Decision: To establish a Provisional Guide Price for Older Persons’ Residential and Nursing Care Homes from April 2016.
This decision is needed to confirm the Provisional Guide Prices for Older Persons’ Residential and Nursing Care Homes from April 2016 and directly supports the council’s objectives of ensuring:
• Older and vulnerable residents are safe and supported with choices to live independently
• Residents have greater choice and control over the health and social care they receive
Additionally, this Provisional Guide Price decision is a key part of the subsequent decision for confirming the Guide Price and contract award in April 2016. It does not include the impact of the National Living Wage
Financial Implications
The provisional Guide Prices, as detailed in Appendix One of the accompanying report and the table below, do not include the impact of the introduction of the National Living Wage. Further work would be required at the point the settlement is known and the tendered prices from providers may need to be adjusted in order to take this into account. There is a risk that providers will not trust that the prices will be adjusted in light of the announcement and may not tender, therefore it is important that the Pricing Schedule clearly articulates the process and formula for this process so that it is hard wired into the contract,
The work undertaken to set the provisional Guide Prices for April 2016 has been on the basis that:
· any individual below the new provisional Guide Price will be increased to the new Guide Price for the placement category so long as the provider joins the DPS and accepts the contracts terms and conditions
· all contract prices for existing clients that are above the provisional Guide Prices will not receive a corresponding increase but will need adjustment for the impact of the National Living Wage
· the provisional Guide Prices will be increased once the settlement relating to the National Living Wage is known and allocated
The Registered Nursing Care Contribution funded to Nursing Homes for the nursing element of the service is under review by the NHS. The rates at Appendix One are for the Social Care contribution only.
As stated, for the 2014 Guide Price setting, there continued to be two area prices which have now been set as one Kent price for each need category in accordance with the commitment given by the Cabinet Member in 2014. The Provisional Guide Prices for decision are proposed to change as follows:
|
|
Guide Price2014 |
*Provisional Guide Price 2016 |
% increase |
|
|
£ |
£ |
% |
|
Residential (All Areas) |
352.18 |
367.99 |
4% |
|
Residential High Area 1 |
408.48 |
448.72 |
10% |
|
Residential High Area 2 |
440.30 |
448.72 |
2% |
|
Nursing Medium Area 1 |
450.72 |
497.81 |
10% |
|
Nursing Medium Area 2 |
487.42 |
497.81 |
2% |
|
Nursing High Area 1 |
450.72 |
523.01 |
16% |
|
Nursing High Area 2 |
487.42 |
523.01 |
7% |
*These do not include the NLW impact from 1 April 2016
The impact of increasing the Guide Prices, and the subsequent impact on client charges, shows that this would cost an additional £3.8m to fund this increase. This has been factored into the very challenging discussions regarding the 2016/17 budget of which there has been considerable pressure to seek reductions to this.
Legal Implications
There is a risk that providers may challenge the rates as set out in the provisional Guide Prices at Appendix One and above. This process commenced from information provided in 2014 and analysis of the market prices has been undertaken from October 2014. The design of the contract is for providers to price against need and therefore it was much clearer to identify issues of the availability of accommodation and also choice. Officers are confident that due process has been undertaken in establishing the Guide Prices as this is a real and true reflection of market behaviour.
Although the Council has set a provisional Guide Price, the design of the contract is for the market to set an indicative (not to exceed) price when joining. Underlying sustainability of the social care market for older people is a key factor when analysing the costs of care. Price adjustments caused by the implementation of the Living Wage will need to be mechanised within the contract to ensure providers do not price based on risk of future increases, nor are unfairly penalised, by having to adhere to mandatory policy changes.
Personnel and Training Implications
The provisional Guide Prices will be available, however they will become formally approved Guide Prices after the impact of the settlement in relation to the National Living Wage (as confirmed by the Government as part of the Comprehensive Spending Review) and also once KCC has approved the budget for 2016 in February 2016. Once formally approved they will be published and issued to the Operational teams, Finance colleagues and the Central Purchasing Teams.
There is planned activity in relation to training on the new contract and how to make placements against the new contract and the roll out of the new Guide Prices will form part of that.
Equality Impact Assessment
An Equality Impact Assessment has been undertaken for the implementation of the new provisional Guide Prices and is attached to the accompanying report as Appendix Two.
Decision type: Key
Reason Key: Expenditure or savings of more than £1m;
Decision status: Recommendations Approved
Notice of proposed decision first published: 23/10/2015
Decision due: Not before 6th Nov 2015 by Cabinet Member for Adult Social Care and Public Health
Reason: in order that the proposed decision can be published for a minimum of 28 days, in accordance with statutory requirements
Lead member: Cabinet Member for Adult Social Care and Public Health
Department: Social Care, Health & Wellbeing
Contact: Christy Holden, Head of Children's Commissioning 03000 415356.
Consultees
This item was discussed at the Adult Social Care and Health Cabinet Committee on 11 September 2015. Officersexplained the changes which were being proposed to the contract, and the context for those changes, and responded to comments and questions from Members, as follows:-
a) the decision would be taken in two stages; the guide price would be determined in November and the contract awarded in February. Demand and price would need to be balanced, and this would take much analysis; and
b) a forecast of the impact of the changes would be that fewer people would require a residential or nursing placement but those who did would have a greater dependency.
The Cabinet Member, Mr G K Gibbens, assured Members that, although he would be taking the first decision (about guide price) before the committee next met in early December, all Members would have an opportunity to see and comment on the proposed decision, as part of the County Council’s usual decision-making process. He urged all Members to take the opportunity to read the proposed decision paperwork when it was published and sent to them.
RESOLVED that the work on this issue to date be endorsed and continue to the decision stage, as set out in the report.
Consultation commenced in October 2015 as part of the formal budget setting process.
Financial implications: Lead officer: Christy Holden – Head of Commissioning 03000 415356 Christy.holden@kent.gov.uk Lead Director: Anne Tidmarsh -Director of Older People and Physical Disability 03000 415521 Anne.tidmarsh@kent.gov.uk
Legal implications: 15/00089