Nothing for Services; Nothing for Quality

Local Authority and Primary Care Trusts’ approach to fee uplifts to
Independent residential care providers 2008-09

ECCA Campaign on Local Authority and Primary Care Trust
Fee Uplifts to Independent Residential Care Providers 2008-09

1. Introduction

English Community Care Association (ECCA), a registered charity, is the leading representative body for independent care homes and speaks with a unified voice both for its members and the whole community care sector.

Working on behalf of small, medium and large providers, our aim is to promote high standards of health and social care in the independent sector and create an environment in which care homes can deliver the high quality care that communities require and deserve.

Our membership includes organisations of varying types and sizes, amongst them single care homes, small local groups, national providers and not-for-profit voluntary organisations and associations. Between them they provide a variety of services for older people and those with long term conditions, learning disabilities or mental health problems.

2. Local Authority Funding and Residential Care

Over 250,000 vulnerable adults live in state-funded residential care in England. Local authorities and Primary Care Trusts (PCTs) commission and fund this care.

Local authorities and PCTs commission beds in independent care homes on behalf of their clients using ‘spot’ (on an individual or ad hoc basis) and/or ‘block’ (reserving a number of beds for a fixed term) contracts.

When a local authority or PCT commissions the services of an independent residential care provider on behalf of a client, a legal contract is written between the care provider and authority which specifies what the care package for the resident will consist of and how much that package will cost.

Local authority/PCT contracts with independent care providers often contain clauses that ensure that residential fees will be subject to an annual inflationary uplift. These uplifts apply at the beginning of every financial year.

3. Comprehensive Spending Review

The Comprehensive Spending Review (CSR) on 9 October 2007 announced a 1% real terms rise in grant to local government over the next three years.

In response to this news, Sir Simon Milton, Chairman of the Local Government Association, said this amounted to “the worst settlement for local government in a decade”. He said that councils would “continue to work hard for the people they serve but they face tough choices. The Chancellor's announcement will mean above inflation rises in bills for council taxpayers and businesses, and there remains a black hole in funding for the care of the elderly”.

While it is true that local authority funding has not increased at the rates to which they have become accustomed, the simple fact is Government funding to local authorities has increased in real terms.

4. Cost Increases in Residential Care

Since the last financial year, the costs for residential care providers have not only risen by the rate of inflation, but they have also had other extra costs in the form of extra holiday entitlement and increases in the minimum wage, all of which have placed added burdens on the sector.

In order to meet these increased costs, care providers rely on authorities to honour their contracts and pass on the increases which they have been given by Government directly to the people providing services.

ECCA lobbies on behalf of its members for commissioning authorities to pay a fair cost for care and to commission care on the basis of quality rather than cost. ECCA also lobbies commissioners to reward high quality care with appropriate fee levels.

5. English Community Care Association Local Authority Fees Campaign

As this new financial year approached, ECCA began to hear reports from several of our members who had been informed by their commissioning authorities that they would not be receiving fee increases in line with the rate of inflation for the forthcoming financial year. Many care providers were being told that the CSR settlement and the need to make ‘efficiency savings’ were the reasons for this decision.

Prior to, and following 31 March 2008, ECCA began to receive reports from many more members about announcements by their commissioning authorities of nil increases or below inflation-rate increases in fees for the next financial year.

It soon became apparent that this was a national issue and that funding for both residential services for older people and adults with learning disabilities and long-term conditions was being offered at unacceptable levels.

On 18th of March 2008, in reply to a Parliamentary Question on local authority funding, the Minister for Care Services, Ivan Lewis said “it is difficult to justify zero per cent increases when everyone knows that, at the minimum, care providers must take account of inflation”.
Clearly, there is no justification for denying care providers an inflation rate increase.

On this basis, ECCA decided to embark on a fees campaign in order to:
• Raise awareness of the unacceptable fee levels which commissioning authorities have been offering residential care providers
• Challenge publically the way in which many local authorities and PCTs have effectively ignored clauses in contracts which guarantee annual inflationary uplifts to fees.

