The white paper on adult social care claims to put people at the centre of social care and fleshes out how the government plans to spend taxes raised from a new health and social care levy, which will be introduced in April 2022. This is intended to help fund the social care system and address financial challenges in the NHS. This is expected to raise over £36 billion over the next three years. Only £5.4 billion is expected to go into social care, with the rest supporting the NHS catch up on its pandemic-related backlog.
Levelling the playing field for self-funders
One of the white paper’s goals is: “to ensure that self-funders can access the same rates for care costs as local authorities for care homes, ending the unfairness where self-funders have to pay more for the same care.” It also pledges to ensure local authorities move towards paying a fair cost of care to providers.
This should be welcome news at a time when some providers have had to hand back local authority contracts due to ‘non-viable’ below market rates. The question then becomes whether the definition of ‘fair costs’ will be enough for a sector already under pressure? We have first hand experience of working with providers who have closed homes where local authority rates have been insufficient to generate a sustainable level of profitability.
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A difficult choice for care providers
Care homes are already under pressure to decide whether to keep taking council-funded patients – knowing that they may only cover marginal costs – or whether to focus solely on private-sector patients. If new measures mean that rates for self-funded patients are suddenly reduced to those previously reserved for council patients, they will find themselves under even more strain.
Those wishing to continue taking council patients may have to resort to price discrimination and offer a two-tier system, for example with options around bedroom size and aspect, ensuite bathrooms, or standard of food. In a healthcare setting, large adjustments may not be ethically or practically feasible.
The government has stipulated that the adult social care cap applies to “personal costs” only. This means that accommodation-related costs such as food and energy in a care home do not count towards the £86,000 cap. It remains to be seen if they are charged to the local authority or the resident directly.
No seat at the table
As of July 2022, the introduction of integrated care systems will change how health and care services are planned, paid for and delivered in England. Under current proposals, each ICS would be led by an NHS Integrated Care Board (ICB), an organisation with responsibility for NHS functions and budgets, and an Integrated Care Partnership (ICP), a statutory committee bringing together all system partners to produce a health and care strategy.
Despite a focus on social care, an amendment was tabled to the Health and Social Care Bill, which prevented the private sector from taking a seat on the newly created ICBs. This means that there is no representation from private care homes, who own the majority of care beds in England. To succeed, the ICS must find a way to work with the private sector.
Next steps
The government white paper states that further details will be announced shortly as to how it will pay care providers a fair rate. Both care providers and local authorities will be carefully analysing any announcements to ensure that funding for England's care homes is viable for all involved.
For more insight and guidance on the potential implications of changes to the adult social care sector in England, get in touch with Daniel Smith, Schellion Horn, Peter Jennings or Nick Clarke.
