Health & Care Focus DRIVING LIFELONG PROSPERITY
Spring 2022
SPOTLIGHT ON DOMICILIARY CARE SERVICES
SIGN UP TO RECEIVE OUR BUSINESS UPDATES INSIDE Overview The rates councils paid to home care providers and the number of hours delivered > Conclusion > >
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The Hazlewoods Healthcare team examined the data on fee levels and fee uplifts paid by local authorities in England to home care providers in the last fiscal year.
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Freedom of Information Request To obtain an up-to-date picture of the state of the market, we sent Freedom of Information Act 2000 (FOI) requests to all the local authorities in England. The first set of questions aimed to establish the rates councils paid to home care providers. We requested that each council provide the prices it pays to independent and voluntary sector home care providers for regulated home care services in the homes of people aged 65 and older in the week commencing 24 April 2021 and compared it to the previous year.
We wanted to differentiate between elderly care and specialist care, so we limited the scope of the inquiry to the care of the elderly. We also requested information on the number of hours delivered by the independent sector or the councils themselves.
Overview Adult social care helps older people and working-age adults who need personal or practical care. Adults in England may receive informal care from family, friends, and neighbours or formal care from services paid for by them or their local authority. Social care is means-tested and primarily funded by local authorities: those with eligible needs, assets under £23,250, and low incomes can receive assistance with their care and support costs. Adult social care now accounts for most of the discretionary spending by local governments.
Local governments source these services from a vast and varied market. According to the Care Quality Commission (CQC), which inspects and regulates home care services, approximately 7,263 providers operated out of roughly 10,735 registered locations in 2020.
A breakdown of domiciliary care locations by region can be found in Figure 1 below: (taken from CQC data.) No. of Locations
Home care (sometimes called domiciliary care) is considered the ’first line’ of social care and is critical to enable people to ‘age in place’ and provide care as close to their homes as feasible. In 2020, almost 814,000 older people in England received home care, with local authorities funding 351,680.
1025
1298
1703
377
1241
1862
1027
East Midlands
East of England
London
North East
North West
South East
South West
Figure 1: Number of domiciliary care locations by region
1231
971
West Yorkshire Midlands & Humber
< £11 / hour < £12 / hour < £13 / hour Findings < £14 / hour
AVERAGE RATES
As Table 1 below shows, for actual fee rates, the average hourly fees paid to external home care providers, weighted for the volume of hours purchased, were £18.68 per contact hour in 2020/2021.
< £15 / hour < £16 / hour
Home care: £ per contact hour
External providers for home care
Local authority average fee 2019 to 2020
£17.54
Local authority average fee 2020 to 2021 actual
£18.68
% increase
6.5%
Number of local authorities with increase (uplift)
141
Number of local authorities with no change
4
Number of local authorities with decrease
5
Number of local authorities with missing/invalid data
0
5.1% £16.34 £15.54
Table 1: Changes in hourly fee rates by external home care providers
Over 90% of local authorities increased average costs paid to external home care providers in 2021 over 2020. On a weighted average basis, considering reported fee rates paid, local authorities stated that fee rates for home care increased by 6.5%. Comparatively, the national living wage increased by 6.2% from £8.21 to £8.72 per hour in April 2020, and the CPIH inflation rose by 1.0% in the 12 months to April 2021.
6.2% £17.26 £16.25
The South West had the highest increase (9.3%), while the South East had the lowest (2.6%). For the few cases where unit costs fell, there was additional commentary which included the following explanations: >
a new Complex Cases Team had identified joint packages of nursing care with health
>
t he local authority’s fee rates had fallen due to variation in demand, intensity, and location of placements
9.3% £21.84
Although inconsistencies in respondents’ calculations may also play a role, the small number of very high uplifts are in some cases described as being driven by the following factors: >
£19.96
paying staff on a shift basis in an area of
high employment >
commissioning of additional capacity
from providers with a higher rate than the prime provider >
increases in enhanced payments for
dementia support
6.1% £18.05 £17.03
8.4% £16.56
HOURS
£15.27
We estimate that councils purchased 2.85 million hours of domiciliary care for people 65 and older in the reference week, equating to an approximate figure of 148 million hours of care per year. As shown in Figure 2, the South West had the most combined hours, while the East of England and Yorkshire and Humber both had significantly more specialist care hours. 8.1%
8,832 Elderly
£18.36
Specialist
17,485
£16.99
17,461
3,080 14,589
17,629
East Midlands
East of England
7,295
4,999
5,368
6,057
10,702
9,844
12,461
11,785
London
North East
North West
South East
35,634
South West
6,116 15,883
16,359
West Midlands
Yorkshire & Humber
Figure 2: Number of domiciliary care hours purchased in the reference week
6.7%
We found that local authorities with the highest average home care prices were generally in very rural areas with low population density, such as in the South West. A possible explanation for this is the significantly longer travel time in such sites than in urban areas or in the South, where tight labour markets exist. Moreover, recruitment is notoriously more difficult in remote rural areas, and some councils recognise this by paying rural premiums, which increase delivery costs.
£19.06 £17.83
COMMISSIONING
6.0% £18.24 £17.20
Our FOI request found that Local Authorities are heavily reliant on independent service providers, the great majority of whom are small to medium-sized enterprises. 100% 80% 60% 40% 20% 0%
80.9%
73.5%
89.4%
97.0%
85.8%
79.8%
87.9%
80.1%
96.3%
East Midlands
East of England
London
North East
North West
South East
South West
West Midlands
Yorkshire & Humber
Independent
2.6%
Local Authority
Direct Payments / Independent Budgets
Figure 3: Composition of service providers by region
£19.45 £18.96
KEY Percentage increase in hourly fees from 2020 to 2021 Average hourly fees paid to external home care providers in 2020 -21 Average hourly fees paid to external home care providers in 2019-20
Conclusion Domiciliary care spending by local authorities is increasing. The rise is attributable to a growth in the number of older adults needing care and the cost of that care.
based on their situations in different regions. But, overwhelmingly, the imperative is to keep the cost of care down.
Now, as demand continues to rise, our latest research exposes the ongoing issues confronting local governments, such as keeping prices under control. For example, councils have deployed various strategies
As a result, councils often offered one set price to the whole market in areas with a steady supply of providers, but in areas with a limited supply of providers (often rural areas), the authorities must pay more.
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