Cost of care exercise

We support people who have been assessed as being in need of care.  Often that assessment will lead to a placement in a residential care setting.  We invest over £100m a year in such services through contractual arrangements with more than 200, predominantly independent, businesses.

If a service user expresses a preference for particular accommodation, we should arrange for care in that accommodation, subject to factors including cost (the usual cost for someone with the individual’s assessed needs). A service user can pay the difference if they wish.

In order to establish and review usual costs, we need to consider the actual costs of providing care, local factors and our duty of best value.

Update on cost of care exercise for working age adults – November 2017

The Council wishes to consult providers on its interim position as set out in the Cost of Care Report in order to be enable it to make a final decision about its prices in 2015/16, 2016/17 and 2017/18.

The consultation will commence on 15 November 2017 and last 28 days ending on 12 December 2017.  The Council will give full and proper consideration of all such feedback and make a final decision which will be communicated to all providers before the Christmas period.

An Equality Impact assessment has been carried out.

I hope you will take the opportunity of participating in the consultation. If you have any questions or queries please do not hesitate to email costofcare@norfolk.gov.uk.

Update January 2018: The Member Briefing can be found here

Consultation report on proposed usual prices for residential and nursing care for older people in Norfolk for the year 2017/18

On 24 February 2017 providers were notified that the consultation on proposed usual prices for Residential and Nursing Care for Older People in Norfolk for the year 2017/18 commenced. The consultation will enable the Council to gather the views of providers and any information that they consider should be taken account of. This consultation will run for 28 days from 24 February 2017 to 24 March 2017 - view the consultation letter and supporting information here.

On 5 April 2017 we notified providers that the Usual Prices for Residential Care 2017/18 has been agreed. The new weekly payment levels can be viewed here.

Update on cost of care exercise for working age adults - January 2017

On 16 January 2017 providers were written to with an update on the working age adult cost of care exercise, with details of the information that was to be considered by the Adult Social Care Committee on 23 January 2017 - view the letter here. 

On 27 January 2017 providers were written to letting them know the outcome of the Adult Social Care Committee meeting on 23 January - view the letter here.

Decision on the usual prices for residential and nursing care for older people in Norfolk for the year 2016/17

10 October 2016 - Norfolk County Council Adult Social Care Committee, met on 10 October 2016 to make the final decision on the usual prices and the related proposals for this cost of care exercise. 

Link to committee paper

The committee considered and agreed to;

  1. The usual prices for residential and nursing care for older people in Norfolk in 2016/17 which include inflationary pressures as set out in Table A below.
  2. The proposed treatment of third party top up agreements in 2016/17

Providers were notified of the decision by letter on 10 October

5 October 2016 - The final report has now been produced and it will be considered by the Adult Social Care Committee on 10 October 2016. The Committee will make the final decision on the usual prices for residential and nursing care for older people in Norfolk for the year 2016/17. 

We notified providers of this on 5 October - view the letter here.

Update on cost of care exercise for working age adults - July 2016

In order to conclude the cost of care process and the setting of usual prices for working age adults in Norfolk, further analysis is being carried out to enable indicative actual costs to be determined. Providers received information about this in July 2016.

Providers received a letter and supporting information on 22 July - view the letter and supporting information here:

Additional information was sent to providers on 26 July - view the letter here.

Cost of care consultation May 2016

Our Cost of Care consultation on the usual prices for residential and nursing care for older people in Norfolk for the year 2016/17 opened on 10 May 2016. The consultation was to close on 7 June 2016. Providers were written to with information on the consultation and how to participate - view the letter here.

On the 6 June, the consultation deadline was extended, and will now close at midnight 21 June 2016. Providers were written to with information detailing underpinning calculations relating to the proposed fee uplift which included the effect of the new national living wage and changes to the national minimum wage rate - view the letter here.

On the 20 June 2016 we provided clarification of our position in relation to the treatment of third party top up agreements - view the letter here.

On 27 June 2016 we wrote to providers notifying them that the consultation had closed and informing them of next steps - view the letter here

On 15 July 2016 we wrote to providers again to update them on the consultation analysis - view the letter here.

Adult Social Care Committee 29 April 2016

On 3 May 2016 providers were notified of the outcome of the committee meeting - view the letter here.

On 22 April we notified providers that committee papers were available - view the letter here and papers here.

In addition to the committee paper providers you may like to look at a more detailed breakdown of usual costs. View the breakdown here. 

You can read the latest version of out Equality Impact assessment. View the assessment here.