6. Action Plan

It was decided that ECCA’s fees campaign would consist of the following actions:

6.1 Collation of data

• Compiling a spreadsheet of local authority/PCT percentage fee increase offers to independent residential care providers for 2008-09 in the following categories:
o O%
o 1-2%
o 2-3%
o 3-4%
o 4-5%
• Compiling copies of local authority/PCT offer letters to independent residential care providers with details of percentage offer and reasons for nil or below inflation rate increases. Examples of offers and justifications are presented in Appendix 1.

6.2 Writing to Chief Executives of Local Authorities/PCTs

Letters from Martin Green, Chief Executive of ECCA, were sent to all local authorities and PCTs on the list. To date, 106 letters have been sent. In order to respond effectively to the particular justifications authorities were making for their offers, the letters referred to, and disputed, specific points in the offer letters.

A common theme that emerged through the offer letters was reference to the need for local authorities to make ‘efficiency’ savings in line with the Gershon Review. However, as ECCA has pointed out in its correspondence, the Gershon Review concluded that efficiency savings were to be made in order to ‘release money to frontline services’ by taking it away from systems.

It is clear to ECCA that authorities have either misunderstood Gershon or are deliberately misrepresenting his views in order to justify their flawed decision making which seems to take money from direct services in order to sustain bureaucracy. ECCA noted in its letters to Chief Executives that that however bad their financial position is , it has not stopped them from giving inflation rate increases to their own staff or putting money in their pension funds. (See Appendix 2 for more information on the Gershon Review).

Another justification that authorities have made for freezing, or offering below inflation rate rises to providers has been what they perceive as a ‘windfall’ that providers have received in terms of moving from three RNCC bands to one.

This move will eventually lead to providers suffering a financial loss and any gains will be short term and part of the transition. The public sector is awash with transitional funding, yet it is denying this to the people who provide services. It seems that local authorities are prepared to take Government handouts for their own transitions, but they are denying service providers the same opportunities. The double standards of the public sector are quite staggering.

6.3 Collating responses from local authorities and PCTs

To date, 38 responses to ECCA’s letters have been received and many commissioning authorities are refuting that they have offered nil or below inflation rate increases to residential care providers.

The justifications, half-truths and manipulated statistics that are at the core of many of these letters indicate that there is no proper or coherent justification for nil or below inflation rate increases and that the minopsomy power of commissioners has translated into a naked ‘mite is right’ approach.

Many responses also continue to cite the need to make ‘efficiency savings’ as justification for offering inadequate fee levels. It is easy for local authorities with their huge oncosts, over-overstaffing, pension fund contributions and the plethora of other system-related costs to find efficiency savings. For lean organisations, such as independent care providers, efficiency is at the centre and core of their business and they have delivered all the savings that are possible.

The process of collating responses to ECCA’s letter is ongoing and ECCA plans to keep corresponding with authorities in order to put pressure on them to revise their offers and accept that residential care providers cannot continue to offer quality care services to their residents unless they are appropriately funded.

6.4 Letters to the Opposition

Letters to Opposition leaders in local authorities, accompanied with this briefing paper on the fees campaign have been written in order to raise awareness of local authority disregard of contracts with independent residential care providers and to apply political pressure on Chief Executives to revise fee offers.

6.5 Letters to local, national and trade press and other media activity

Letters to local, national and trade press editors, accompanied with this briefing paper on the fees campaign, have been sent. Further to sending this briefing, ECCA has been relentlessly raising the issues involved in this campaign in its columns and press statements. Examples of ECCA’s media work thus far are presented in Appendix 3.

