Integrated Strategic Commissioning

'Commissioning' is the process of specifying, securing and monitoring services to meet the needs of individuals both in the short and long-term. This often involves joint commissioning with both internal and external partners.

We are responsible for commissioning services for children, young people and adults and also public health initiatives. This work includes forecasting demand for services, ensuring quality and market development and operating a robust commissioning and contracting process. This includes providing accountability in our contract processes, ensuring high quality services and delivering value for money. We manage relationships with a large and diverse number of service providers, within the health and social care sector and wider sectors. As an integrated strategic commissioning team, we work with partners to ensure effective commissioning to support the delivery of strategic priorities.

To assist in this, we have developed The local market for children's, adults, public health and housing services (MPS)) which brings together key information about our priorities and upcoming opportunities for the market, including the housing market for children and adults. The MPS does not contain statistical information about all the service user groups that we work with - this information is contained in the County Durham Joint Strategic Needs Assessment (JSNA).

'Fair Cost of Care' process 2022

In early 2022 all local councils were asked by the Government to carry out a survey on the care costs ('Cost of Care') of care homes for older people and domiciliary (home) care services. This was linked to the then planned implementation in October 2023 of national reforms to adult social care funding and the charging regime. Those reforms have since been deferred to at least October 2025, subject of course to any further changes which may occur nationally in the interim period.

In terms of care homes specifically, the national funding reforms would have led to more people being eligible for Council funding than is currently the case. There would be some variation in the impact of this across the different areas of the UK, as the level of assets that individuals have typically varies by region and area. As many care homes for older people charge higher fees to private residents, reforms could have led to financial issues for both care home operators and local councils. Our understanding was that the Government's intention was for the 'Cost of Care' survey to provide an indication of the extent to which fees paid by local councils may need to rise as this change took effect, to help minimise the impact on care home operators. 

The Government had also carried out financial modelling which suggested that some local councils were paying both care home and domiciliary (home) care fees which may not be at a level necessary to sustain the long-term viability of the services. Further information can be found in the Department of Health and Social Care (DHSC) impact assessment on charging reform.

In accordance with DHSC guidance, we submitted the documents required by DHSC on the results of the 'Cost of Care' surveys as well as a provisional 'Market Sustainability Plan' (MSP) in mid-October 2022. We did not share or publish these documents at the time, based on national guidance outlining that DHSC planned to review local council submissions and to engage with local councils to ensure that submissions were covering the required detail and were based on sound evidence, and that DHSC would ask local councils to publish 'Cost of Care' reports at a point following the deadline for submission. We, to date, have not received any feedback from DHSC. DHSC has subsequently advised local councils in late December 2022 that they should publish the 'Cost of Care' reports by 1 February 2023 and the final MSP by 27 March 2023.

These are the Durham care home and domiciliary care 'Cost of Care' reports and the final Durham MSP. As with the draft MSP we have previously published, providers should also be aware that some of the information included may now be of more historical interest, since the Government decision to delay the national charging reforms. Should Government decide to implement charging reforms in 2025 some of this information may again become relevant and we will comply with all national requirements should this lead to further local work. We would also like to clarify that DHSC have indicated that they may still ask some local councils to review the documents which they have submitted, we will keep providers informed should this be the case in Durham.

As explained in the documents, our position is that while the surveys provided some useful information about the costs of services put forward by providers who completed the survey and engaged in the process, there are significant data issues and some fundamental underlying principles which present challenges with using the results as a direct guide to future fee levels. We understand that a similar conclusion was reached by many other local councils. DHSC have also made it clear that the outcome of the 'Cost of Care' exercise is not intended to be a replacement for the fee-setting element of local council commissioning processes or individual contract negotiations.

Providers should also note that we assumed, based on DHSC guidance and feedback, that the technical requirements of the exercise were for us to report unadjusted figures (including medians) in its feedback to DHSC. This was also influenced by our previous understanding that allocations of 'Cost of Care' funding to councils may have been at least partly determined by the results submitted by local councils. The National funding which was made available to "fund" these reforms has been reallocated and distributed as a Social Care Grant with explicit conditions that it is being provided to help local councils fund inflationary and demographic pressures in Children's and Adults Social Care. There are a range of such pressures across non-older people care home and domiciliary care markets. We understand that funding is no longer linked to 'Cost of Care' data.

Given the concerns over the data set out in 'Cost of Care' reports as attached, we intend to carry out some detailed work on the adjustments that would need to be made to the 'Cost of Care' data before this could be used as one of our range of indicators to assist with future fee setting, either now or post funding reform. Specifically, for care homes we would use DHSC guidance to make adjustments in respect of Return on Capital, Return on Operations and Occupancy. For domiciliary (home) care, we intend to carry out work to further understand the impact of Direct Contact and Travel Time on indicative fee levels.

We are is committed to working with providers on these areas and will do so through the usual meetings and forums held to facilitate joint working, building on the 'Cost of Care' and MSP work we have carried out in partnership over the last year.