On 14 April 2016 we notified providers that Cost of Care to be considered by the Adult Social Care Committee on 29 April 2016 - view the letter here.

Providers were written to on 29 February 2016 with an update - view the letter here.

Providers were reminded about the consultation on 11 January 2016 - view the letter here.

Cost of care reports and consultation December 2015

Norfolk County Council is committed to promoting the continued independence of all adults in Norfolk by helping to prevent, reduce or delay the need for care and support. The Council recognises, of course, that for many people care and support provided in a residential or nursing care home may be required and in these circumstances the Council relies in the main on a market of independent care home operators to provide the high quality care needed and expected.

The Council is required to promote the effective and efficient operation of this market in care and does so in a number of ways and in particular by funding the care costs of people who are unable to fund their own care. It is important that the usual prices paid for this publicly funded care taken together with privately funded care is enough to ensure that the care provided is safe, of the right quality and is commercially sustainable.

The Council is undertaking a cost of care exercise aimed at establishing its usual prices for publicly funded residential and nursing care. In doing so the Council will have regard to its own financial position and is proposing its usual prices for 2015/16 for consultation.

In addition the Council is setting out a proposed pathway and mechanisms for assessing prices for the next three years which will be subject to further amendment to reflect changes in provider’s costs. The Council is now seeking provider views to help it to make a final determination on the prices that it would usually expect to pay for residential and nursing care in Norfolk.

Providers were informed about the consultation on 11 December 2015. View the letter here.

The Council published the Norfolk County Council Cost of Care Report for Consultation, Proposed usual prices for Residential and Nursing Care for Older People in Norfolk for the year 2015/16 and pathway for updating rates for the three year planning period 2016/17 to 2018/19 inclusive. You can read the report here.

Further details of the provider data set can be found here.

The Council published the Cost of Care for Working Age Adults Interim Report. The cost of care process as it applies to providers of residential and nursing care in the working age adult market in Norfolk has not yet been completed. The Council published an interim report to provide an update on progress to date and describe the next steps so that the process can be concluded as soon as possible. You can read the report here.

The Council recognises that some providers may have been intending to provide their actual costs data to the 2016/17 cost of care exercise when it recommenced. As previously notified to providers the 2016/17 data gathering process will not now take place and the Council, therefore, welcomes any further actual costs data during the consultation period. You can find the template here.

Equality impact assessment (EqIA) - The Council has undertaken an equality impact assessment on the cost of care review. An EqIA report has been made available as part of the cost of care consultation. View the report here.

The cost of care exercise for 2015/16

1 December 2015 - providers received a further update on the cost of care consultation. View the letter here.

10 November 2015 – Care providers received further correspondence updating them on the progress with the Cost of Care exercise and proposed consultation timescales. View the letter here.

24 September 2015 – care providers received an update on the Cost of Care exercise and consultation timescales. View the letter here.

10 September 2015 – the Cost of Care data collection period closed. The data is being analysed in preparation for consultation.

7 September 2015 – a Cost of Care update was presented to the Adult Social Care Committee. You can read the paper here.

2 September 2015 – care providers received a reminder of the 10 September deadline to submit completed workbooks and were provided with an update on the cost of care process. View the letter here.

20 August 2015 – care providers were written to updating them on the Cost of Care exercise and explaining that there had been a good response to Norfolk County Council’s request for information. Many providers had been able to complete and return the Excel workbook, however a number of requests to extend the deadline for the data collection period had been received and having taken account of the comments and concerns raised the data collection period was extended to 10 September 2015. View the letter here.

31 July 2015 – care providers that provide services for working age adults received information about how they can contribute to the Cost of Care exercise for 2015/16. View the letter here. View the Excel workbook here.

24 July 2015 – care providers were written to explaining the situation regarding the re-evaluation of 2015/16 fee levels for residential and nursing care in Norfolk and requesting providers of residential and/or nursing care services to assist the Council to understand what the actual costs of providing care are in 2015/16. The Council prepared an Excel workbook for completion by 20 August. View the letter here. View the Excel workbook here.

Cost of care consultation questions and answers

There is more detail provided in the consultation report in relation to the price bandings. See the table below for clarification.

