develop the usual costs, which had drawn on both national and local data.


The Committee was also advised of the contract changes, which were proposed as part of the decision.    


After consideration of the presentation from the officers, the Chair of the Lincolnshire Care Association stated that the consultation exercise had been constructive, and there was an understanding of the financial pressures that applied to the County Council.  Overall, the levels of fees proposed represented a 'fair' price.


Although not part of the proposed decision, reference was made to NHS funded nursing care, which was paid to providers by clinical commissioning groups in accordance with a national tariff.  In this regard reports by accountants (Mazar's) on behalf the Department of Health had led to determinations on the level of NHS funded nursing care.  Overall the level of nursing costs for nursing homes was not sustainable.  There were essentially two options available to providers: deregistration of nursing care beds; or continue to meet the shortfall in funded nursing care.  The latter option was not sustainable to many providers.   In addition, the high costs of agency nursing and the difficulties of recruiting nurses in Lincolnshire were cited as contributory factors. 


The Committee explored this topic further and was advised that the approach of the Care Quality Commission (CQC) to nursing care was important.  The CQC did not define the term 'available' nurse.  Where large providers operated in large premises it would be easier to have a nurse available on site.  For smaller providers the costs would be particularly high.  The roles of the executive nurses at the clinical commissioning groups were also cited as a factor.  They held the legal responsibility for nursing provision and NHS funded nursing care was a separate element to the Council-paid fees.


In addition to the above, members of the Committee also raised the following issues:


  • The proposed level of fees included the financial year 2020/21, and hitherto there had been no indication of the continuation of the Better Care Fund into this financial year.  The Committee was advised that this level of uncertainty applied to all local authorities, who currently relied on the Better Care Fund.  A green paper on the funding of adult social care was expected to be issued by the Government in September 2018. 
  • The staffing ratios specified in the levels of fees for learning disability would be determined by an individual's level of need.  If the level of need increased or decreased the agreed staffing ratio could also change.
  • Reference was made to Continuing Health Care, funded by the NHS, which was not part of the proposal in the report, and the approach of the local clinical commissioning groups to this. 
  • Generally information on the level of rates charged by each provider would be commercially sensitive, but the local authority could provide advice at the time of the placement on the fees charged by specific providers.
  • The Lincolnshire Care Association represented about 60% of the residential and nursing care beds available in Lincolnshire.  Homes which were part of a national chain did not generally join local associations, as they tended to be members of Care England. 

The Committee agreed to support the five recommendations in the report to the Executive Councillor and agreed to make additional comments as set out in part 2 of the resolution.




1.    That the recommendations to the Executive Councillor for Adult Care, Health and Children's Services on residential and nursing care fee levels within Adult Social Care be supported;


2.    That the following additional comments to be passed to the Executive Councillor in relation to this item:


      "The Committee recorded its gratitude for the work undertaken in the preparation of the proposed level of fees, including the required detailed calculations to support the proposals.  The Committee also welcomed the extent of the engagement of residential and nursing care providers in the consultation, in particular the Lincolnshire Care Association (LinCA), who was represented at the meeting by their Chair.


      "Prior to the Committee reaching its conclusion, particular consideration was given to the impact of nursing costs on providers.  The Committee was advised by the Chair of LinCA that the current position was not sustainable in the long term for many providers, and some providers had already deregistered nursing care beds, rather than cover the shortfall in their costs.  The shortage of nurses in Lincolnshire and the high costs of agency nurses were also cited.  Alternative solutions are being explored with clinical commissioning groups and other health colleagues.  An example is considering how nursing provision could be delivered in order to meet the requirement of an 'available' nurse, a term which is not defined by the Care Quality Commission.  The Committee was advised that the executive nurses in clinical commissioning groups hold the legal responsibility for nursing provision and NHS funded nursing care is an addition to the Council-paid fees." 


3.       That the Health and Wellbeing Board be requested to consider how clinical commissioning groups could be engaged on developing available nursing provision in relation to the issues set out in (2) above; and the Health Scrutiny Committee for Lincolnshire be advised of this Committee's consideration of this topic.  

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