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This publication is available at https://www.gov.uk/government/publications/adult-social-care-market-shaping/adult-social-care-market-shaping
This document is to help people and organisations understand adult social care market shaping and how to take action.
It is aimed at:
- people who buy social care services which includes local authorities, clinical commissioning groups (representing GPs and hospital trusts), personal budget holders and people who meet all or some of their own costs, commonly referred to as self-funders
- providers of social care services including those regulated by the Care Quality Commission (CQC) such as residential and nursing care providers, homecare providers, supported living services
- wider services which support well-being of local populations including community and voluntary services, micro and social enterprises, personal assistants, housing, leisure, transport, and information and advice services
- a range of potential investors in the social care market from corporate investors through to charitable or philanthropic donations
Overview: adult social care market shaping
Responsive and sustainable markets in adult social care can be developed and supported in 3 ways:
Activity to understand your local market of care providers and stimulate a diverse range of care and support services to ensure that people and their carers have choice over how their needs are met and that they are able to achieve the things that are important to them. It is also about ensuring that the care market as a whole remains vibrant and stable.
Local authorities have duties to step in around provider failure. The formal CQC market oversight regime helps local authorities carry out that role in relation to large regulated care providers. The scheme aims to help protect people using care services, their families and carers from the anxiety and distress that may be caused by the failure of a major care provider by monitoring the performance and finances of the most significant difficult to replace social care providers in England and giving Local Authorities an early warning where there is a risk of business failure and a provider is likely to become unable to continue to deliver a service.
Preparing for any provider failure to ensure that people continue to receive the care and support they need should their care provider cease to provide services. It should be a broad activity to manage risks around service interruption, including the financial failure of providers but also extending to other reasons such as quality failings.
Legislation and statutory guidance
The Care Act 2014 sets out the law around market development in adult social care. It enshrines in legislation duties and responsibilities for market-related issues for the Department of Health, CQC and for local authorities.
Section 5 - sets out duties on local authorities to facilitate a diverse, sustainable high quality market for their whole local population, including those who pay for their own care and to promote efficient and effective operation of the adult care and support market as a whole.
section 48 to 56 - ensures that no one goes without care if their provider’s business fails and their services cease. It covers:
- CQC market oversight
- local authority duties for ensuring continuity of care in the event of provider failure and service cessation
Adult social care market roles and responsibilities
At a local level a range of different people and organisations will play a part in the development of an effective care market. The following organisations have specific roles and responsibilities in relation to care market development:
Department of Health
- lead government department for adult social care (ASC) markets
- national leadership and co-ordination market management and contingencies
- working with Department for Communities and Local Government (DCLG) to input to the spending review to determine the overall funding settlement for councils and the rational allocation of that settlement between councils
- guidance and support to local government (with support from DCLG)
Local authorities (152 upper tier)
- meet needs of people eligible for care, support them and their carers, and fund care for those people with needs who meet financial eligibility criteria
- local market shaping to encourage quality, choice and sufficiency of provision
- local contingency planning in case of provider failures
- ensure care is maintained where provider fails financially and services cease – for everyone, including self-funders, to ensure people’s needs continue to be met
- work with NHS to promote integration including integrated commissioning and joined up services
- at national level, Association of Directors of Adult Social Services (ADASS) has a role in supporting contingency planning for provider failure and collaboration on market shaping regional collaboration (via ADASS) on market shaping
Care Quality Commission
- registers all providers of regulated activities
- monitors, inspects and rates registered care providers to ensure quality
- takes enforcement action where quality is poor, with powers to close providers when needed
- market oversight of the largest and difficult to replace care providers – early warning to local authorities in the event of business failure and cessation of service.
- commissioning of continuing health care
- duty to promote integration between the health system and social care
- local market shaper, for example NHS vanguards and sustainability and transformation plans
- local partner working with local authorities to help support contingency planning and sustainability of care services
Market demands and trends
This is an overview of some of the fundamental economic and demographic research and evidence relating to current and future supply and demand in the adult social care sector in England. This is not a definitive list, but does include the main sources which should be familiar to local authority staff who are involved in producing Market Position Statements.