  Existing banding Current category of need  New category of need 
Care home  Band 1 Older people and other (including physically disabled pension age)  Residential standard
Band 2 Very dependent or blind older people
Band 3 Very highly dependent older people with mental health problems Residential enhanced
Care home with nursing Band 9 Older people and other (including physically disabled pension age) Nursing standard
Band 10 Very highly dependent older people with mental health problems Nursing enhanced

The report states:

"For the 2015/16 financial year the Council intends to identify any cases where the final new usual prices are greater than the prices that have been paid to providers since 6 April 2015 in the relevant price bands. In these cases the Council intends to calculate the difference and pay providers that difference for the whole period during which care has been provided backdated to 6 April 2015 or such later date as the care may have commenced."

Please note the report contains proposed usual prices for 2015/16 which are subject to further adjustment in the light of the consultation.

If you look at appendix 1 in the report we explain how the 18.9 hours was derived. We took the direct care labour costs as given to us by providers through the templates, calculated how many hours of care could be bought at the wage rates from the NMDS and divided those hours across the residents.

The working group has the following participants, John Bacon representing Norfolk Independent Care (NIC are the Council’s strategic partner in relation to market development issues), Bernadine Pritchett, Robena Clarke representing ARMC, Simon Blake and Sally Stubbs. Interested parties are invited to contact Norfolk Independent Care.

The £7.12 rate is a blended rate derived from National Minimum Dataset data figures for the median pay rates for care workers and senior care workers. The figure is for 2015/16 i.e. before the effect of the national living wage. The intention is to reflect the impact of national living wage from April 2016 onwards through the cost adjustment mechanism.

FAQs prior to commencement of Cost of Care Consultation 11 December 2015

It is usual for the Council to undertake a process to establish the costs it would usually expect to pay for accommodation for those it places, at the start of a planning period. This is effectively leading into that new planning period and it would be very helpful to understand from you what your actual costs of providing these services are in order to inform that decision.

The Council had elected to begin a process that would allow it to set its usual costs, for the next planning period, to take affect from April 2016. For the current year, it had proposed to award a fee uplift of 1.5% to providers of residential or nursing care to older people in Norfolk and 1% to providers of such care to working age adults in Norfolk with whom it had contracts.

That decision was however challenged and the Council is now obliged to begin its processes earlier. More generally it is an opportunity to respond to provider concerns that the Council receives from time to time about fee levels and to adhere to the new duties placed on the Council by the Care Act to promote effective and efficient markets in care services.

In order to establish and review its usual costs, the Council at the start of a planning period should have due regard to the actual costs of providing such care. The Council is following a process as described in your letter dated 23 July 2015 which clearly shows how we will use your data and how much we value your engagement with us.

The Council has sent you a workbook to complete. This sets out the key information it would like from you and gives you the opportunity to include anything you additionally wish to send.

As explained in your letter dated 23 July 2015 there is an opportunity to submit data online or anonymously by post. That will be sent directly to the Council, no intermediary will be involved. It will be entirely left to you as to whether you wish to give the Council information it is requesting in a way that could identify your organisation.

To be clear, however information is given, it will be treated with the same weight and in the same way as any other information received that may identify a provider from time to time. In addition the Council undertakes to ensure that any information provided will not be shared with any other providers or used for any other purpose other than for establishing its usual costs, unless you specifically indicate otherwise that it may be.

There is no minimum or maximum engagement required. All information provided is helpful and to allow everyone to be listened to your participation is very much encouraged.

As explained at the same time as you are preparing and sending your data, the Council will gather other relevant cost data that it already possesses or may reasonably obtain to assist with its understandings.

Please note that should the Council reasonably consider at its analysis and decision-making stage that a decision is to be deferred then that right is reserved and will be communicated to you.

The Council will follow its process through to establish its usual costs for this financial year. It is already agreed that that will replace its 9 March decision.

Its analysis of all the actual cost information it receives from the market, together with anything it obtains from its own investigations will be considered alongside any local or other relevant factors, its equality impact assessment, as well as the Council’s duty of Best Value and its obligations under the Care Act 2014, to which the Council will have due regard. That analysis will lead to it setting its provisional rates. It will consult on those provisional rates and take any comments it receives into account when making its decision. Please see your letter dated 23 July 2015 for a more detailed description of this process.

Should usual costs exceed the Council’s budgets then it will be a decision for the Council as to how to meet its statutory duties including but not limited to how and when it will commission services in the future.

It is usual for the Council to undertake a process to establish the costs it would usually expect to pay for accommodation for those it places, at the start of a planning period. This is effectively leading into that new planning period and it would be very helpful to understand from you what your actual costs of providing these services are in order to inform that decision.

