Find out how we will work towards making care markets in Torbay sustainable.
As part of the Fair Cost of Care, we are required to publish a market sustainability plan to assess and demonstrate how we will work towards making local care markets sustainable.
The current published Joint Strategic Needs Assessment (JSNA) for Torbay and the 2021-22 Adult Social Care Market Position Statement (MPS) on the Council’s website, shows that 27% of Torbay’s population of 140,000 are aged 65 or over (compared to just 18% of the population across England) and by 2040 this is expected to rise to 34%. Torbay has a resident population of 136,264 people. In Torbay, disability-free life expectancy at birth is lower for both men and women than in England as a whole. Torbay GP registers show higher percentages of multiple long-term conditions that are associated with much higher healthcare costs, unplanned hospital admissions, delayed transfers of care and long-term institutionalisation. Frailty estimates for Torbay show that over the next 10 years frailty rates will increase by 25% to over 5000 people and prevalence data estimates show that over the next 10 years, the number of people living with dementia will increase by over 30% to 3300 people.
Without mitigation, commissioners expect demand for all care home beds, and particularly complex dementia care beds, to increase significantly in the face of these demographic and public health pressures. The bed-based care market faces ongoing challenges from the pandemic and challenging economic conditions, affecting sustainability, workforce, recruitment and retention difficulties. These pressures have forced up wages to compete with comparator jobs outside the local care sector, which are now more attractive financially to potential employees. Torbay’s projected inflation uplifts for 22/23 will enable bed-based care providers to pay the increased National Living Wage. However, it will not enable those providers to pay rates above the National Living Wage that they increasingly believe are essential to keep existing skilled staff or to attract right new entrants to the care market over the longer term.
An insufficient supply of carers, despite support around international recruitment, and growing demographic challenges related to an aging population have also increased demand. Care homes with nursing have the added pressure of an aging professional workforce and increasing difficulty attracting nurses to work in the care sector rather than the NHS.
The current MPS indicates that if the workforce grew proportionally to the projected number of people over 65, then the number of adult social care jobs in the South West region would need to increase by 37% (from 168,000 to 230,000 jobs) between 2020 and 2035. Unfortunately, Torbay 65+ care homes are now carrying vacancies that they cannot fill due to long term staff shortages and, in many cases, this is causing significant financial risk, along with some accompanying evidence of a deterioration in service quality across the sector.
The 66 over-65 care homes in the Torbay adult social care market are run predominantly by independent organisations with a purely local presence, either as individual homes or small groups, with limited representation from national providers. All state-funded bed-based care in Torbay is bought by and contracted to the NHS via the council’s integrated care organisation, Torbay & South Devon NHS Foundation Trust.
Of the total supply, 51 homes are residential-only, with 36 of those providing some level of dementia provision, and 15 are care homes with nursing, with 9 of those providing complex dementia provision. Over 90% of these services are delivered in buildings built in the 19th century, presenting added financial and operational challenges for the workable delivery of care to people with increasingly complex needs.
21 of the total number of over-65 care homes fall outside the Institute of Public Care’s assessment of long-term viability, mainly due to the size of the homes at less than 25 beds and the low suitability of the buildings for complex care delivery. Commissioners have already found that to meet changing demand over the next 10 years in Torbay, the local care market has an over-supply of approximately 200 residential-only care home beds and an under-supply of 200 complex dementia-capable care home beds with nursing.
This means that new-build provision care home for dementia care, bariatric care and high physical dependency is essential, but this requirement presents a further risk in an economic climate that inhibits investment by existing and new providers. Many homes are not suitable for cost-effective modernisation and as a result, commissioners have assessed that approximately half of the current oversupply of low-capability care home beds needs to be addressed by supporting some providers to permanently exit the market.
Given Torbay’s current mix of state-funded services versus self-funders, the local authority is confident that the government’s delay in implementing charging reforms are not currently affecting sustainability within the bed-based care market locally.
