The English Community Care Association has published a report saying more and more councils are either freezing fees for care home providers or failing to keep up with inflation at a time of increased costs from rises in the minimum wage and staff holiday entitlements.

It's an age-old (well post-community care reforms at least) debate in adult social care:

Providers: Councils don't pay us enough to provide quality care

Councils: Don't blame us, blame the government, our paymasters.

Government: We fund adult social care perfectly adequately, it's up to councils and providers to use that money efficiently and effectively.

However, Sarah Pickup from Adass has provided an interesting twist on this theme by suggesting that low increases may be entirely justified given councils' government-set efficiency targets (of 3% a year).

What's people's experience of fee-setting by councils?

 Where I work the council is very stubborn on fee and fee increases although, being in London especially (and I imagine it is the same in any area where there are many local authorities around) what one council offers gets played off against what another council offers. 

I had one situation last year when someone was placed out of borough and the home basically held our local authority to ransom by saying they would ask the resident to leave if our authority didn't match what the other local authorities were paying. After a lot of time (and the home owner contacting the family of the resident directly to threaten her with eviction!!) our local authority paid up  but under duress. 

Personally, I think councils should run the residential and nursing facilities directly!  Take profit out of the equation. 

Thanks cb.

That would be a big step wouldn't it? A return to a publicly owned, publicly run care home sector. Does anyone else think that would be a good step (however, politically improbable!)?

Mithran sets out an overview of the age-old quandary that applies not just to inflation increases but also to funding of social care provision at any time.  Unfortunately CB shows another side to this that is far more common, that of (a) privately run much mean profiteering and, (b) failure to see the wood from the trees with the use of clearly emotive language all too typical of council commisioners / funders.

Firstly, if a council has to place someone out of borough it means either (a) that council does not have suitable provision or (b) that council does not have available provision, or (c) a combination of the two.

Secondly, to expect any provider (public or private) to simply accept what a given council wants to offer is a nonsensical position for many reasons. 

(a) if provider accepts less than norm from external council B, will not council A (where provision located) want to pay the same amount.  Or for that matter other external councils C, D & E?  The answer is a definitive yes.  To explain lets put some arbitrary figures on the scenario. 

Provider has 20 rooms of which the host council pays £100 per week for 13 rooms.  3 other external councils (A, B & C) all have 2 placements also paying £100.  Now CB's council comes along and wishes to pay only £90 per week.  If, as would happen all other councils would want to follow suit and get 'Best Value' buy paying £90 per week, then the provider is faced with a 10% reduction in aggregate income.  What does it do - sack 10% of its staff?  Does it seek 10% efficiencies (and in today's context also suffer the double whammy of expenditure costs significantly above RPI for fuel etc as well)?

What CB describes is a common scenario. A council wishes to pay £90 per week yet has either no suitable or available provision in its borough. It then seeks to pay £90 per week elsewhere.  Yet if the only suitable and available provision costs £100 then the council has to pay this as it is duty bound by law to find suitable and available provision (and correctly so).  Unfortunately, the council because and only because it is private provision tends to use emotive language such as "being held to ransom" etc to cover up its own failings in not having enough suitable or available provision.  If the only suitable provision was publicly run and cost £100 would the same emotive language and feeling of 'duress' still be there?  I doubt it.

Another way of looking at this is if I need to buy a good or a service very quickly.  Do I wait six weeks / two months on a cheaper option or do I pay more for an immediate one? All of us have to make this decision in our everyday lives?  If a storm blows off roof tiles or other such emergency we tend to have no option but to pay a premium.

Further to this CB's argument all supposes that the out-of-borough provision must be profiteering as well?  Why?  Does CB's council have full and accurate figures that detail the actual costs of provision in the out-of-borough home?  No.  Yet just because it is more expensive per head doesn't (automatically) mean that it is profiteering (whether publicly or privately run).  Simple reasons such as economies of scale with the number of rooms or more complex ones that the provision is a specialist one with more specialist / experienced staff may cause higher apparent costs per head.

Moreover, the 'age-old' argument that privately run provision has to make a profit and this must mean it is more expensive than publicly run provision doesnt necessarily follow.  A simple question.  If councils feel under duress and perceive they are being held to ransom why do they not develop and run their own provision?  The answer is often the one councils dont want to admit - That privately run provision is cheaper than council-run provision even after private companies achieve a profit.

