Homecare provision for ages 18 and over

Contents

Background
What is homecare?
Methodology to the cost of care exercise
Outcome of the exercise
Table 1: Breakdown of cost of care 
Table 2: Profile of visit lengths in Southwark (number of hours per visit)
 

Background

Southwark Council (“The Council”) welcomes the government’s interest in the homecare sector which is often overshadowed by care homes when social care is discussed in the media. The council also welcomes the government’s interest in seeking a fair settlement for the funding of social care as expressed in Build Back Better: Our Plan for Health and Social Care and, in particular both homecare and older people’s care homes.

It is important to note that unlike health care, residents are expected to make a contribution to the cost of their care – in part or in full – and this is why the media coverage often focuses on selling your home to pay for care. The national framework for charging is designed to ensure that people pay what they can afford in relation to the price of care that the council pays. The cost of living crisis disproportionately affects those on the lowest incomes in our communities and people with disabilities are within the lowest income brackets and more likely to experience food and energy poverty. Whilst the value of Benefits will increase in line with inflation, the reality is that the cost of living continues to be high and therefore the council’s duty to achieve best value in the prices it pays for care becomes more important than ever.

For those fortunate enough to have funds to pay the full cost of care, they will be expecting councils to continue to manage the price of care until the other element of this social care reform – the (cost) of social care cap - is introduced. The cap is delayed until 2025. 

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What is homecare?

Homecare is when a care worker visits you in your home to help with daily living activities so that you can continue to safely live in your own home. 

In Southwark, homecare for people funded by the council is known as Care at Home. Only providers who are signed up to Southwark’s Ethical Care Charter hold a Care at Home contract.

Southwark’s Ethical Care Charter ensures that the homecare workforce working on council contracts are paid the London Living Wage, Travel time, Time when on training courses, and Occupational Sick pay.

The contract prices paid by the council enable providers to fulfil compliance with the Charter and fulfil their organisational obligations of making a profit or surplus depending on whether they are a for-profit or not-for-profit organisation.

Given the importance and financial value of this service, the council secures best value through open competition and testing quality and price. The council uses a price envelope to ensure that all elements of the Ethical Care Charter are reflected in the range of rates within the envelope. In order to ensure that the contract prices paid to providers keep pace with the Living Wage Foundation decisions about the rates of the Living Wage and London Living Wage, the council awards uplifts to reflect the increase in the LLW and the associated on-costs, as per the ADASS formula, (the Association of Directors of Adult Social Services).

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Methodology to the cost of care exercise

Southwark Council undertook the UK Government’s Fair Cost of Care exercise as per the issued guidance provided by Department of Health and Social Care (DHSC). This was a national exercise that took place during the national challenge of rising inflation driven primarily by energy and fuel costs, as well as the challenge of increasing demand and insufficient staffing to fulfil the presenting need. 

As part of the local requirement during the exercise, the following were submitted onto DHSC’s portal on 14 October 2022:

• Providers’ cost of care report (Annex A, Section 5)
• Spend report (Annex A, Section 3)
• Cost of care report content (Annex B)
• Provisional Market sustainability plan (Annex C)

The submissions from the 18+ homecare providers were collected in June and July 2022 and are reported on their 2022 base price.

We approached twelve providers via a survey and nine provided the requested information – 75% return. Prior to sending out the surveys, we met with providers to discuss the exercise.

The Council supported and encouraged providers to complete the toolkit for each relevant service and collect, collate, validate and analyse the responses - working to specific set timelines for providers to return individual cost of care data. 

Southwark have extensively compared all provider returns amongst each other to identify any potential outliers and recognise patterns which have formed. In doing so, there have been a few elements which have appeared to have incurred a large variance within the combined data set. This includes:

• travel time costs displayed a large variance between the smallest value (£1.13) and the highest value (£4.36) per hour, in which without industry guidance there could be discrepancies as to what the providers would consider within the element. The outcome could result in an inaccurate representation of Travel Time for the eligible providers.
• a large variance for the Central/ Head office charges includes a large variance between the smallest value (£0) and the largest value (£1.27) per hour, which could also have been misinterpreted.

The return on operations (ROO) calculations involves analysing the providers operations and central costs and adding a realistic mark-up on to costs to determine profit levels before tax per resident. The average ROO reported by the eligible providers within the borough was 4.2%. This included possible reinvestment back into the business.

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Outcome of the exercise

Table 1 below shows the outcome of the exercise based on the submissions of nine providers.

The council’s ethical care charter means that 15 minute calls should not be commissioned. This is because we want to ensure that commissioned visits are delivered in a person-centred way and are not rushed for either the person receiving the care or the person delivering it. Therefore Southwark’s profile of visits for 30, 45 and 60 minutes is 52%, 33% and 15% respectively.

The council recognises that paying a fair price for care is important for the sustainability of the homecare sector (which continues to see organisations entering the market) and therefore procurement exercises, which are both transparent (i.e. advertised) and values-based (e.g. ethical care charter), are the most objective way of securing/agreeing a fair price of care.

The council would like to thank all providers for taking the time to complete the exercise, your time and expertise is very much appreciated.

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Page last updated: 01 February 2023