Fair Cost of Care 2022 survey reports

Reports on a survey of the costs of care homes for older people and visit-based home care services carried out during March to August 2022 to prepare for the planned (but subsequently deferred) implementation in October 2023 of reforms to adult social care funding.

The Government's Department of Health and Social Care (DHSC) asked all local authorities responsible for adult social care to survey care homes for older people and home care services in their area about the costs of providing their services. The specific reason for carrying out these surveys in 2022 was the plan to change the statutory framework for adult social care in ways which would entitle anyone needing care home accommodation to ask the local authority to contract for this, regardless of their financial circumstances. After the survey was completed, and the results submitted to DHSC, it was announced that those reforms would be deferred for two years, and we are not certain whether they will now proceed in their original form.

Because local authorities usually at present contract only for people who cannot afford to pay care home fees themselves, the reforms would have made local authorities responsible for many people who under the current system would contract with a care home privately. Since many care homes for older people charge higher fees to private residents, this could have caused significant financial issues for both care home operators and local authorities. The Government's expectation was that the survey would provide an indication of the extent to which fees paid by local authorities might need to rise as this change took effect, to minimise the impact on care home operators. The Government had also carried out financial modelling which suggested that many local authorities were paying fees for both care home accommodation and visit-based home care services which were not as high as was necessary to sustain the long-term viability of the services.

DHSC published an impact assessment about the charging reforms that the Government was expecting to introduce in 2023 (PDF document) which explains their expectations about the impact of the reforms on care homes, and the increases to fee levels likely to be required.Guidance about the "fair cost of care" survey was published in July 2022.

The Council submitted in October 2022 the documents required by DHSC summarising the results of the "fair cost of care" survey and explaining its current plans for assessing the fees required to sustain care homes and home care services. The submitted documents are available below. The Council did not publish these documents at the time, since it understood that DHSC wished to review the submissions before publication, to ensure that the calculations included in them were robust and based on good quality evidence. Following the decision to defer the planned reforms, DHSC told local authorities they should publish their submitted survey findings by 30 January without waiting for approval of the documents.

The Council are also required to complete a Market Sustainability Plan. DHSC stated that the purpose of the plan is for local authorities to assess and demonstrate how they will ensure local care markets are sustainable, as they move towards implementing reform. DHSC have told us that we must produce a final Market Sustainability Plan on a different basis following the delay of the reform; we do not yet have final details of their expectations for that. They have also indicated that they may still ask some local authorities to review the documents about the survey that they have submitted. So far we have had no indication that they will ask us to review the documents below, but we will publish revised versions on this page if DHSC contact us and we conclude that we should make changes.

As explained in the documents about this exercise, our conclusion was that, while the surveys provided useful information about the costs of services, there were too many issues about the data for it to act directly as a guide to future fee levels. Our understanding is that a similar conclusion was reached by many other local authorities, though varying assumptions were made about how best to calculate the figures returned to DHSC.

Explanations of how these figures were calculated are included in two separate documents, one covering the survey of care homes, the other the survey of home care services. The Council is currently reviewing the 2023/24 adult social care fee rates as part of its Annual Price Review Process and will utilise any dedicated funding from the DHSC to support inflationary increases to these rates. Once its budget is approved in February 2023, the Council will notify all care providers of any increases to the 2023/2024 fee rates. The Council's intended approach to setting fees in future will also be outlined in the Market Sustainability Plan due to be finalised and published by 27 March 2023.

If you have queries about any of these documents, please let us know by email to StrategicCommissioning@southend.gov.uk.

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