I say this from having developed many scores services for providers in the support sector that are publicly and privately run.  The cost structure of publicly run provision is far higher than the private sector (that it staff are far more highly paid) and staffing typically accounts for 60 - 80% of costs.  Additionally, council run provision is far more conservative in its staffing levels and also in such matters as health and safety - that all again lead to a higher cost base. Moreover, council run provision tends not to cost itself correctly and transparently.  For example it relies upon other council departments to provide its printing costs, sorting out its insurances, sorting out is recruitment and its legal issues, yet never incorporates these actual costs transparently.

When full costings are done on a transparent basis by councils - of which I have been involved with - it quickly becomes apparent that privately run provision is significantly cheaper than council run provision.  As such these proposed developments are quickly shunned and the figures tend not to come into the public domain.  Councils like to perpetuate the perception that private provision must cost more than public provision, and this is a patently false one.

It is not the case that it is a political constraint on provision being run again publicly, it is a financial one.  Councils have the legal powers to run provision and if it was cost-effective to do so then surely then would?   This alleged political constraint on publicly run services is a nonsense and a stereotypical myth that councils wish to perpetuate (of all political hues).  This is not a p[olitical left or right argument.

In summary, I am not an apologist or an advocate for privately run provision - in fact quite the opposite.  Yet we all need to get away from emotive and false arguments that private means bad and public means good.  At the end of the day we all (unfortunately) have to accept that funding limits means we must get the best we can from a finite pot.  Regrettably that means more private provision than the more costly public provision alternative.

I was speaking purely from personal experience. I haven't done much if any research into the matters but I have seen a lot of residential homes. Some very good private ones of course, but I've also had a few dealings with home owners (not managers necessarily) who seem to have different agendas to what I would perhaps hope for - at least they could make the effort to pretend they care.. 

Anyway, I'll leave it in the hands of the commissioners as I'm just an ordinary lay social worker with no great voice in the debate and certainly in no position to argue the financial points very ably! 

The arguments I made may be 'emotive' .. 'false' hrmm.. well, from my point of view they are honest arguments although granted, I don't have an insight into the negotiations that might take place at a different level. 

Ultimately, I don't care who provides the service as long as a good quality service is provided. And I have seen the private sector moving into previously publicly run homes and seen the staff turnover affected massively as a result. 

I can't talk about cost but there is something that rests perhaps more uncomfortably with me about the profit-making that has become tied up in the provision. It is the way things are going though. I have no doubt of that. 

It's interesting to contrast the language coming out of the DH about commissioning - that of strategic planning and market development by councils, the sensitive balancing of price and quality and a very collaborative approach with providers - and some of the realities, where which side holds the whip hand in the market place appears all important.

Central government rhetoric is and has always been around, yet the language of commissioning does ned careful consideration.  A vey collaborative approach - or in old fashioned terms partnership - is needed but not with the focus on which party has the upper hand; rather with the best interests of vulnerable serice users at its core.  This, when it does work, which is all too infrequent, takes away any 'emotive' arguments about public or private sector provision or the age-old 'public good, private bad' preconceptions.

Unfortunately, all too few even understand the differnce between commissioning and procurement - and this applies equally to providers and to councils.

Take a tender for example.  A council seeks to 'commission' a service.  The tender process may seek an ideal that is not possible or may need to be tweaked by the other party (the provider) to reflect size, scope or other variables that are needed or general suggestions on how the service is better delivered.  Once agreed the council then 'procures' or buys that service.

As such the commisioning process that leads to eventual procurement inherently involves the 'collaborative approach' that central government guide upon in order for any service to be procured.  While the above is a simplistic explanation it is worthwhile to note that cross cutting central government agencies such as OGC issue guidance to all central government depts and to local government and to joe public to look at and conform to. If they all did so many of the misunderstandings that lead to tensions between providers and local government would be tempered and the commissionign and procurement processes be easier and ultimately, reflect better the needs of vulnerable service users.

Then the genuine partnership created by such 'collaborative approach' should in theory lead to greater empathy on both sides so that contracts drawn up to reflect what is procured suitably reflect matters such as inflationary increases in this case, and not simply see the council issue 'standard' and highly 'risk averse' contracts that dont reflect such easily forethought matters such as inflation.

Excuse this seeming pontification, but if the debate remains on matters such as who holds the whip hand then a collaborative approach or genuine partnership can not take place. Further, councils should not attempt to engineer, steer or control the market (which some see market development as) as this can often lead to market collapse (see SP example on this site and Cornwall as a case in point) as private organisations may be tempted to simply seek market share at a potential financial loss which ultimately leads to a lesser quality and non-cost effective service being delivered to the detriment of the vulnerable service user.  Finally, as stated above it is only when a true collaborative approach is there that 'the sensitive balancing of price and quality' can be effectively commissioned and then procured.  If it is not ...