Purpose

Proposed decision:
 
Extend the current Older
Persons Residential and Nursing contract for up to a maximum of two
years (1 April 2024 to 31 March 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 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
Kent identify New Models of Care and Support as a
key priority 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.
 
The
council will 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.
 
Following on from the cost of care review a new pricing model
and contract fee mechanism will be developed to ensure best value
for future placements. The extension will allow this activity to be
completed.
 
The
council will work closely with the market to ensure better value
for the council and achieve savings where appropriate. This will
include consider how to best utilise the Lots as part of the
present contract model to make cost efficiencies for example, the
utilisation of block contracts.
 
We will
work to increase membership of the current framework and will
review all off-framework placements regarding price, volume and
value for money and seek to negotiate on this basis.
 
An
extension to the current contract is required to 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 April 2024
once the extension to the contract has been implemented.
 
The
proposed extension period will be put in place for a maximum of up
to two years. However, a robust re-procurement 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.
 
Subject to the outcome
of the work currently being undertaken by consultants, we expect to
commence the procurement process in April 2024 with a view to
implement from early in 2025.
 
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.
 

Options considered and discarded:

 
The
council can choose not to extend the current contract and let it
end on 31 March 2024. However, there are significant risks to
choosing this option and no benefits have been identified. The
risks are set out below:
 
Legal
and Policy: The council commissions residential and nursing care
services for older persons 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.
 

Financial Implications:

 

The total cost of the current Older Persons
Residential and Nursing contract was set at approximately
£800m (£100m per annum). However, due to the factors
set out above, the annual cost has increased to £160m per
annum. The approximate total cost of the proposed two-year
extension period therefore is £304m.

 
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.

 
This is
a demand driven service and due to increases in complexity,
increased demand and fee rates in excess of inflation, spend has
increased year on year. Mitigations will be
put in place to help limit the increased spend through the
development of a robust savings action plan during the contract
extension period. This will require a collaborative approach across
KCC and NHS Kent and Medway ICB colleagues and proactively engaging
with providers to determine fair costs for both legacy and new
placements.
 
Legal Implications:
 
The Older People
Residential Care, Nursing Care and Respite Care Services was
procured as a Dynamic Purchasing Framework. The original Contract
Notice which was advertised in the Official Journal of the EU,
allowed for a contract term of four years, from 1 April 2016 to 31
March 2020. It also allowed for two 24-month extensions, from 1
April 2020 to 31 March 2022 and 1 April 2022 to 31 March
2024. 
 
Both contract
extensions have been exercised and the current extension period is
due to expire on 31 March 2024. 
 
Under Regulation 34 (Dynamic
Purchasing Systems), Contracting Authorities, are permitted to
extend the period of validity of Dynamic Purchasing Systems (DPS).
Regulation 72 (Modification of Contracts during their term) permits
Contracting Authorities to modify contracts and framework
agreements, without a new procurement procedure. This decision is
in accordance with the regulatory requirements.
 
An extension to
the DPS is necessary to enable the council to undertake a detailed
Cost of Care review of residential, nursing and respite care
provision, 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 by 1 April
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, as the procurement will need to be undertaken again on
completion of the Cost of Care review. 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.
 

Equalities implications:
 
To
ensure KCC’s statutory obligations under the Equalities Act
2010 are met, a full Equality Impact Assessment (EqIA) has been undertaken for recommissioning
purposes. This has also been considered for the purposes of the
contract extension and no major issues were identified. This will
be refreshed to encompass any new negative or positive impacts
identified due to the new service model.
 
New
providers joining the DPS during the contract extension will need
to continue to demonstrate that they have policies and procedures
in place that ensure their compliance with Equality Act
2010.
 

Data Protection Implications:
 
A Data
Protection Impact Assessment (DPIA) has been completed and no
anticipated new data protection implications have been identified.
Providers tendering for the contract extension will be expected to
undertake a DPIA as part of their tender submission.
 
 
 
 
 
 
 

Decision

Decision:
As Cabinet Member for Adult Social Care and
Public Health, I agree to:
a) EXTEND the current Older Persons
Residential and Nursing contract for up to a maximum of two years
(1 April 2024 to 31 March 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.