6.6 Lobbying National Government

Over the coming weeks, the Minister for Care Services, Ivan Lewis and the Director General of Social Care, David Behan, will be presented with ECCA’s evidence of local authority/PCT fee offers to independent residential care providers. The evidence will be accompanied with a summary of ECCA’s methodology in this campaign and its findings. The presentation to the Department of Health and the Minister will include recommendations for action in bringing about a revision to fee offers to, at a minimum, meet the current All Items Retail Prices Index (RPI) which is currently 4.1%. ECCA is also lobbying Government to make a commitment to ensure that commissioning authorities cannot behave in a similar fashion in the next financial year.

7. Summary

Inadequate fee increases by local authorities and PCTs to independent residential care providers is a perennial issue and one that ECCA is very familiar with. This year, however, has seen particularly inadequate and often contractually unlawful nil and below inflation rate increases.

The tone and manner in which offers have been made to providers has been patronizing and stark in its content and many providers have been firmly warned that quality must not be compromised, with no increase in fees offered to allow such quality to be sustained and to flourish.

At the same time that this has become a reality for care providers, the Government have been raising expectations and developing a range of strategies such as the Workforce Development Strategy, which are totally undermined by the behaviour of commissioning authorities, who commission services at unrealistic funding levels.

Nil and below inflation rate increases to residential care providers is symptomatic of a system which has failed to prioritise. The simple fact is that local authorities have been given increases in funding from national Government, but have failed to pass on that funding to the people who strive to care for some of the most frail and vulnerable members of our society.

8. Call for Action

The King’s Fund report on the funding of mental health services has identified dementia as one of the biggest challenges for the future. ECCA believes that if commissioning authorities and the Government invest in residential care now we will have a system fit for the future, but if the Government and local authorities abdicate their responsibility to offer fair funding for the sector, they will be neglecting both this generation and the next.

The solutions are realistic and affordable, and ECCA challenges the Government and commissioning authorities to deliver the following:

• Apply independent costs of care models to all care services

• Give independent care providers access to improvement initiatives and money

• Establish the true costs of quality care as the basis for the Green Paper discussions

• Ensure that world class commissioning is implemented and services are commissioned for quality not low cost

• Honour contracts and partnership agreements with the sector

• Prioritise spending on care services rather than bureaucracies and systems

• Ensure that Government rhetoric becomes the basis for commissioning authorities’ practice

English Community Care Association
May 2008

Appendix 1: Local Authority/PCT offers to
Independent residential care providers

In order to understand what explanations local authorities and PCTs were offering to justify nil and below inflation rate fee increases and in order to compile evidence of percentage offers, ECCA looked at correspondence from authorities.

The letters revealed a diverse range of communications and this appendix aims to provide a snapshot of some common themes, and to illustrate the unacceptable manner in which authorities have reneged on contracts with residential care providers. This appendix also aims to ‘name and shame’ some of the worst examples of poor partnership working with the independent sector.

Quotes from local authority letters to residential care providers:

“The financial pressures on the Council are great given that funding from central government has been cut in real terms, demands on services continue to increase, and there is only limited scope for raising council tax. The Council is also required to make efficiency savings of 3% per annum across its services. With this in mind, we will not be awarding an inflationary increase in 2008/09 for services. Once again I would like to reiterate our continued commitment to your organisation”.
Surrey County Council

“The Council is facing severe financial difficulties for 2008/09 and is seeking your assistance in securing efficiency savings in line with Government expectations... Obviously, we want to minimize the pressure on our partners with whom we have established mutually beneficial relationships over many years and which we wish to continue in the future. This is an unprecedented measure but one which is unavoidable in the current financial climate. We are asking all providers to try and identify efficiency savings to reduce your fee levels charged to the Council. As a minimum, we cannot increase fees next year but we invite providers to identify other opportunities for efficiency gains which we can jointly implement”.
London Borough of Brent

Note: In its letter to Brent Council, ECCA pointed out that the council’s assertion that it is facing severe financial difficulties does not exempt it from honouring contracts, and it could be said that the council’s actions have placed providers in severe financial difficulties. ECCA asked if Brent Council will, therefore, accept this as an excuse for providers to reduce their business rate payments.

