Community Care: The Care Act 2014 places new responsibilities on local authorities

From April 2015, councils will come under a duty to provide information and advice to people in their areas to enable them to plan for their care and support, including in relation to how they can benefit from independent financial advice.

A year later, the cap on care costs will come into force, enabling self-funders to receive state-funded care and support after accruing a certain level of cost, as measured by what the local authority would have spent on meeting their needs, calculated through regular assessments. 

At the same time, in April 2016, councils will come under a duty to arrange residential care for people who are not eligible for any financial support from their authority but ask the council to make arrangements for them. This duty comes into force a year earlier – in April 2015 – for non-residential care, though its biggest impact will be in the residential sector.

It seems the most relevant information a local authority could provide to its citizens, under the information and advice duty, are the rates at which the council can procure services for them – which is often substantially less than what a self-funder would have to pay. This information will become available to anyone assessed for the cap in any case from April 2016. And the duty on the council to arrange care, regardless of a person’s financial status,will give self-funders the power to have care arranged at council-procured prices, in return for an administration fee. This could potentially save people hundreds of pounds a week in care home fees.

The cost survey and negotiations service undertaken by Valuing Care for councils has highlighted self-funders who arrange and pay for care themselves, with no or little state support, pay a far higher price for a service than their local authority pays for the same service.

This may be a known fact in the market but the evidence from these cases is that this goes way above the expected 10% additional costs attributed to dealing with a number of single individuals compared to one council. Price discrimination between rates offered to councils and those offered to private citizens sometimes rises to 50% more for the same care.

For example, Valuing Care recently heard of an example of a person funded by a council in a care home at £650 per week. When the older person’s home was sold and they had sufficient means to pay for their own care, they became a self-funder charged £1,050 per week for exactly the same bed and facilities.

The local government funding squeeze has exacerbated the problem as councils choosing not to inflate their fees has encouraged providers to apply above-inflation increases to their self-funding residents who are signed up to the providers contract, under which they have limited or no protection.

The reforms coming into force in April 2016 – the care cap and the duty to arrange care for self-funders – create a ticking time bomb for authorities that would be better defused now. For councils that are prepared to grasp the nettle there are options to deal with the market issues. These include:

  • Conducting their own validations of Older People’s residential costs to get to the bottom of the problem and increase transparency.
  • Providing information and advice lines that provide much more than general signposting and support services.
  • Market managing current vacancy rates and mapping supply to the needs of individuals.
  • Providing direct advice and support on how to get the best price for their care, not just how to best fund it.
  • Providing simple contract support for self-funders through standard contracts.
  • Providing readily available and competitively priced alternative support packages in the community through proactive contract management.
  • Brokering preferred supply deals for self-funders with willing providers.

Acting in the financial interest of self-funders requires a significant change of thinking within councils who have historically overlooked their financial interests, whilst at the same time benefitting from the cross subsidisation of council funded residents. Councils embracing the new act should be recognising the enormous financial benefit they may be to their self-funding residents, and putting in place the necessary systems and processes to act on their behalf. It will be interesting to see which councils are ready and willing!

9th December 2014