This note was shared by the Department of Health and Social Care (DHSC) to provide clarification on the Market Sustainability and Fair Cost of Care Fund policy by highlighting key aspects of the published guidance and responding to technical questions particularly around data, alongside updates on some of the charging reform policies, contained within the Implementing the cap on care costs: revised draft operational guidance which are intrinsically linked to the Fund, including Section 18(3) and first party top-ups.
We have been reflecting on the feedback and questions we have received over the past few months as local authorities work towards submitting your Fair Cost of Care returns. Having now received their full returns, working closely with Trailblazers has been invaluable learning for the Department.
In light of that important insight and in response to questions we have received, this note is intended to provide clarification on the Market Sustainability and Fair Cost of Care Fund policy by highlighting key aspects of the published guidance and responding to technical questions particularly around data, alongside updates on some of the charging reform policies, contained within the Implementing the cap on care costs: revised draft operational guidance which are intrinsically linked to the Fund, including Section 18(3) and first party top-ups.
Defining 'moving towards'
- Our policy expectation is that local authorities make as much progress as possible towards the fair cost of care identified locally in your exercise within this Spending Review period.
- Our policy guidance talks about “moving towards” because we recognise that this is a journey. Although we expect local authorities to move towards paying a fair cost of care, we know local authorities will be starting from different points, with some further away from the fair cost of care than others.
- This means some local authorities will reach the fair cost of care for their local area in this Spending Review period, whereas others are on a longer journey and will not. Our policy expectation is therefore that you make as much progress as possible.
- We are working closely with the LGA and ADASS to ensure the department has a well-informed understanding of what these starting positions look like from a regional perspective.
- Local authorities have flagged challenges in making commitments on how much they can move towards paying providers a fair cost of care before wider budgets are set. For this reason, and in direct response to local Government engagement, we have adopted a two-stage approach to market sustainability plans. Your provisional market sustainability plans, due 14th October are an opportunity for local authorities to assess the impact current fee rates are having on their market and potential future risks, particularly in the context of adult social care reform. They will serve as a vehicle for setting high level strategic choices in how funding will be used to address these sustainability challenges. Final market sustainability plans are due to be submitted in February 2023. This two-stage process was intended to enable you to produce a costed plan outlining how funding in future years will be spent in line with key actions, after local government budgets have been finalised.
Interpreting survey data
- We recognise that local authorities are best positioned to interpret the data you receive from your provider market, and that the data local authorities are receiving may not easily translate into the breakdowns we have supplied in our Annex A reporting template. We are also aware of the other practical challenges of handling data; whether that be due to the profile of the relevant providers for this exercise not marrying up to the profile which local authorities commission from, or because the rates paid to individual providers vary from individual packages, as just two examples.
- We want this process to allow for local authorities to use their best judgement on ensuring cost lines are not inflated or deflated, on account of COVID-19 expenditure and grant activity for example, but rather reflect the actual operating cost of delivering care.
- Cost of care exercises should reflect actual operating costs as opposed to desired fee rates. Where local authorities identify information which seems to constitute an outlier, they should scrutinise these in collaboration with the provider. It is important to challenge unusual values and give providers the opportunity to explain, refine and correct data, as the outlier may be a misunderstanding of the cost line, or reflect higher operating costs, and resolving the issue may increase the effective sample size and quality of the report. However, it may be necessary to remove or amend unexplained data from your analysis before calculating results. In these instances, we expect to see the rationale clearly outlined in cost of care reports.
- We have amended the Annex A reporting template to enable you to be flexible in your approach to calculating cost lines. The template now allows for you to choose your own approach to:
- o How to most appropriately handle missing values and zeros; o Whether subtotals should be the sum of the underlying detail row medians, or whether another approach should be taken, such as calculating the overall median for that subcategory.
- For this reason, we have revised the Annex A template found on the Market Sustainability and Fair Cost of Care Fund guidance landing page to remove the requirement that subtotals should be the sum of the underlying detail rows, although local authorities can still choose to do that if appropriate.
Publication of exercises
- Our grant conditions require that local authorities publish their cost of care reports and final market sustainability plans to ensure transparency.
- Cost of care reports should include, but are not limited to, the contents described in Annex B: cost of care reports contents, and therefore explain: how the cost of care exercises were carried out; how providers were engaged; the lower quartile, median and upper quartile for costs collected; how the resulting cost of care for the local area has been determined, including the approach taken for return on capital and return on operations.
- Local authorities will be asked to publish cost of care reports after the 14 October submission deadline. We will be in touch in due course with publication dates but want to reassure you that we will give you as much notice as possible, once confirmed.
- Local authorities are not required to publish the provisional market sustainability plans submitted alongside cost of care exercises in October.
- Final market sustainability plans are due to be submitted in February 2023. Once we have confirmed this date, we will also confirm when we expect these to be published thereafter, recognising the pressure local authorities face over the winter period.
- Both cost of care reports and final market sustainability plans will need to be published on your GOV.UK webpage, clearly labelled and in an easy to find location.