“Because of the extreme financial challenges we face, we are also requiring service providers to achieve efficiency savings of 2.5% on the 2007-08 fee. This will mean a net nil increase in your current fee”.
London Borough of Southwark

Note: In its letter to Southwark Council, ECCA pointed out that the situation in Southwark is very clear in that the council has a contract with providers which specifies that it will increase fees by the rate of inflation. By failing to do so this last year the council is in breach of contract. ECCA said that Southwark Council seems to believe that it lives in a different world to the rest of us when it can rip up contracts and see itself as above the law.

“We propose to set fee increases at 0% for 2008/09. This brings us in line with other London authorities who will be offering 0% and who may have previously offered 0%”.
London Borough of Merton

Note: Do readers sense a hint of collusion? In its letter to Merton Council, ECCA said that using the excuse of other local authorities giving a nil increase cannot save Merton from the responsibility it has to vulnerable people and this authority is behaving in an unacceptable way and it has clearly shown that the needs of service users have a low priority over the needs of the council’s own internal system.

“In future years most contracts will not be subject to an annual decision on inflationary uplift”.
Rotherham Metropolitan Borough Council

“This year KCC have decided not to increase the contract prices for Nursing Care Homes. This decision has been taken in the light of the Government's decision to change the RNCC from October 2007. The DH advised that it was not the intention of Government for this increased contribution to result in an increase of gross fees to nursing care homes”.
Kent County Council

Note: ECCA’s letter to Kent County Council refuted the RNCC point. ECCA clarified that the RNCC band was not increased; what the Government did was move to a one-band system and this was designed to have a nil increase over time. ECCA informed Kent CC that it is clear that the council misinterpreted the Department of Health’s position and adopted a position based on this year’s figures and not on the long term implications of the changes to a single RNCC band.

“Your co-operation in accepting this will be welcomed and will greatly assist our ongoing partnership and our ability to maintain the current level of placements with your organisation”.
London Borough of Greenwich

“I write to advise you of the consistent approach agreed by all the London PCTs to inflationary increases. We are continually working to improve the quality and efficiency of our services within the boundaries of existing budgets; we anticipate a similar level of commitment is being deployed by our providers. In line with this we do not anticipate awarding any inflationary increase to the cost of services over the next financial year 2008/09.

I wish to reiterate that Richmond and Twickenham PCT is also clear that it will not accept any compromise in the quality of services provided to patients”.
Richmond & Twickenham PCT

Note: This approach is totally unacceptable and the PCT should follow its own advice, and just because they do not have as much funding as they want from Government, they should honour their contracts and obligations, and providers should not be penalised because Richmond & Twickenham PCT failed to make a good enough case to Government for more money.

“As the Council and the PCT have been required by central government to make efficiency savings over a number of years they have now decided to apply a similar requirement to service providers. This efficiency saving will be set at 1% for 2008-09. We are keen to hear of innovative ways of delivering efficiency savings so that these can be shared across the provider community”.
London Borough of Newham

Note: In its letter to Newham Council, ECCA said it could find many innovative ways for Newham to deliver its 1% savings, by perhaps giving a nil increase in salaries to all non-service delivering staff and cutting pension contributions across the council, thereby releasing significant funds that will support the delivery of services rather than cushion the council’s own system.

“We are aware of the challenging nature of the general economic situation and that our maximum increases over the next two years will not provide more than the most basic cushion against rising costs. However, we are introducing and further developing a number of measures that will reduce your administration costs in dealing with us”.
Royal Borough of Kingston upon Thames

Note: In a letter to Kingston upon Thames, ECCA noted the council’s comment that it will be introducing further measures that will reduce its administration costs. ECCA pointed out that the reality is that in any authority that was efficiently run these measures would have been in place and it seems to us that care providers are being used as the excuse for the council’s incompetence and inability to have efficient administrative systems.

