Agenda item

Cost of Living Impacts - Adult Social Care

The Acting Head of Adults Commissioning will be in attendance to provide an update on previously reported issues and their impact on home care, residential care and supported living / extra care.  Sector-wide challenges will also be addressed as part of the update to Members.


The Acting Head of Adults Commissioning and the Contracts Team Lead were in attendance to provide an update on issues previously reported to the panel in October 2022, and how these matters had since impacted upon home care, residential care and supported living / extra care.  Sector-wide challenges were also addressed as part of the update.


Of the issues previously reported, these related to:


-        Home care – fuel costs;

-        Residential care – energy costs, food and insurance premiums; and

-        Supported living / extra care – increased bills for tenants, particularly in terms of energy costs.


Regarding home care and fuel costs, Members heard that the cost of fuel had now broadly returned to the figure seen in December 2021.  Therefore, the pressure specifically in relation to the fuel costs borne by the home care workforce was not as critical as it had been in Summer/Autumn 2022.  It was explained that during that particular time, additional pence per hour had been applied to workers’ payments for a three-month period to help cover the increased costs.  A separate financial support initiative, provided through the Discharge Fund, was also implemented in December 2022 to assist with fuel costs.


Members heard that in terms of residential care energy costs, where providers had previously reported increases of 200-300%, pressures continued to be experienced.  Details were provided in relation to a recent change that had been implemented to the eligibility criteria of the Energy Bills Support Scheme, which allowed some care home residents to apply.  The change in February 2023 allowed for residents to apply for the £400 domestic grant; care home residents fully funded by the Local Authority or NHS were not eligible to apply.


In terms of residential care insurance, the panel was advised that insurance premiums had increased as a result of the pandemic.  It was explained that providers needed to undertake individual risk assessments for covid positive residents; some providers had to refuse whilst residents remained covid positive, which led to potential delays in discharges.  The cost pressures associated with insurance premiums had not disappeared, rather it was other elements of expenditure, utilities for example, that had become more pressurised.


The panel was provided with information regarding sector-wide challenges, which included workforce recruitment and retention issues and market sustainability, i.e., finances. 


In terms of the workforce issues, it was explained that one of the main issues facing the entire care market was the security and stability of its workforce.  The general cost of living crisis faced almost everyone and, as such, factors such as workers moving into other competing sectors, retail for example, did impact the ability to both recruit to and retain the existing workforce.  Similarly, there were workers moving to agencies and, although they remained in the sector, this would inevitably lead to increased costs for local authorities at some stage.  Reference was made to Skills for Care’s ‘State of Care’ report published in October 2022, which reported that on any one given day, there were around 160,000 vacancies across the sector.


Regarding market sustainability, the panel received details in relation to a Department of Health and Social Care (DHSC) Cost of Care exercise currently being undertaken.  It was explained that charging reforms would now be introduced in October 2025.  Reference was made to a significant cost differential for care homes providing services to those aged 65-plus, with less differential for home care.  The local authority was required to develop and submit a market Sustainability Plan to the DHSC, whilst continuing work with the provider market around sustainability.  Further detailed dialogue regarding dual registration would also be carried out.  Local authorities were only being awarded one year (2023/24) of Fair Cost of Care and Market Sustainability Grant to provide an uplift to care providers; Middlesbrough would be providing a significant uplift for the second year running – 10% this year.  It was highlighted that, over the two-year period, the compounded increase would be 19.9%.


During the discussion that followed, Members considered the potential reasons as to why workers may have switched employment to register with private agencies, or indeed left the sector entirely.  Matters such as immediate pay and terms and conditions were discussed.  The panel also discussed rising energy costs, the government Energy Bills Support Scheme and payment of the £400 household grant.


The Chair thanked the officers for the information provided.



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