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The Care Act – where do providers stand?

23/07/14
The Care Act received Royal Assent in May. A piece of seminal legislation, it represents the biggest overhaul of the care sector in over 60 years.

With the objective of streamlining all existing social care legislation, the Bill spent two years going through Parliament and was subject to great discussion.

Along with the broad political consensus that the Act enjoyed throughout the legislative process, there was general agreement across the sector that this was a positive and necessary development. Some thought it didn’t go far enough, but at least it was going in the right direction.

Yet amongst the extensive media commentary, political wrangling, and stakeholder input, the voice of the independent provider struggled to make itself heard.

This may be because this Act does not seem to pay much heed to those who provide independent services. The focus of the legislation is, rightly, those receiving care. This can be seen in the positioning of well-being at the centre of provision. Councils must ensure that the well-being of care recipients, as well as their carers, is considered when arranging their care.

The last minute amendment which saw the Human Rights Act extended to all those receiving state-funded care, whether in a care home or in their own home, further protects the rights and dignity of the hundreds of thousands of citizens who receive care each day.
The way in which Local Authorities operate was also extensively addressed. Revised minimum eligibility criteria will be rolled out from April 2016, meaning greater clarity and consistency for the population and councils. New provisions will also come into force which mean people can appeal against eligibility and funding decisions. 

Care Act Implementation Grants have been made available to councils to the tune of £125,000 per Authority – a reflection of the internal upheaval that getting ready for the implementation of the changes will cause.

Yet this Act will radically affect all those involved in the provision of care, not just councils. As readers know, independent providers are an essential part of care infrastructure. The Care Act, failed to address one of the most significant concerns faced by the independent sector: funding.

It is common knowledge within the sector that some Local Authorities utilise their market power to offer rates to care homes which do not reflect the cost of providing care. Providers accept and absorb the shortfall, with what seems like little alternative.

The situation today makes for important statistical analysis. No one wants to see a sizeable provider collapse (or any provider, for that matter), and the vulnerable adults supported in their homes deserve security and peace of mind. The Care Act does look to address this danger, by introducing new provisions to allow the CQC to look into the finances of providers and ensuring that councils develop contingency plans that can be deployed in case of a collapse.

But what the act doesn’t do is address the financial issues which could potentially push providers into the red. Whilst many councils currently pay below the cost of care, a result of budget tightening and the age of austerity, the Care Act could make this practice more widespread.

The Act makes it mandatory for councils to arrange the care for all that request it – including those paying for it privately. In exchange for this service, councils will be able to charge a fee, a ‘brokerage’ fee of sorts. This could incentivise Local Authorities to publicise this service, thereby increasing their power over the market and thereby their control over prices. This will not help providers who are already looking at decreasing margins.

Reduced revenue will mean less money to invest in services, people and training. With the genesis of the Care Act being the desire to drive up standards of care across the country, its failure to tackle to tough and complicated issue of funding and commissioning could put this goal in jeopardy.

Throughout the process of the Act becoming law, the concerns of independent providers were secondary. That is not to say they should have been at the forefront of a process which rightly focused on those receiving care. But it has meant that an imbalance within the system has remained, one that is likely to only increase.

With the consultation on the draft guidance for the Act having recently opened, now is the time for independent providers to voice their concerns loud and clear. We must make sure that we have a strong and viable network of care provision that will be fit for purpose when it comes to giving first-rate care for generations to come.


This article was first featured in the July/August print edition of Healthcare Business News.

Ros Trinick is an Associate Director at Political Lobbying and Media Relations, specialising in health and social care.

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