“The Council recognises from the comments, and from discussion between Council Officers and Homeowners that care homes are facing very considerable cost pressures and that the Council's indicative settlement would be difficult for the care homes sector. However, the Council must make efficiency savings of £25m over the next three years to achieve a budget balance, £9.8 million of which needs to come from Adult and Community Services”.

Worcestershire County Council
Note: In writing to Worcestershire County Council, ECCA pointed out that Worcestershire, like all other authorities has received an increase this year from Government to cover inflation and this authority should be placing that money where it can make the biggest difference to service delivery. ECCA said that, if required, we can come up with a range of cost saving measures that will deliver huge savings for the residents of Worcestershire without any impact on service delivery. This includes a nil increase for all non-service delivering staff and a review of the pension contributions that are being placed into the staff pension fund.

“All older persons' care homes will receive a 1.35% increase with effect from April and the council will then allocate payments totalling £3m to care home providers that are able to demonstrate high quality”.
Nottinghamshire County Council

Note: In its letter to Nottinghamshire, ECCA said the council is confusing the issue of a quality premium with an inflation rate increase. These two are very separate issues. Quality premiums should be paid on the basis of a true costs of care model and this model should be increased in line with inflation and quality premiums should be an add-on to the inflationary rate increase.

“You will be aware that local authorities are required to secure efficient services that provide sound value for money year on year. During 2008/09 Essex County Council will be making significant resources available to develop and secure quality across the social care market. This initiative will support training, business development, recruitment, specific grants for workforce skills and improving infrastructure”.
Essex County Council

Note: Essex County Council’s offer of just 2.28% was a particularly cynical offer in that the Council has clearly selected an index to quote that produces as low an uplift as possible. In 2005 the Council and providers agreed to a five year contract with the written promise that although the current price uplift mechanism was based upon All Items Retail Prices Index (RPI), “as part of the new approach to prices and to ensure that the uplift is fair and continues to secure capacity”, it would consult with Independent Providers Strategy Forum, for an appropriate mechanism of determining the uplift for future years. No consultation has ever taken place and in April 2007 when RPI was reported at 4.6% the Council increased its prices by 2%. The April 2008 increase should be at least 4.1%. It is very concerning to note the blatant disregard by many councils to their contractual responsibilities.

In its response to Essex County Council’s offer, ECCA pointed out that the council engaged in a contract with providers which it has broken. ECCA said that this council has proved itself in this act to be both unscrupulous and unreliable as well as in breach of contract.

In a similar another letter to Staffordshire County Council, ECCA, noted that Staffordshire council has stooped to paying discriminatory lower rates for existing residents and this practice has been ruled to be unlawful in Bolton. ECCA said that it is our view that the council must pay the true cost of care and place the needs of vulnerable people before its own structure. This year, Staffordshire has offered providers a 2.5% increase based on already discriminatorily low fees.

“Barnet Council does not believe that efficiency savings should be made at the expense of quality and we are committed to working in partnership with providers to deliver high standard care and support services for Barnet residents”.
London Borough of Barnet

Note: ECCA stated the following in its letter to the council: “Barnet Council’s statement that efficiency savings should not be at the expense of quality is as banal as it is ridiculous. The plain fact is that inflation rate pressures mean costs increase and unless the council pays for these increases then quality of service is bound to suffer. Barnet Council’s statement that they are committed to working in partnership with providers is not evidenced by their action in setting the rate for care”. In a reply to ECCA’s letter, Barnet Council has once again reiterated the same argument: “There is an expectation on the part of central Government that continuing efficiencies should be delivered through the use of public resources... I am afraid that with the Gershon efficiency requirements and the limited government increase we feel that the fee increase offered [2%] is fair”.

