The Upcoming Care Cap – Why What Councils Pay for Residental Care is so Important to the Metered Rate

The introduction of the Care Cap is less than 2 years away and there have been many headlines regarding its implementation and the different financial ramifications this has for Councils and self-funding residents.

However, one aspect that may have been overlooked so far is the rate that Councils currently pay for residential care and how that is used to calculate the metered rate. If the Care Cap guidance become reality, then an example of a weekly contribution for a full self-funder will be as follows:

Council fee rate – £600
Daily living charge – (£200)
Amount counted towards the Cap – £400

Pretty easy so far……

However, what happens if a self-funder cannot or does not want to purchase a care home placement at £600 per week and instead chooses a different home at a more expensive rate? Then, in that scenario the additional fee above the Council rate does not count and those additional funds needs to come out of their pocket.

Again, this is fair if someone is buying a place in a home regardless of the choice available around them at the Council’s rate. Unfortunately, across a large swathe of the country, self-funders cannot buy a placement near them at the Council’s rate. Indeed, in many places the Councils themselves are having trouble buying at that rate too.

In that scenario the amount that counts towards the Care Cap looks much less fair and could well be open to a deluge of complaints by self-funders across the country. These are the same self-funders that were promised that they would meet the Care Cap when they spend £86,000.

With the Daily Living Charge being set nationally it is likely that the complaints would concentrate on the Council Residential Fee Rate putting the current Council process under scrutiny. 

How is the Council Standard Residential Fee Rate Set?

Most local authorities will have a standard residential fee rate that they will purchasing older people’s residential care already in place. This rate is usually set yearly and ratified at Cabinet meeting each February. In addition, a nursing fee rate is set that is normally the standard rate plus the Free Nursing Care element 

The rate could have been set based on a historical rate that has been uprated for inflation or following a cost of care exercise completed sometime ago. Either way, with the local residential fee rate being so crucial for the Care Cap, this figure needs to be right, transparent and defendable.  

If this local rate is not reviewed thoroughly it may open up the Council to challenge on whether the process was transparent, reasonable and timely. Given the immediacy of the Care Cap implementation, challenges could centre on 2 key aspects

1) Is the residential fee rate truly reflective of the cost of supply in the local market?

A lot has changed within the last few years regarding the cost of supplying care. There have been increases to staff rates, additional regulation, higher utility bills and much more. In many places in the country these costs have affected the sustainability of some providers and this needs to be reflected in the latest fee rate and not rely on a inflation estimate.

To get to an accurate figure It is highly likely that a survey of care home costs will be required. This is the best way to ensure that any local variations are taken into account and fully represented in the local rate. However when conducting a survey it is important that any costs reported are realistic and are truly reflective of the actual costs of providing care. Any template returns need to be scrutinised by experienced professionals with a sound statistical technique applied to any results.

In addition once a survey and the resulting calculations are complete independent benchmark analysis needs to be undertaken to ensure that the figures are within an overall acceptable range. This may be a comparison with neighbouring local authorities. 

2) Can any additional services or facilities by Care Homes over the standard rate be justified?

Even after the standard fee rate is set accurately it is likely that there will be a good proportion of the market’s fees will be greater than the Council rate. If a care home is still above the set rate how can this be set out in a transparent and equitable manner?

Under the Care Act the Council will have the duty to support self funders through this purchasing process and any differences may lead to confusion and anxiety. Council commissioners can help smooth this part of the process by working with private care homes to set out a menu of additional service prices over and above the standard fee rate. These could include:

  • Quantified premiums for larger rooms
  • Staffing levels over and above the standard requirements rates which have been built up through over 50 area wide surveys over the last decade
  • Additional Costs for non-standard facilities
  • Additional Costs for services not normally provided in ‘standard residential care’

Again this could be done as part of the initial survey or call off framework contracts for self-funders could be developed that enable new placements to be bought in a fair and transparent manner. At the moment this is an area that Councils have left to the market. The new duties of the Care Act no longer give commissioners that choice.

The Time to Start on The Care Cap Implementation is Now

When you consider the confusion of self-funders entering the market, the additional workload and the possibility of a large level of complaints arising in 2023, setting up a pre-emptive system to aid self-funders through the Care Cap process is crucial. Valuing Care can help with both key questions above and are currently working with their customers to implement solutions.

Contact us to find out more on what Valuing Care has to offer in regard to the Care Cap.

28th January 2022 | Ray Hart