The social care sector
NHS digital publish an annual data collection and assessment of money spent on adult social care by the social services departments of Councils with Adult Social Services Responsibilities (CASSRs) in England (the latest publication was November 2015).
Increase in demand for adult social care
Demographic trends are likely to lead to increasing future demand for adult social care. You can read the most recent Office of National Statistics (ONS) population estimates and subnational population projections.
The Personal Social Services Research Unit (PSSRU) – a joint unit of the Universities of Kent, Manchester and the London School of Economics – have published a range of research about the increasing demand for adult social care. You can read the most recent assessment of future demand
Size of state-funded and privately-funded markets
Eligibility for stated funded social care is determined by eligibility assessment based on a number of criteria including a person’s level of financial assets. The report from PSSRU 2015 estimates and projections for 2035 were approximately:
- people who receive a direct payment - 46,000 (projected to grow to 74,000)
- publically funded people using home care - 211,000 (projected to grow to 394,000)
- privately funded people using home care - 94,000 (projected to grow to 140,000)
- publically funded care home residents - 172,000 (projected to grow to 257,000)*
- privately funded care home residents - 157,000 (projected to grow to 330,000)*
(The report does not include NHS funded nursing)
Regular assessments of the care home market are available to purchase from Laing and Buisson
Local authority and NHS spend on adult social care
For those eligible for state funding, adult social care and its expenditure is a local authority level responsibility. The NHS contributes or fully funds the costs of care in some cases, where individuals are eligible for either NHS funded nursing care or continuing health care.
The latest NHS continuing healthcare activity statistics were published 16 September 2016.
The government’s Spending Review 2015 set out the overall funding for local authorities up to 2020 including:
- a social care precept to give local authorities who are responsible for social care the ability to raise new funding to spend exclusively on adult social care – the precept works by giving local authorities the flexibility to raise council tax in their area by up to 2% above the previous threshold. If all local authorities use this to its maximum effect it could help raise nearly £2 billion a year by 2019 to 2020
- additional social care funds for local government from 2017 additional, rising to £1.5 billion by 2019 to 2020, to be included in an improved Better Care Fund
DCLG publish annually budget estimates of local authority revenue expenditure and financing. These show plans for local authority expenditure on all services including adults social care.
NHS digital publish an annual data collection and assessment of money spent on adult social care by the social services departments of CASSRs in England. The last publication was in October 2016.
Fee level trends
The annual ADASS budget survey 2016 provides an overview of the state of adult social care finances drawn from the experiences of current leaders in adult social care, include trends in fee levels.
Unit costs of health and social care set out the average costs of the health and social care workforce.
Size and shape of the social care workforce
The size and shape of the health and social care workforce is important for delivering high quality adult social care services. Skills for Care publish regular reports on the social care workforce and future projections.
- Skills for Care comprehensive overview of the size and structure of the adult social care sector and workforce in England
- Skills for care provide a comprehensive assessment of the characteristics of the adult social care workforce in England
Alternative care models
Integration of health and social care services is an important challenge for the NHS and the social care system. Read about local areas acting as “pioneers” to test approaches to integrating health and social care services around the needs of the individual patient or user.
New care models
NHS England are leading a programme to test new models of care in local health and social care systems.
This includes enhanced health in care home vanguards which will offer older people better, joined up and person-centred health, care and rehabilitation services
The Framework for Enhanced Health in Care Homes sets out a clear vision for providing joined up primary, community and secondary, social care to residents of care and nursing homes, via a range of in reach services.
Informal care and carers play a vital role in the health and well-being of people with care needs. The 2011 census estimated that there are approximately 5.4million carers in England and ONS have estimated that the value of informal care was approximately £53.6 billion per year in 2014.
Quality ratings and characteristics of adult social care providers
The Care Quality Commission (CQC) inspect and regulate all regulated adult social care providers. By April 2017 CQC will have awarded a single quality rating “outstanding”, “good”, “requires improvement” or “inadequate” to all regulated adult social care providers (who were registered before 1 October 2014).