“Whilst the Government grant settlement for Hampshire means that the County Council will receive the second lowest grant per head over the next three years, the price to be paid to homes will exceed the Council’s contingency provision for inflation of 2.26% significantly for Older Persons dementia provision and nursing care. Also the reduction in grant has again occurred during a period when financial pressures are rising because of the demographic trends and the Government's drive for year-on-year efficiency savings of 3%. It is hoped, therefore, that homeowners will appreciate the priority being given to increasing homes' baseline funding levels”.
Hampshire County Council

Note: It is interesting to point out that Hampshire County Council are offering below inflation rate fee increases to independent residential care providers, yet at a time of financial pressures due to demographic trends and efficiency savings, Hampshire can afford to budget £60m to build 500 beds of its own provision, and assuming an interest rate of just 6%, interests costs alone would work out at £138 per bed per week.

“There remains an underlying need for the council to make efficiency savings as detailed in the previous correspondence. While it is recognised that 2.64% does not meet the prevailing level of inflation or some of the specific cost pressures facing the sector, we believe it does represent a reasonable compromise that is affordable for the Council, contributes towards the required efficiency savings, and also maintains the rates paid at the upper end of the scale in comparison with neighbouring local authorities.
St Helens Metropolitan Borough Council

Note: In its letter to St Helen’s, ECCA said that it appreciates the difficulties that St Helens is facing, but that the increase that is being offered will not cover inflation rate increases. ECCA said the council’s comment about paying the upper end of the scale in comparison with its neighbouring authorities does not detract from the fact that neither they nor St Helen’s are paying the true cost of care.

ECCA is aware that Northumberland Care Trust has behaved particularly badly because they have broken legally binding agreements with their providers and behaved with total disregard for partnership working and in contravention of the law. The Trust has now placed itself in a position where it will be spending large amounts of taxpayers’ money defending the indefensible through the courts.

This money should be directed at delivering care services. The behaviour of Northumberland Care Trust has been appalling and owes more to 19th Century relationships than 21st Century partnerships.

All of the above quotes and notes identify the mismatch between central Government policy and the reality of working with local government. ECCA calls on central Government to use its levers of power to force local authorities to behave appropriately and if the Government and Department of Health is unwilling or unable to deliver centralised policy, it raises the question: why are we spending so much money at the centre?

Appendix 2: The Gershon Review

Overview

Sir Peter Gershon was asked by the Prime Minister to review Public Sector Efficiency and he reported on his findings in July of 2004 in the publication Releasing Resources to the Frontline: Independent review of public sector efficiency.

As a result of this review the then Prime Minister, Tony Blair, asked a range of public bodies to produce efficiency savings on the basis of the approach taken by Gershon.

The report is available to download here:
http://www.hm-treasury.gov.uk/media/C/A/efficiency_review120704.pdf

Outcomes of the Gershon Review:

• The report was to start a debate on public sector efficiency
• The objective of the Review was to release money from systems and to put it directly into front line services
• The report concluded that savings were not to be made at the expense of service delivery and money saved through efficiencies would go into front line services

Specific Points

Page 3: Foreword
Gershon explicitly said in his Foreword to the Review:
• “Cost savings should not be at the expense of service delivery”
• “Resources released should go into front line services”

Page 18: 2.2
• “ Improve the quality of support to the private sector through better targeted business support and research”

Page 28: 3.30
• “Improve stability by moving to longer-term multi-year funding arrangements”
• “Make further progress towards full acceptance of the principal of full cost recovery, ensuring publically funded services are not being subsidised by charitable donations or volunteers”
• “Streamlining and rationalising, monitoring, regulatory and reporting requirements”

It is clear that the Gershon Review is not about cutting spending on services, though many authorities are using Gershon as justification for not awarding inflation rate fee increases.

In response to letters from authorities who have used Gershon as justification for cutting costs, ECCA inserted the following paragraph into the letters we have written:

“We note that your authority has used the Gershon Review as its justification for making its funding decision. I want to remind you that Sir Peter clearly identified in his Review that Gershon savings were to be made in a way that released money from the system and put it into the service.

