This guidance sets out the support for local authorities in administering the Market Sustainability and Fair Cost of Care Fund.
Reports on a survey of the costs of care homes for older people and visit-based home care services carried out during summer 2022 to prepare for the planned (but subsequently deferred) implementation in October 2023 of reforms to adult social care funding have been completed. The Government's Department of Health and Social Care (DHSC) asked all local authorities responsible for adult social care to survey care homes for older people and home care services in their area about the costs of providing their services.
The specific reason for carrying out these surveys in 2022 was the plan to change the statutory framework for adult social care in ways which would entitle anyone needing care home accommodation to ask the local authority to contract for this, regardless of their financial circumstances.
After the survey was completed, and the results submitted to DHSC, it was announced that those reforms would be deferred for two years, and we are not certain whether they will now proceed in their original form.
Because local authorities usually, at present, contract only for people who cannot afford to pay care home fees themselves, the reforms would have made local authorities responsible for many people who, under the current system, would contract with a care home privately. Since many care homes for older people charge higher fees to private residents, this could have caused significant financial issues for both care home operators and local authorities.
The Government's expectation was that the survey would provide an indication of the extent to which fees paid by local authorities might need to rise as this change took effect, to minimise the impact on care home operators.
The Government had also carried out financial modelling which suggested that many local authorities were paying fees for both care home accommodation and visit-based home care services which were not as high as was necessary to sustain the long-term viability of the services. DHSC published an impact assessment about the charging reforms that the Government was expecting to introduce in 2023 which explains their expectations about the impact of the reforms on care homes, and the increases to fee levels likely to be required, and guidance about the 'fair cost of care' survey was published in July 2022.