North-East Wales Care Fees Methodology

Appendix A

A collaborative approach by Denbighshire County Council, Flintshire County Council & Wrexham County Borough Council.

Introduction

1.Delivering high-quality Social Care Services is recognised as being one of the most important priorities of Local Authorities. In August 2010, The Welsh Government published “Fulfilled Lives, Supportive Communities – Commissioning Framework Guidance and Good Practice” (FLSC Guidance). The FLSC Guidance encourages Local Authorities and their partners to ensure that commissioning practices are underpinned by the core values of social care and that they enable service users to “keep control of their lives within the wider context of promoting social inclusion, sustainability and delivering value”.

2.Part One of the FLSC Guidance provides guidance under section 7 (1) of the Local Authorities Social Services Act 1970 and includes 13 Standards, which are expected to assist Local Authorities in achieving effective commissioning practices for Social Care Services and in establishing sound governance of the process.

3.Standard four of the FLSC Guidance refers ‘Commissioning plans have been developed with partners and have involved all key stakeholders including users, carers, citizens and service providers in the statutory, private and third sector.’ To this end, Flintshire, Wrexham and Denbighshire County Councils intend to collectively consider the development of medium-term commissioning plans during 2012/13, which will involve Providers and their representative bodies.

4.Standard ten of the FLSC Guidance is of particular relevance to the Methodology of setting fees for providers of residential care. It emphasises that “Commissioners have understood the costs of directly provided and contracted social care services and have acted in a way to promote service sustainability”. It also refers to commissioners having a “rationale” to its fee setting process and describes the wider responsibility of understanding the market in terms of the distribution and provision of sustainable services.

Background

5.Historically, all three Local Authorities have had separate, but broadly similar approaches to their annual fee setting processes for residential homes. These approaches have included information from a mixture of different sources such as that provided annually by Care Forum Wales, which has also provided information on financial pressures facing the sector. Local information has also been used, together with meetings with providers, to discuss broader market issues as well as fees. The outcome has, in latter years, been generally in the form of inflationary increases to the current fee level which have led to differences in the fees paid within different Local Authority boundaries. Some exceptions have been noted to this approach, such as Wrexham increasing care fees for the EMI residential category by 5% for 2010/11.

6.The rising demand within the Social Care sector is due mainly to demographic pressures together with the need to sustain a market of high quality residential care providers to complement other Social Care services. This has led to Local Authorities moving to employ different Methodologies working alongside their partners in the Independent Sector to develop an appropriate and sustainable fee level.

  1. Since July 2011, Flintshire, Wrexham and Denbighshire County Council officers have worked collaboratively to develop a Methodology to inform fee setting for 2012/13 and beyond and specifically for older people placements. Officers from each of the three Local Authorities have also attempted to involve as many care home owners as possible in the development of the Methodology. This consultation has essentially take place on two levels. Firstly, in offering to consult on either a group or individual basis within each Local Authority area, and secondly, with Care Forum Wales, primarily via their Senior Policy Officer and including Care Forum Wales representative care home owners at several meetings.
  1. Throughout the meetings with care home owners and Care Forum Wales, there has been an emphasis on confirming that the Methodology being developed will be refined on an ongoing basis to ensure it remains reflective of changes to costs associated with the running of a residential care home.

North-East WalesMethodology

9.The costs of running a residential care home will always vary and are dependent on a number of issues including the following. A key consideration is the taking account of local factors.

  • The size of the home;
  • Its occupancy levels;
  • The age and layout of the premises;
  • The financing arrangements which are in place;
  • The range and complexity of clients and their needs.

10.In general, the guidance on offer to inform care fee setting, details the elements making up the running costs of a care home under three main areas. These are:

  • Staffing costs;
  • ‘Hotel’ costs, which include management costs, and finally:
  • ‘Other’ costs such as additional expenses and an allocation for return on investment.