It is clear that you have either misunderstood Gershon or are deliberately misrepresenting his views in order to justify your flawed decision making which seems to take money from direct services in order to sustain your own bureaucracy. I note that however bad your financial position it has not stopped you giving inflation rate increases to your own staff or putting money in their pension funds”.

Appendix 3: ECCA Fees Campaign Publicity

The issue of local authority and PCT underfunding of independent residential care is perennial, and ECCA has long been lobbying against poor settlements with each new financial year. This year, ECCA’s campaign on fees has consisted of direct correspondence with commissioners and highlighting the issue in the media. This appendix presents a snapshot of some of ECCA’s media work.

Green on Green.
Martin Green’s bright ideas for the Green Paper

“I think we have to go back to the very beginning and start our discussions [on the Green Paper] with a real and comprehensive analysis of what is required to deliver high quality care that is fit for the 21st Century... there has been a mismatch between the aspiration raising that has come from central Government and the delivery at a regional and local level... none of these aspirations can be achieved on the current levels of funding, or indeed in a context where local authorities talk endlessly about quality but commission on price...

This has been brought home to me in the recent funding round, where many authorities have offered no increases to service providers and, to add insult to injury, have informed the provider of this news in letters that go on to say they expect higher quality services and no reduction in the level of care but they are not prepared to pay for it.”
Care Management Matters, June 2008

There may be trouble ahead (Martin Green column)

“All in all this is not going to be a happy year. In terms of the care sector it is going to be one of the toughest for a long time. Already we have seen a raft of local authorities and PCTs who have issued nil increases for care home fees. And this comes at a time when the sector is suffering not only inflation rate rises, but also the added burdens of increased holiday entitlement and increases in the minimum wage...

Another very difficult issue that has raised its head recently is the advent of the local authority that has made long-term agreements with its providers and has then unilaterally broken them. This requires the providers to engage in expensive legal processes, the cost of which comes off the provider’s bottom line, but is funded by the taxpayer for the local authority. Businesses will be amused to learn that many local authorities have written to me giving as their excuse for nil increases the fact that they can’t afford to increase care costs. However, they still expect to get the service – wouldn’t be lovely if we could all live in their economy where we couldn’t afford something, but still expected to get it? I wonder how they would react if providers used this excuse not to pay their business rates.”
Health Investor, May 2008

When the talking has to stop (Martin Green column)

“At a time when providers are being told that there is not enough money to give them inflation rate increase, Neil Glass in his book ‘Squandered’, has exposed that there’s plenty of money but it’s all in the system and not the service. I have been interested to read some of the letters that have been coming from these whining local authorities about why they cannot pay inflation rate increases. We have heard excuses that they have not got enough money but they have had increases in their grants from Government.

However bad the situation is, it does not seem to stop them giving themselves inflation rate salary increases of indeed heaping more burdens on an already overburdened taxpayer. It is staggering to note that every household will see a £112 increase in tax this year to pay for public sector pensions. Talk about the wages of failure. These people are living the life of Riley, retiring early and the rest of us will be working until we are 75 to pay for it.

As for the excuse that local authorities cannot afford any increase I suggest we all write a similar latter to them when our council tax bills hit the mat. I wish I lived in the same economy as the local authorities where I could wander in to any provider or select any commodity and explain that unfortunately I cannot afford it, but I want it anyway. If this sounds ridiculous that’s because it is, yet it’s exactly what local authorities are getting away with”.
Healthcare Business, April 2008-05-26

Is Government under-funding or local authority budget mismanagement responsible for the squeeze on eligibility criteria?

As part of a panel of writers, Martin Green said “Local authorities need to learn to prioritise. They need to think through their approach and integrate other budgets to ensure they are being brought to bear on social care. In all the debates on affordability, LAs never ask whether they can cut their indexed linked pension contributions, or staff salary increases. Faced with financial difficulties they always revert to protecting themselves and their structures whilst cutting back on the support to citizens and services.

