Purpose

Proposed decision:

 
Extend the Learning
Disability, Physical Disability and Mental Health Residential Care
Home Services contract for a maximum of up to two years from 15
June 2024 to 14 June 2026 and delegate authority to the Corporate
Director Adult Social Care and Health to take other relevant
actions, including but not limited to finalising the terms of and
entering into required contracts or other legal agreements, as
necessary to implement the decision.
 

Reason for the decision:
 
The
Care Act 2014 gave local authorities in England, the NHS and the Care Quality Commission (CQC) clear
legal responsibilities for managing different elements of the adult
social care market that include considering need, provider
sustainability, value for money and integration.
 
Framing
Kent’s Future and Securing Kent’s Future and the Adult
Social Care Making a Difference Everyday Strategy, identify New
Models of Care and Support as key priorities by recognising the
importance of health and social care integration, building
effective strategic partnerships with our providers through
coproduction whilst being innovative in the way we look to redesign
services to improve quality and importantly respond to budget
constraints.
 
To help
achieve this, the council has procured external expertise to
undertake three distinct pieces of work that will help with the
redesign of a new service. This will help inform the commissioning
intentions for adult social care services and provide commissioners
with the required information to design new specifications and a
robust commissioning and procurement process.
 
The
commissioning exercise will include extensive engagement with
people who use care and support services to develop a new
specification which ensures high quality and cost-effective
services in the future.
 
This is
a demand driven service and due to increases in complexity,
increased demand and fees in excess of
that funded for inflation, spend has grown year on year. It is
recognised that during the contract extension period mitigations
will be put in place to help halt the increased spend to the
service through the development of a robust savings action plan.
This will require a collaborative approach across Kent County
Council (KCC) and NHS Kent and Medway Integrated Care Board (ICB)
colleagues and proactively engaging with providers to determine
fair costs for both legacy and new placements.
 
The
council will need to consider looking to develop alternative care
and support offers which support people to remain in their own home
for longer. These include an enhanced technology offer, integrated
reablement service, homecare offer, increasing direct payments and
support that can be purchased such as personal assistants and niche
services delivered by the voluntary sector and micro
providers.
 
Commissioners will develop new models, supported by the cost of
care exercise completed by the external consultants, which will
ensure best value for future services. The extensions will allow
this activity to be completed.
 
The
current Learning Disability, Physical Disability and Mental Health
Residential Care Home Services contract ends on 14 June 2024 and
there are two, 2-year extensions built into the contract, which
could take the contract through to 14 June 2028. This decision
seeks to utilise the first of these two-year extensions from 15
June 2024 to 14 June 2026.
 
An
extension to the current contract will allow the external
consultants to complete the assessment and for the new service to
be procured. However, it is anticipated that the exercise carried
out by external experts will not be finalised until March 2024.
This will enable a full procurement process to commence once the
extension to the contract has been implemented.
 
The
proposed extension will be put in place for a maximum of up to two
years. However, a robust reprocurement
exercise is to be completed as quickly as possible and break
clauses will be written into the contract extension to allow the
council to terminate the contract when appropriate and to fit in
with the mobilisation of a new contract.
 
There
are currently 881 people placed in a residential care home setting
through this contract, and a further 523 people placed in
residential care homes outside of the contract. Not all placements
and/or homes will be within Kent.
 
The
contract is by way of an open Dynamic Purchasing System (DPS) that
allows the council to add new providers during the lifetime of the
contract having passed the relevant selection criteria. The DPS
provides a high level of flexibility that allows for market
development and new purchasing opportunities if, and when
required.
 
The
services/contract should be considered in the context of the
external and internal pressures which have significantly changed
from when the contract was initiated in 2019.
 
Pressures include:

•     
The demand for care and support for people with a
greater level of complexity of need.

•     
Inflationary pressures and financial sustainability
issues.

•     
Increased placement costs seen across Kent and
nationally.

•     
Workforce pressures and the recruitment and
retention of high-quality staff

•     
Quality issues resulting in poor Care CQC rating and
contract suspensions.
 
Options (other options considered but
discarded) The council can choose not to
extend the current contract. However
there are significant risks, as set out below, to choosing this
option and no benefits have been identified.
 
Legal
and Policy: The council commissions services from the independent
sector to meet the needs of individuals deemed to be eligible in
accordance with and following a Care Act assessment. If the
contract ends the council will be pressured to fully meet its
statutory obligation under the Care Act with regards to providing a
high quality, safe service that is at an affordable
price.
 
Financial: A lack of robust fee setting mechanisms and
contractual leverage may result in a significant increase in
placement costs which will be challenging to control. Savings
targets set out by the council and to be met through greater
partnership working and negotiation will be difficult to achieve
through spot purchasing agreements and providers will be within
their right to give notice on individual placements that may be
hard to source at an affordable price.
 
Reputational: A shift to partnership working with providers will
be challenged as the expectation from providers is that the
contractual arrangements with the authority will be maintained due
to the mutual benefits to both parties. People using this service
expect a robust oversight of the service and the perception will be
that this is not the case if the service is not part of a KCC
contract.
 
Resource Implications: If the contract ends there will be a
requirement for the review, renegotiation, and repurchasing of all
individual placements with new contract and terms and conditions
established. This will also require significant system and process
updates.
 
The
proposed decision supports objective 2 of Securing Kent’s
Future to deliver savings from identified opportunity areas to set
a sustainable 2024/25 budget and MTFP and priority 4 of Framing
Kent’s Future – New Models of Care and
Support.
 

Financial Implications:
 
The
initial contract cost is set out below along with the current cost.
Various market pressures and increase in demand and complexity of
care has resulted in an increased spend on the service. Robust
actions are being put in place to limit this spend.

 

Contract

Initial contract cost advertised (per annum)

2022/23 spend

Residential Care Home Services (Learning Disability, Physical
Disability & Mental Health)

£108,000,000

£138,000,000

 

 

 
Dedicated commissioning and finance resources will be
required to ensure a collaborative approach to
determine a robust fee model and pricing guide and the
identification of any financial risk.
 
Legal implications: An
extension is necessary to enable the council to undertake a
detailed Cost of Care review, which is likely to be completed by 28
February 2024. As such, the council will not be in a position to undertake a reprocurement, based on the outcome of the review,
in time for a new service to be in place in 2024. Therefore, a
change is not proposed at this time for
economic or technical reasons. Any procurement of the service,
prior to the completion of the Cost of Care review, will cause
significant inconvenience and substantial duplication of cost. It
is also unlikely that a procurement will attract market interest,
as providers may be reluctant to bid, prior to the completion of
the Cost of Care review.
 
An
extension is available to be utilised and the extension was
included in the Contract/PIN Notice advertising the original
procurement of this service and therefore the extension is
permissible and compliant under PCR 2015 regulations.
 
 

Decision

Decision:
As Cabinet Member for Adult Social Care and
Public Health, I agree to:
a) EXTEND the Learning Disability,
Physical Disability and Mental Health Residential Care Home
Services contract for a maximum of up to two years from 15 June
2024 to 14 June 2026; and
b) DELEGATE authority to the Corporate
Director Adult Social Care and Health to take other relevant
actions, including but not limited to finalising the terms of and
entering into required contracts or other legal agreements, as
necessary to implement the decision.