Cost of Care Exercise

What is the Cost of Care Exercise?

In 2022, the Government announced new reforms to adult social care. These reforms included a commitment to cap the lifetime spend on care for individuals and a commitment to achieve a fair price for care.

Local Authorities were required to undertake a Cost of Care Exercise, where they would speak to local care providers and ask them to tell the Local Authority what a reasonable cost of care looks like for them.

By gathering a range of responses from different care providers, this would enable the Local Authority to identify the median cost of care for their authority area, which in turn would be used to inform future national financial settlements for adult social care.

The Cost of Care Exercise was divided into two parts, the cost of care for people placed in care homes for older people and the cost of care for providing home care for adults over 18 years of age.

Other services such as supported housing, day services and extra care housing were excluded from this exercise.

How did Suffolk complete the Cost of Care Exercise?

Suffolk County Council used an independent contractor called PeopleToo to conduct the Cost of Care Exercise.

PeopleToo gathered care cost information directly from eligible care providers and used this to complete a template developed by the Local Government Association.

Due to a good response from providers, the council is confident that the figures contained in these reports are a reasonable representation of the average costs incurred, and prices charged, for care in the two categories assessed.

However, limitations around the Cost of Care Exercise remain, including the differences between providers, their size, and the complexity of the care they provide on an individual basis.

It is important to remember that the costs of care calculated is an estimate of a median range, and actual care costs may vary.

Did the Council amend the figures?

The Council did not seek to make amendments to the median cost of care figures with one exception; an adjustment to profit, return on investment or return on capital (for care homes), that was fixed at 5% each.

This adjustment was made to reflect the significant range of figures submitted in these areas by providers for which a median average would not be a meaningful reflection of the overall business model.

What is the Cost of Care for Suffolk?

For care homes for older people, the median weekly costs of care in Suffolk were calculated to be:

What has Suffolk County Council done to move towards paying the cost of care?

In October/November 2022, the Council used the interim funding from the Government for the cost of care (£2.2m) to increase prices paid for care for eligible providers; care homes for older people and home care.

The money was used to target areas of highest concern. For example, homecare and in particular the lower-level rates where sourcing care was proving increasingly difficult in some areas.

The funding was split 60:40 between homecare and residential nursing. For home care, the locality rates were increased by 8% for the lowest rate reducing to 3% for higher rates. The inflationary costs for all care beds was recognised by paying a higher percentage increase of 5% for the standard rate to give them more money per bed space and 2.5% for the Enhanced rate.

The Council, from its own resources, funded a £2m non-recurrent in-year uplift at the same time to other care services it purchases, such as day services, supported housing and extra care housing.

For the financial year of 2023/2024, the Council has proposed an overall 8.4% uplift to prices. This reflects the changes proposed for Council Tax in that financial year and the impact on the Council’s budget from that. This includes the full application of the adult social care precept of 2%.

In addition, the Council is proposing that the £3.8m is provided to allow the cost of care rises in 2022/2023 to continue permanently in 2023/2024 without impact on the inflation increase, and despite additional grant not being forthcoming from Government due to delayed social care reforms.

As part of the pricing review for the upcoming financial year, the Council will be reviewing the pricing structure for prices paid for older people’s care home placements.

This includes a proposal to remove the standard rate as very few placements have been made in 2022/2023, using this rate but retain the enhanced rate. In addition, the Council is proposing to develop a new pricing model to better reflect the costs of supporting individuals with more complex needs.

The Council will also be reviewing pricing structures for services purchased on behalf of working age adults who access supported housing opportunities for individuals with disabilities and autism.

The council will be publishing a Market Sustainability Plan by 27 March 2023, that incorporates the learning from the Cost of Care exercise and achieve a more sustainable market for all.

We will be refreshing the wider Care and Support Market Sustainability Strategy in 2023.