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Issue - decisions

Maintaining a Stable Adult Social Care Market

18/03/2022 - Maintaining a Stable Adult Social Care Market


The report sought approval for the recommended increases in fee rates for Council contracted and framework independent sector care homes, home care, extra care, supported living and day activity providers in Sheffield for the financial year 2022-23. The report also sought approval for the recommended increase in Direct Payments for people who choose this means of arranging their own care and support. The report set out the process that the Council has followed and the analysis that informs the proposed fee rates to ensure a sustainable, quality and diverse social care market. The report also outlined the ambitions of the Council to deliver long term transformation in the city’s care




RESOLVED: That Co-operative Executive:-



1)    Approves an increase to the fee rate for day activities and standard rate care homes of 3.13%;


2)    Approves an increase to the fee rates for home care, extra care (care element only), and supported living on the Council’s standard contracted and framework rate and to direct payment providers of 3.14%;


3)    Approves an increase for non-standard residential care rates that are individually negotiated and for council arranged respite care of 3.13% subject to contractual compliance;


4)    Approves an increase to the personal assistant rates used by people in receipt of a direct payment of 3.15% plus the cost of the Employer Pension Contribution (individually applied and total budget pressure not exceeding budget);


5)    Delegates authority to the Executive Director of People in consultation with the Director of Adult Health and Social Care and the Director of Integrated Commissioning and the Executive member for Health and Social Care to agree any appropriate and proportionate fee increases requested by care homes outside Sheffield because cost pressures will vary from place to place; and


6)    Delegates authority to the Executive Director of People in consultation with the Director of Adult Health and Social Care, the Director of Integrated Commissioning and the Executive Member for Health and Social Care to take all other necessary steps not covered by existing delegations to achieve the outcomes outlined in the report.




Reasons for Decision




In order to develop and maintain a stable adult social care market in Sheffield the Council need to ensure that the fees paid by the Council to providers for adult social care in the city of Sheffield are increased in line with the cost of delivering care in the city including inflationary pressures in 2022/23.




The impact of the pandemic and the wider economic climate on the adult social care sector is ongoing and the Council will continue to monitor the costs and pressures facing each type of care provision to support a sustainable, quality and diverse market during a very challenging and volatile time for providers, for people who use services and for the Council and wider health and social care system as commissioners. The challenges facing the Council and the Care Market will require ongoing and dynamic risk assessment over the next 12 months




Alternatives Considered and Rejected




The Council has reflected on the feedback and the challenges facing the care market and acknowledges the wide range of pressures and variable factors that impact on the cost of delivering care in the wake of the pandemic, changing grant context and the impact of inflation.


The Council is also facing similar challenges compounded by long term and ongoing erosion of funding from Government. The Social Care levy on National Insurance will not provide additional investment in social care in the next few years as the initial funding generated will be deployed by Department of Health and Social Care to fund the NHS response to tackling waiting lists and health impacts resulting from the pandemic.


These challenges mean that a higher fee increase would significantly negatively impact on the Council’s ability to deliver other social care services at a rate of more than £1m per additional percentage point increase in the fee rate.


The Council has necessarily had to consider a lower fee rate increase in the context of proposing a Council budget for 22/23 that is balanced by use of the Council’s reserves, cuts to other services, ambitious savings plans across all areas of the Council and the Council’s difficult decision to increase council tax, including the Adult Social Care precept. The Council has had to balance the extra costs to Sheffield taxpayers from the increase, with the need to protect its social care services to its most vulnerable residents. Further information on the Council’s budget position can be found in the February report to Cooperative Exec published online.


The feedback from providers and the analysis of the cost of care and the current care market has highlighted that a lower fee rate than the one recommended for approval in this report would present too great a risk to the sustainability of the care market.




The Council has considered whether to adjust the care home fee to reflect lower occupancy levels. This option has been discounted however on the basis that there has been a gradual improvement in occupancy levels for a significant proportion of the care home market and some market contraction will be required.


A more targeted intervention will ensure that market reshaping is safely managed and protects the balance and continuity of care for those who need it in the city. Adjusting care home fees to reflect average occupancy levels would have very different implications for homes depending on their occupancy with some gaining and others still struggling to achieve viability. A targeted approach enables the Council to intervene to ensure that the inevitable risks associated with the contraction needed to achieve a balanced and sustainable, diverse and quality market can be best mitigated during a period of unprecedented market volatility.




Any Interest Declared or Dispensation Granted








Reason for Exemption if Public/Press Excluded During Consideration








Respective Director Responsible for Implementation




Executive Director, People Services




Relevant Scrutiny and Policy Development Committee If Decision Called In




Healthier Communities and Adult Social Care Scrutiny and Policy Development Committee