You can find the CQC ratings for care providers on the CQC website and the characteristics of what care looks like for each rating in are available in annex B of the Community adult social care provider handbook - appendices and the Residential adult social care services provider handbook – appendices.
The published characteristics provide transparency for commissioners, funders and providers about what good care can mean. In developing sustainable and vibrant local markets which deliver high quality care, people may wish to be aware of key trends emerging from the ratings given so far.
For commissioners it will be important to consider these trends and, when large services and nursing home provision in particular are being built or commissioned, how these challenges will be addressed:
- smaller services - both in care homes and domiciliary care providers - perform better than medium or large services
- nursing homes generally perform less well in ratings than other service types
The CQC State of Care Report 2015 to 2016 reported that the adult social care:
- services that were rated good and outstanding engaged well with people who use services, their families and carers, and the community to design care plans, facilities and activities that meet people’s diverse needs and preferences
- quality continued to vary, good systems and management are important drivers that support caring staff to deliver better services
- sector continues to experience financial strain and further savings are difficult to achieve, due to staffing being a high proportion of costs, and profitability is reducing, leading to some services exiting from the market, resulting in people having less choice or experiencing a lack of continuity of service, and delays in securing them a package of good quality care that meets their needs and preferences and greater use of unpaid care
- services rated inadequate have subsequently closed and are no longer operating, of the inadequate services re-inspected, 77% showed improved quality of care
Datasets to support market intelligence
The statutory guidance to the Care and Support Act 2014 places an emphasis on the local authority leading a shared understanding of supply (the market) and demand (people’s needs and aspirations). To do this, the local authority will need to draw on a range of data and intelligence.
Section 1.3 of What is Marketing Shaping? – Institute for Public Care 2016 provides more information on market intelligence and the role it can play in market shaping.
These datasets may help aid understanding:
This view-only system is developed by the Institute of Public Care (IPC). It is for use by local authority planners and commissioners of social care in England, together with providers. It is a programme designed to help explore the possible impact that demography and certain conditions may have on populations aged 65 and over.
This view-only system is developed by the IPC. It is for use by local authority planners and commissioners of social care provision in England, together with providers. It is a programme designed to help explore the possible impact that demography and certain conditions may have on populations aged 18 to 64.
- Care Quality Commission (CQC) datasets (found under “Download our directory”)
CQC offer publicly available datasets they include the latest CQC quality rating as well as details of registered managers and care home bed numbers. The datasets allow for easy filtering by the regulated activities, service types or service user bands and include brand information.
The NMDS-SC is the leading source of workforce intelligence for the care sector. It is an online database which holds data on the adult social care workforce. It is the leading source of workforce intelligence and holds information on around 25,000 care establishments and 700,000 workers across England.
Explore the latest data on outcomes for adults, including carers, using local authority funded care and support in each local authority area.
The MyNHS website offers download and takeaway data in a number of relevant areas including care homes with nursing and care homes without nursing and local authority performance.
Market development – guidance and resources
The Department of Health and a range of partner organisations have developed a range of guidance and resources which will support local people and organisations in care market shaping and development.
Market shaping is activity to stimulate a diverse range of care and support services to ensure people’s needs are met and that the market as a whole remains vibrant and stable. The following paragraphs are from the Statutory Guidance to the Care Act 2014 and apply to local authorities, however, they are also applicable to other organisations with market shaping roles such as NHS clinical commissioning groups (CCGs).
Market shaping means the local authority collaborating closely with other relevant partners, including people with care and support needs, carers and families, to encourage and facilitate the whole market in its area for care, support and related services. This includes services arranged and paid for by the state through the authority itself, those services paid by the state through direct payments, and those services arranged and paid for by individuals from whatever sources (sometimes called ‘self-funders’), and services paid for by a combination of these sources. Market shaping activity should stimulate a diverse range of appropriate high quality services (both in terms of the types of services and the types of provider organisation), and ensure the market as a whole remains vibrant and sustainable.
