1. Transforming Residential & Nursing Care
Have Your Say Workshop
26th April 2016
presented by
Zoe Mayhew
Service Manager Commissioning For Older People
Warwickshire County Council

2. Where have we come from? Multiple contracts and specifications
Health/ care services are separate with little integration
We asked the question… what can we do differently?
Key issues and ‘drivers for change’
The Residential and Nursing Care Home market in Coventry and Warwickshire has an estimated value of £195 million per annum.
This figure includes Older People care home services of which in Warwickshire 34% of beds are funded by the Local Authority, between 5% and 10% are funded by NHS Clinical Commissioning Groups (CCG’s), between 5% and 10% are vacant and the remainder are funded by self-funders.
Levels of Public Sector Spending:
Aggregate public sector spending on care home services in 13/14 was:
Warwickshire CC - £61.1 million
Coventry CC - £34.9 million
Coventry and Warwickshire CCG’s - £59.7 million
The Care Act 2014
In accordance with The Care Act 2014 (applicable to adult social care customers) there is a clear responsibility placed on local authorities to move towards quality outcome-based commissioning for its customers while also ensuring that the local care market is sustainable. The statutory guidance says:
When commissioning services, local authorities should assure themselves and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care. This should support and promote the wellbeing of people who receive care and support, and allow for the service provider the ability to meet statutory obligations to pay at least the national minimum wage and provide effective training and development of staff. It should also allow retention of staff commensurate with delivering services to the agreed quality, and encourage innovation and improvement. Local authorities should have regard to guidance on minimum fee levels necessary to provide this assurance, taking account of the local economic environment.
Risk of Judicial Review
Even prior to the Care Act, the setting of care home contract fees at a fair level by local authorities has been the focus of more than 15 judicial review cases since 2010, of which over 85% have found in favour of care home providers. The principle which has been established through those cases is essentially that due regard must be had to the actual cost of providing care (both revenue and capital) in setting care home fee rates.
New National Living Wage
In addition, the Government’s July 2015 Budget announcement of a new National Living Wage to be implemented from April 2016 will have a significant impact on the care home provider market and its workforce. The National Living Wage is an 8% increase on the current National Minimum Wage and will rise by a further 25% over the course of the following 4 years to Given that staffing costs account for about 60% of the cost of Residential and Nursing care and wages in the sector are currently pegged to NMW, this will be a major impact. It is therefore likely that the issue of fee rates is going to be a focus for continued provider concern both locally and nationally.
Quality Standard Issues
As well as responding to pressures from the market, there are a number of other imperatives for the public sector commissioners in Warwickshire and Coventry to review their approach to care home fees, most particularly in relation to quality. Quality in independent Older Peoples care homes in Warwickshire requires improvement. Of a total of 110 Older Peoples care homes in the county, 17 homes (15%) are CQC non-compliant in one or more area and require improvement. 63 homes have current outstanding issues under investigation by The Council’s contract monitoring team (57%). 9 homes are currently under investigation in relation to serious issues at the Service Escalation Panel (8%). The current commissioning and contracting structure for older peoples care homes does not incentivise improvements in quality to a sufficient extent. In order to create a culture of improvement and incentivisation consistent with local priorities and The Care Act, care home fee rates must be linked to quality of outcomes for customers.
Warwickshire Association of Residential and Nursing Care Homes (WACH)
Warwickshire Association of Residential and Nursing Care Homes (WACH) are a care home provider representative group claiming to represent over 90% of care homes in Warwickshire. The The Council and it’s partners have had a positive and constructive relationship with WACH in recent years. However, the fee rates issue remains a focal point for disagreement and the positive relationship is premised on an understanding that future development of services will include a redesign of commissioning arrangements and a revised approach towards calculating and agreeing fee rates; The Council has calculated rates since 2012/13 using an ‘individual negotiation’ approach, using a ‘financial consultation toolkit’. This moved contract pricing away from a blanket, standard pricing structure to one in which the fee rates were agreed on an individual basis, home by home. This reduced the risk of judicial review in response to WACH formally threatening to commence legal proceedings against the Council in During this period no attempt has been made by The Council to substantially revise our service specification, quality model or, most significantly, to re-cast arrangements under an integrated Health and Social Care model; in view of these developments this it is unlikely that the existing ‘individual negotiation’ approach will provide a thorough and effective solution on fee rate determination.

3. Care Homes - Where are we now?
Warwickshire County Council, Warwickshire North Clinical Commissioning Group and South Warwickshire Clinical Commissioning Group have reached agreement on a Single Outcomes-Based Service Specification for all social care and health funded care home placements;
Single Quality standard;
Coventry and Rugby Clinical Commissioning Group are partnering with Coventry City Council, so arrangements for Rugby will be different.

4. Continued…
The Partners have reached agreement to enter a joint exercise
Warwickshire County Council are the lead for this process
All care home customer’s/ client groups are covered by the new agreement

5. What now…. 25th January Tender process for in-area providers
Stage 1: Evaluation
Stage 2: Price negotiation
Award new contracts in August 2016

6. Benefits for customers….
All Residential and Nursing Care homes will have to meet the same quality standards;
The quality have been developed following significant engagement activity with members of the public and residents in care homes;
Residents will be central to telling us what good looks like;
We will take a hard line with any standards that are below what we expect;
Residents and family members will know who to contact if they want to talk about the care being delivered in the home;
Residents will have a good choice of homes to live in throughout the county.

7. What is tendering?
A process for providers to submit proposals in relation to delivering services
In this context it will serve as a process for validating the quality and sustainability of providers
Also it will provide a fair and transparent method for providers to agree to new service specification and contract.

8. Provisional tender timetable
Activity
Date
Issue tender documents
25th January 2016
Tender return deadline
23rd February 2016
Suitability assessment evaluation period
24th February to 4th April 2016
Award
August 2016

9. Questions…