11.This Methodology addresses each of these main areas and uses a combination of factors to identify a cost per week for each service user to build up into an overall fee.It is important to note, that should specific care home owner/s feel local circumstances and information have not been fully taken into account in terms of this Methodology and any resultant care fee, then they may ask for such to be taken into account based on the their ability to demonstrate and provide evidence that local variations actually exist.

12.Throughout the process of developing the North-East Wales Methodology, reference has been made to the 2008 version of the Laing and Buisson toolkit “A Fair Price for Care Wales” including a summary document from Care Forum Wales in October 2011. Information was also derived from data obtained from the Open Book Accounting (OBA) review of high-cost low-volume placements for clients with Learning Disabilities throughout the North Wales region. Information from the Care Forum Wales annual submission and from its representative on the working group has also provided credible information for us to work with. Finally, local information on staffing hours within a variety of care home sizes and categories have been taken into account also.

Hotel and Management Costs

13.Within this element of the Methodology, expenditure has been identified as a cost per resident per week (PRPW) using data from the following sources:

a) The median level based on the Open Book Accounting work has been applied to the following areas:

  • Local/Central admin costs;
  • Registered Manager costs.

b) Care Forum Wales information has been applied to the following areas:

  • Utilities costs;
  • Registration;
  • Recruitment;
  • Equipment to meet service user care needs;
  • Training;
  • Insurance;
  • Groceries and household provisions;
  • Property Maintenance.

The above information has been derived from the Care Forum Wales annual submission together with the 2008 guidance. Inflation has been applied to each area once again, in accordance with the information provided from Care Forum Wales.

Other Costs

14.This element of the Methodology includes:

a) Return on Investment:Information has been sourced from the Local Authority Valuation Office Agency to take account of local land and building costs to inform:

  • Rent and/or Mortgage costs;
  • Rate of Return;
  • Furniture and Fittings including repairs and renewals.

b) Other costs including uniforms – Figure derived from Care Forum Wales information have been used.

Staffing Costs

15.Identifying an appropriate level at which to quantify staffing costs has been challenging due to the changing levels of complexity of the residents receiving care. Work has been undertaken by the three Local Authorities to establish local staffing level information using data drawn from staff rotas across a range of care homes in terms of their size and the category or categories of care that they provide. This has resulted in the following staffing hours per category being applied to this Methodology:

  • Personal Care of Frail Older Clients – 16.57 hours per person per week
  • Personal Care of EMI Residential Clients – 20hours per person per week
  • Personal Care of Nursing Clients – 22.95 hours per person per week
  • Personal Care of Clients with Nursing EMI – 25.71 hours per person per week

Applying the Methodology

16.The North Wales Social Services Improvement Collaborative (NWSSIC) has commissioned a regional project group to produce a report, by January 2012, which includes options on the developing of a regional Methodology for care fee setting.

17.Not withstanding the intention to develop a regional Methodology, or indeed the Welsh Government’s apparent intention to develop a National care home contract and Methodology, Denbighshire, Flintshire and Wrexham Council officials have pressed ahead with developing this North-East Wales Methodology to ensure the care fee setting process for 2012/13 is both timely and through in relation to the care homes those three Councils currently contract with.

18.It is the intention of Denbighshire, Flintshire and Wrexham Council officials to present this Methodology, along with their proposed care fees to Council Members during February and March 2012, with the intention of gaining approval to implement the amended fees from April 2012.

19.During 2012/13, the intention is that this Methodology will continue to be refined in partnership with care home owners and Care Forum Wales. Collaborative work is also expected to take place to develop medium-term commissioning plans, again with input from Providers and their representative bodies.

End

Documentation control
Version 1 / As shared with CFW, October 2011
Version 2 / Updated based on feedback from meetings between Council officials November / December 2011.
Version 3 / Incorporating commissioning intentions.
Version 4 / Incorporating minor amendments from AB an MB

Version 4 – January 2012Page:1