Decision details

(1) That approval be given to an addition to the costing model used to calculate the domiciliary care hourly rate to include the increase to National Insurance Contributions from April 2022.

(2) That the updated costing model referenced in 1.1 be used to uplift the hourly rate for existing domiciliary care framework contracts and for the new domiciliary care agreements that are to be procured for service delivery from 1 September 2022.

Cabinet at their meeting on 21st May 2021 (Minute Reference 94/21) approved the use of a costing model to calculate the uplift to be applied to the domiciliary care rate for new agreements awarded following the outcome of a procurement exercise. A tender was advertised in August 2021, however due to the number of bids received, the exercise was terminated, and a further procurement is to be completed in January 2022. The costing model is also applicable to the existing framework contracts. In September 2021, a government mandated increase to National Insurance contributions of 1.25% from April 2022, was announced.

The costing model previously approved by Cabinet does not incorporate this change. This report recommended the model takes account of the increase to National Insurance contributions to ensure that the domiciliary care sector can withstand the financial burden that the increase will create. This will ensure that when the tender is advertised for a new domiciliary care model, it will be more attractive to prospective bidders, thereby reducing the risk of a low number of tenders being received.

There is an option to do nothing and leave the model as it is, however it is likely that if it is not agreed, there is a risk to the ability of the Council to discharge its statutory obligations as a result of:

• Services becoming unviable and a lack of sufficient depth in supply;
• Providers handing contracts back;
• Recruitment challenges already experienced in the sector, increasing;
• Inability to discharge individuals from hospital when they are medically optimised, creating pressure in the wider health and social care system;
• Increased discharges to bed-based provision due to the lack of depth in supply of domiciliary care;
• Failure to properly take account of Care Act responsibilities around market shaping and market sustainability;
• Inability of Brokerage Teams to source packages of care;
• Reduction in quality and increased safeguarding issues, with providers potentially cutting corners due to a challenging hourly rate.