The core activities of market shaping are to engage with stakeholders to develop understanding of supply and demand and articulate likely trends that reflect people’s evolving needs and aspirations, and based on evidence, to signal to the market the types of services needed now and in the future to meet them, encourage innovation, investment and continuous improvement. It also includes working to ensure that those who purchase their own services are empowered to be effective consumers, for example by helping people who want to take direct payments make informed decisions about employing personal assistants. A local authority’s own commissioning practices are likely to have a significant influence on the market to achieve the desired outcomes, but other interventions may be needed, for example, incentivising innovation by user-led or third sector providers, possibly through grant funding.
Institute for Public Care (2016): Market Shaping Review
The Department of Health, the Local Government Association (LGA) and ADASS commissioned the IPC at Oxford Brookes University, working in collaboration with the Care Provider Alliance, to undertake a Market Shaping Review. The review aims to support local authorities to help them discharge their market shaping duties by identifying, analysing and disseminating best practice.
The review also includes a range of guidance and resources:
Market Shaping Toolkit supports smaller care providers and local authorities to engage in market shaping and develop innovative practice to meet local needs together
market position statement database is a fully searchable database of all published market position statements in England
market position statement guidance aims to help local authorities develop an effective market position statement (MPS) (an MPS is required to ensure local authorities meet their ‘market shaping duties under the Care Act 2014’)
market shaping for individual purchasers of care details what market shaping means for people with personal budgets, direct payments, and for self-funders who buy their own care and support
place-based market shaping: co-ordinating health and social care is aimed at health and social care commissioners and explores the importance of developing a place-based approach to shaping the care market, integrating the health and social care systems where appropriate
cross local authority and regional working on market shaping explores when and how local authorities might take a joint approach to market shaping
CQC role in market oversight
The market oversight scheme, started 6 April 2015, is a national scheme run by CQC in England. Its core purpose is to protect people using care services, their families and carers from the anxiety and distress that may be caused by the failure of a major care provider. This is done by monitoring the performance and finances of the most significant difficult to replace social care providers in England and will give local authorities an early warning where CQC think one of these is at risk of failure and is likely to become unable to continue to deliver a service. Local authorities are responsible for ensuring continuity of care.
The scheme is intended to spot potential failure so the right people can take the right action. CQC will not be bailing any providers out or acting as a lender of last resort. CQC have been given this responsibility, as there is clear link between financial performance and quality of care. At present, there are 50 providers in the Scheme, who are included because they are difficult to replace, not because CQC has assessed they have a risk of failure.
CQC market oversight - what it means for care providers and the Market oversight full guide for providers have further details.
Local authority role in local market oversight
There will be some care providers which are hard to replace locally, for example a specialist provider or a significant local provider. These may not be covered by the CQC national market oversight regime.
The Department of Health commissioned comprehensive market sustainability guidance and toolkit that was produced following extensive consultation with the sector and with the input of an expert panel. The guidance represents a robust but straightforward way that councils can engage in light touch market oversight to help them understand better the sustainability of their local care markets and the providers within them.
CCG role in local market oversight
Clinical commissioning groups and other health services can also play an important role, in particular through the exchange of intelligence they hold about local providers with which they have contact with or from which they commission services.
The Department of Health retains responsibility for leadership and coordination where care provider failure requires a national response. For example, the failure of a particularly large operator or a provider that delivers difficult to replace specialist services.
The action taken will depend on the circumstances, but will typically involve:
- setting the framework for different parties involved in a response, for example the CQC market oversight team, ADASS and LGA
- managing national media
CQC would also likely have an active role where a major provider fails. Where a provider is in the Market Oversight Scheme and is likely to financially fail and their services cease, CQC will notify local authorities and Government. CQC’s Market Oversight team will liaise with the local authorities to assist the local response. CQC will also continue to monitor quality whilst a commercial solution is sought and lead on the registration of new services.
At national level, ADASS has a role in supporting contingency planning for provider failure and collaboration on market shaping regional collaboration (via ADASS) on market shaping.
