Care providers challenged to stop bidding for low-fee tenders

Care providers should cease bidding for council contracts at prices they feel are too low to deliver the specified service, incoming Association of Directors of Adult Social Services president Sarah Pickup has said.

Pickup, who takes over as Adass president today, said providers had to take their share of responsibility where they felt poor care had resulted from inadequate funding from commissioners.

“If I go to a meeting with providers, many will say, ‘local authorities are terrible and they all commission badly’; but they don’t,” she told Community Care in an interview to mark her accession to the presidency. 

“The commissioning specification would not have called for poor care. If you feel that you are not going to receive enough money to deliver to the specification, don’t bid for the contract.” “If no one bid for contracts, councils would have to raise the price,” she added, though she admitted this would not solve the problem of the overall under-funding of social care.

In the past year, care providers associations have mounted a series of successful judicial reviews that have forced councils to rethink their approach to setting fees and demonstrate that they have taken account of the costs of care faced by providers.

However, Pickup called for a new relationship between providers and commissioners, based on partnership. “We won’t get far if we don’t work with providers. Judicial reviews are not really the answer,” she added. “They happen when both sides feel caught between a rock and a hard place.”

She encouraged providers to be open about their costs and finances and to work with councils to explore new business opportunities, such as providing intermediate care services that could offer NHS commissioners cost-effective alternatives to community hospitals.

But she said the extent to which providers’ were open to diversification was variable: “Some providers are absolutely up for moving foward on that; others are not.”

Pickup said she had been working constructively with national care provider associations on examining the true costs of care faced by services.

However, her comments about fees drew a sharp response from the United Kingdom Homecare Association. “Across the country, councils are often the only major purchaser of care services in the local area and they frequently exploit their dominant market position in the knowledge that without retaining existing contracts with the council, their local providers may not have a business to run,” said UKHCA director of policy Colin Angel.
 
“Council tender processes rarely operate as exercises between equal partners.  Councils determine the contracts (with terms stacked in the authority’s interests) and increasingly fix the maximum price at which prospective providers can bid.  To bid above this price leads to instant disqualification.  Accepting a lower-priced council contract can be preferable to being out of business, particularly where people who use services are unable to access direct payments quickly or at an adequate level to buy regulated care.”

He said a UKHCA survey of members on commissioning had found that three-quarters felt councils valued low price above high quality when tendering for services. While he agreed judicial reviews were not the way forward, Angel added: “Providers could be forgiven for thinking that legal action may be the only device left to redress the imbalance at local level.”

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