I recently heard of an authority that unilaterally ripped up an agreement with providers stating that they couldn’t afford the services at the agreed rate. What sort of parallel universe do these people inhabit?
Care Management Matters, April 2008

This is going to be a difficult and pivotal year (Martin Green column)

“In recent months we have seen some appalling behaviour by local authorities in the north of England who have made agreements with providers about using a costs of care model and have now decided unilaterally to break the consensus that existed between the commissioner and the provider.

Organisations like the Northumberland Care Trust have shown themselves to be totally incapable of engaging in proper partnerships. They believe that life is one-sided and the world should dance to their tune.

As always, faced with a difficulty the public sector reverts to type. It protects its system at the expense of the service. It’s time people reminded the likes of Daljit Lally (Adult Services Director of Northumberland Care Trust), that their responsibility is about delivering services to vulnerable people and that the priority for expenditure should be just that and I’ll believe the financial crisis is real when things such as the index-linked pension contributions and staff salary levels of officers in these authorities are on the table for cuts”.
Caring UK, April 2008

CSCI Star Ratings

On the publication of CSCI’s star ratings for care homes, Martin Green said “we will be monitoring whether or not commissioners make their decisions based on quality or price and it is our hope that the CSCI will use this information to challenge poor commissioning decisions”.
Brunswick’s, 17 May 2008

Independent Safeguarding Authority

On the subject of the introduction of the ISA, Martin Green said “the fact that the ISA is not integrated with registration of the workforce and carries a significant extra cost that stands little chance of being funded by commissioners is of great concern to the sector... this year, many authorities are totally unjustifiably giving 0% increases to providers and this is a real terms cut and not we see even more costs being heaped on the sector. This cannot go on forever. The Government must acknowledge the costs of its plans to protect residents and deliver this to providers”.
Community Care Market News, May 2008

Registered Nursing Care Contribution (RNCC)

On the delay on this year’s announcement of the RNCC, Martin Green said “the position with the RNCC is quite shameful. Given that we also have problems with the change to the new RNCC band, and the appalling behaviour of local authorities who have tried to claw back money from providers, this is another example of a lack of leadership from the DH”
Community Care Market News, May 2008-05-26

Minimum wage impact
On the subject of the minimum wage, Martin Green said “I welcome the increase, but I want it funded by the commissioners. If you increase a cost, you have to transfer that the people who are paying for the service. I want local authorities to live in the same economy as the rest of us. Take Sainsbury’s, for example. When the minimum wage goes up customers effectively have an increase in the commodity price. That is the basis of an economy that works on supply and demand. Local authorities think they are somehow outside that and they can heap on extra costs but not pay for them”.
Care Management Matters, May 2008-05-26

ECCA is not alone in raising the issue of under-funding of residential care by local authority and PCT commissioners. Many other organisations have been raising this issue in the media. Noteworthy is the following excerpt from the Editorial of Brunswicks’ Healthcare Review, 17 May 2008:

“For too long the care sector has listened to central Government say that it provides plenty of cash to pay for social care, to provide for training blah, blah, blah. On the other hand we have listened for too long to local councils assert that they simply don’t have enough cash to pay much for care.

The Government is correct. Plenty of cash has been delivered by Government to council to pay for care; however, councils choose how to spend it. They generally decide to ‘redirect’ that cash to other uses. Some councils have decided that it is not appropriate to provide any increase in the payment it makes for care, notwithstanding all the costs forced on care providers by Government, such as extra holidays for staff, increases in the national minimum wage etc. etc. etc. Not to mention other increased costs such as heat and light! Providers will, however, also need to improve care etc. as part of the bargain.

It is high time that a careful consideration is given to ring-fencing of payments for social care. Without it, some councils will continue to cheat.”
Keith M Lewin, Brunswicks’ Healthcare Review, 17 May 2008