Local authorities and contingency planning for provider failure
From April 2015, local authorities have a duty to make sure that people continue to receive the care and support (where they meet eligibility criteria) should their provider fail financially and services cease. This includes people who pay for their own care as well as those who the local authority arrange care for. These duties sit alongside other activities local authorities carry out for contingency planning to protect their local populations.
The Department of Health, ADASS and LGA commissioned the Local Government Information Unit to develop a Contingency planning for provider failure guide to support the implementation of the Care Act 2014.
This guidance outlines some of the reasons care providers fail and how councils have responded to the need to help people find new care. It is also a practical guide to developing contingency and continuity plans to help councils prepare for any provider failure and work through disruption with providers, care users and their families. It was developed through an open process in collaboration with social care professionals, the financial services industry, emergency planners and provider and user representatives.
Directors of adult social care and providers looking to develop business continuity plans will find this a useful overview with checklists to ensure that provider failure is being prepared for. Commissioners and those responsible for developing contingency and continuity plans will find in-depth practical support for the task at hand.
Clinical commissioning groups and contingency planning for provider failure
Whilst the lead for contingency planning for care provider failures sits firmly with the local authority, CCGs have an active role to both help enhance the resilience of care providers in their area and to act quickly in the event of provider failure.
NHS England has developed a Quick guide: Managing care home closures, which sets out ways in which CCGs might engage in contingency planning for care home failures.
Resources for commissioners
Commissioners (local authorities and CCGs) are important shapers of the market as they work to understand the care and support provision needed now and in the future, and act on that intelligence to ensure delivery of the required services.
Commissioning by local authorities is cyclical activity to assess the needs of its local population for care and support services, determining what element of this should be arranged by the authority, then designing, delivering, monitoring and evaluating those services to ensure appropriate outcomes.
Commissioning is shaped more by the outcomes commissioners and individuals identify, rather than volumes of activity expected, and commissioners have sought to facilitate flexible arrangements with providers for other forms of service to support choice and control, such as individual service funds (ISFs).
The Health Services Management Centre has co-produced a set of commissioning standards, Commissioning for better outcomes: a route map. The standards are designed improve commissioning, provide a framework for councils to self-assess their progress against best practice and enable them to identify areas for further improvement.
Commissioners need to strike a delicate balance between making the most of limited resources and meeting statutory requirements to shape sustainable care markets for their local populations. Working with care providers to understand costs aims to enable and equip commissioners with the knowledge and skills to support informed dialogue with providers in the interest of working toward agreed fee rates that are affordable, good value for money and support market sustainability.
Procurement in adult social care is the specific function carried out to buy or acquire the services which the local authority has a duty to arrange to meet people’s needs, to agreed quality standards so as to provide effective value for money to the public purse and deliver its commissioning strategy
Section 5.1.1 of the IPC What is market shaping? provides a useful summary of the role of important role procurement plays in market shaping.
Commissioning and self-funders
Local authorities are required to assess the needs of their whole population, to promote well-being and try keep people healthy for as long as possible and to empower them to make choices about what types of care they receive, regardless of their financial position. As local authorities have little interaction with people who pay for their own care, they may have less understanding about them and the services they need than is needed to meet their new duties.
Understanding the self-funding market in social care: a toolkit for commissioners second edition may support better analysis of self-funders by local authorities.
Other commissioning resources
New Economics Foundation: Commissioning for outcomes and coproduction sets out a model for designing, commissioning and delivering services.
Commissioning for market diversity may help commissioners focus on the work they need to do in developing a care and support market that reflects the diversity of their local population and offers choice to all. The Think Local Act Personal Partnership (TLAP) have produced 10 top tips on commissioning for market diversity and includes examples and links to further information that will help councils assess their progress in meeting market shaping duties and developing a diverse local market, as defined in the Care Act 2014.
People not process - co-production in commissioning
Co-production is a way of developing services that better meet people’s needs by actively involving all stakeholders. Interactive guidance, developed by the Think Local Act Personal Partnership (TLAP), on co-production in commissioning for commissioners, providers and people with care and support needs, carers and family members includes practical examples where places have made co-production part of the process of commissioning services and shaping the market.