The Council had elected to begin a process that would allow it to set its usual costs, for the next planning period, to take affect from April 2016. For the current year, it had proposed to award a fee uplift of 1.5% to providers of residential or nursing care to older people in Norfolk and 1% to providers of such care to working age adults in Norfolk with whom it had contracts.

That decision was however challenged and the Council is now obliged to begin its processes earlier. More generally it is an opportunity to respond to provider concerns that the Council receives from time to time about fee levels and to adhere to the new duties placed on the Council by the Care Act to promote effective and efficient markets in care services.

In order to determine the Council’s costs it would usually expect to pay for accommodation for those it places, it must follow a proper process which is described for you in your letter dated 23 July 2015.

Part of this process involves the Council having regard to the actual costs of providing residential care including nursing care in Norfolk.

The Council will gather relevant cost data that it already possesses or may reasonably obtain to assist with its understandings but clearly information direct from providers would be very helpful. Whilst you will understand that the Council cannot predetermine or pre-empt its decision as to what its usual costs will be, that will be taken having followed its process through, it is important to note that, more generally, that this is an opportunity to respond to provider concerns that the Council receives from time to time about fee levels by generating a process that allows that detail to be captured and taken into account.

The contract let in this situation is broader than simply a contract for care services. It is an arrangement to transform the Council’s ageing care estate to better meet the needs of its existing residents and the aspirations of the people of Norfolk. The arrangement sees Norse Care providing services to older people, respite and residential care for people who are physically disabled and to tenants of housing with care schemes. They provide buildings maintenance and meals.

The arrangement with Norse Care must further be understood in the knowledge that they inherited a number of liabilities, reinvest in services and pay the Council an annual rebate.

You will appreciate that the arrangements are broader than paying the pure cost of care ‘per bed’. It would not be genuine to try to make a direct comparison with the services the Council purchases from the private sector.

Independence Matters do not provide long term residential care and therefore their services are not within scope of this process.

The contract with Norse Care is broader than simply a contract for care services. It is an arrangement to transform the Council’s ageing care estate to better meet the needs of its existing residents and the aspirations of the people of Norfolk. The arrangement sees Norse Care providing services to older people, respite and residential care for people who are physically disabled and to tenants of housing with care schemes. They provide buildings maintenance and meals.

You will appreciate that the arrangements are broader than paying a spot cost however the Council may be able to use information it obtains in its cost of care process to drive inefficiencies through that contract and to inform its future commissioning decisions.

The Council’s standard residential care contract does not enable the Council to differentiate on the basis of CQC ratings. The CQC rating process is not yet complete. The Council will consider how to link payment rates to the CQC ratings and other indicators of quality services as part of the Council’s ongoing review of contracts.

If you consider it appropriate please do feedback any comments or observations during the data collection or consultation stages of the process.

The cost of care exercise is about a process to determine what the Council would usually expect to pay for accommodation for those it places. It will not of itself result in a new system to incentivise quality. The Council is doing separate development work within its Quality Framework to incentivise quality.

The Council is obliged to reflect levels of need in its pricing structures and as a consequence there will be a range of prices that do so.

The Council wants to understand from you the actual cost of providing residential and nursing accommodation and has provided you with a workbook for completion. If you consider it appropriate please do feedback any comments, observations or other data as appropriate during the data collection or consultation stages of the process.

Please be aware that the Council has new duties in the Care Act 2014 to promote an effective and efficient market and to do so the Council will make reasonable assumptions about the funding arrangements for an effective and efficient business and take those into account at the relevant stages of its process described in your letter dated 23 July 2015.

The Council wants to understand from you the actual cost of providing residential and nursing accommodation and has provided you with a workbook for completion. If you consider it appropriate please do feedback any comments, observations or other data as appropriate during the data collection or consultation stages of the process.

As explained in your letter dated 23 July 2015 the Council will take legislation and other relevant factors into account when setting its usual costs.

The Council wants to understand from you the actual cost of providing residential and nursing accommodation and has provided you with a workbook for completion. If you consider it appropriate please do feedback any comments, observations or other data as appropriate during the data collection or consultation stages of the process.

As explained in your letter dated 23 July 2015 the Council will take legislation and other relevant factors into account when setting its usual costs.

The cost of care exercise is designed to deal with residential and nursing care only as there is statutory guidance for establishing the prices the Council would usually expect to pay for such services.

We are currently re commissioning our block contracted home care through a procurement process that enables the market to tell us the prices it requires. We are devising a process to enable home care providers in the spot contract market to tell us the price that they require going forward.