Workforce aspects of the care market
Workforce is the biggest input in delivering care, so commissioners and providers need to give due time and attention to the skills, knowledge and roles needed to provide local services is central to good commissioning. This is to help ensure that local care provider organisations maintain and develop a pool of skilled care workers.
Workforce commissioning is about:
- commissioners analysing local workforce needs
- planning how they and providers are going to get and build the skills and knowledge of the workforce
- taking action through a range of workforce interventions to build confidence, capability and capacity
This may be necessary where local care providers alone are unable to recruit and retain an effective workforce. Read the Workforce commissioning and workforce shaping guidance.
The Workforce capacity planning model details what actions to take to change the capacity of your local workforce to deliver excellent care and support.
The Workforce outcome measurement model helps commissioners to make sure they are using resources for workforce development effectively.
Market shaping in practice – examples
There are many ways in which local people and organisations can influence and shape the care market in their areas. These examples help provide ideas and practical examples to develop your local care market.
Supporting good market shaping
Local market shapers can take action to influence their adult social care market:
- local authorities, CCGs and other local partners investing in training and development for care staff in an area to help providers address gaps in service provision or failings in quality
- local authorities investing in information and advice services to give local people easy access to information about a broad range of services which might meet their care and support needs. Examples of online marketplaces:
- online self-service can deliver a range of positive benefits including improved outcomes for service users and carers, better management of demand, better-quality interactions with council services and potential cost efficiencies in meeting the capacity challenge. The vast majority of local authorities are planning to introduce some form of online self assessment for people and their families who believe they need help. Read the LGA and ADASS on engaging citizens online: briefings to support digital adoption
- helping reduce the regulatory and inspection burden on local providers can make them more effective and efficient, for example, extending access to reduced priced mandatory regulatory testing such a PAT electrical testing which some local authorites already buy in on behalf of schools and other public buildings, developing of information sharing agreements between local commissioners to help reduce the burden of reporting on local providers
- local authorities playing an active role in identifying gaps in service provision, via surveys and information collected from commissioners and social workers, and engaging with their provider market and more widely to explore options for new and innovative approaches, for example, through micro-providers
The IPC market shaping toolkit provides local authorities with some new ideas and suggestions about who to engage with, why and how, in local care markets. For providers it offers stimulus and encouragement to ask local authorities ‘Why are we not doing this?’
Five Year Forward View - NHS enhanced health in care home vanguards
The 6 enhanced health in care home vanguards offer older people better, joined up health, care and rehabilitation services. These new care models include:
- enhanced primary care support
- multi-disciplinary team support including co-ordinated health and social care
- reablement and rehabilitation
- high quality end of life care and dementia care
- joined up commissioning and collaboration between health and social care
- workforce development
- data, IT and technology
A common framework for local health and care systems, organisations, communities and patients, wishing to develop and implement the new ways of working tested within the enhanced health in care homes vanguards is available.
NHS quick guides: transforming care services in England
NHS England and partners have published a series of quick guides to support local health and care systems. The guides provide practical tips, case studies and links to useful documents, which can be used by commissioners to implement solutions to commonly experienced issues, and may be of interest more widely.
The quick guides cover:
- managing care home closures
- supporting patient choices to avoid long hospital stays
- better use of care at home
- clinical input to care homes
- identifying local care home placements
- technology in care homes
- improving hospital discharge into the care sector
- sharing patient information
Access to funding streams
Big Society Capital has been set up to help make sure that charities and social enterprises can find appropriate and affordable repayable finance to meet their capital needs. They play a dual role as investor and champion.
Investments relevant to social care market development include:
The Care and Wellbeing Fund - finance to develop and scale community care services for people affected by cancer and long term conditions.
The Growth Fund - designed to increase the availability of small affordable unsecured loans for charities and social enterprises.
Developing and Empowering Resources in Communities (DERiC) - loans to community-owned social enterprises that engage community supporters to improve social care services.
Good Finance website - aims to help improve access to information on investment and finance for charities and social enterprises.