All the demographic and economic factors facing 65+ bed-based care providers apply equally to the Torbay 18+ domiciliary care sector. Commissioners are aware that the domiciliary care market faces ongoing challenges from both the pandemic and the challenging economic conditions, affecting sustainability, workforce, recruitment and retention difficulties. These pressures have forced up wages to compete with comparator jobs outside the local care sector, which are now more attractive financially to potential employees. Torbay’s projected inflation uplifts for 22/23 will enable domiciliary care providers to pay the increased National Living Wage. However, it will not enable those providers to pay rates above the National Living Wage that they increasingly believe are essential to keep existing skilled staff or to attract suitable new entrants to the care market over the longer term.
An insufficient supply of carers, despite support around international recruitment, and growing demographic challenges related to an aging population that were worsened by the pandemic, caused demand for domiciliary care to increase by almost a third during 2021 in Torbay. This demand has now flattened in 2022, and when compared with the pandemic period the Torbay system is now seeing a more consistent balance between supply and demand. This is subject to seasonal fluctuations, such as winter pressures, and commissioners put various mitigations in place to increase supply during peaks in demand – this has included temporary rate increases for home care workers delivering more hours.
There are currently 19 domiciliary care providers contracted to provide home care services under the Torbay Living Well @ Home Framework. Most of these providers are small independent businesses that run primarily within the footprint of Torbay and south Devon. Only one supplier to the Framework has significant provision in other areas of the southwest or wider UK.
Of the 19 suppliers, 12 of these providers each hold less than 5% market share, 5 hold shares of between 6-9% and 1 provider holds 33% of market share.
Given Torbay’s current mix of state-funded services versus self-funders, the local authority is confident that the government’s delay in implementing charging reforms are not currently affecting sustainability within the domiciliary care market locally
Work is ongoing to calculate the extent of the privately funded bed-based care market in Torbay. As a result, it is not yet possible to fully assess the long-term impact of differential costs between self-funders and state-funded beds in care homes. Initial modelling in February 2022 shows a potential maximum demand of 577 beds (approximately 25% of current supply). The local authority is currently basing its financial strategy on the government replacing the income lost through this area of social care reform. It should therefore be noted, as the local authority endeavours to move toward the fair cost of care and a sustainable care market, fees can only increase to the level of funding awarded by the government.
A model is being developed to understand privately funded Care Act-eligible demand in domiciliary care. In addition to supporting an assessment of market impact, this model will be used to understand whether current systems and processes are fit for purpose and to prioritise operational changes to support the implementation of Care Accounts.
Torbay has a limited number of privately funded nursing beds and has already implemented significant fee inflation in this sector over the last 2-years. This will reduce the impact of market change in this area.
Overall, without any mitigating commissioning activity to adjust the trajectory of Torbay’s adult social care market, the outputs from the Fair Cost of Care exercise for in-scope services would result in a £4.4M cost pressure to the total current budget for adult services in Torbay. However, this would inevitably affect adult social care services that are outside the scope of this exercise, so applying the same indicative fee uplifts highlights an added potential cost pressure of just over £4M.
As Torbay has a longstanding and highly effective integrated health and social care system, the local authority and our partner NHS Trust have developed and published a 10-year ‘Blueprint for Adult Social Care Market Transformation 2020-2030. This sets out the expected changes in the market over that period and the actions the Torbay system will be taking to manage those changes.
When meeting the health and care needs of older people, the Torbay health and social care system has long been more dependent on the use of bed-based care than its comparator and neighbouring local authorities. While commissioners can do little about the impact of pending caps on the cost of bed-based care for self-funders, there are several mitigating measures that are in progress to reduce the use of non-complex residential care without nursing and better control of the cost of complex / nursing bed-based care. Even outstanding residential care is a less enabling model than supporting someone to have choice and control in their own home, therefore commissioners believe that state-funded bed-based care should be regarded as an end-of-life model of care for most users. The effectiveness of this approach is enhanced by the fact that Torbay has run an integrated health and social care system since 2004, from our acute hospital all the way through to community health provision and adult social care.
This approach is set out in the 10-year joint local authority and local NHS ‘Blueprint for Market Transformation in Torbay’, utilising data set out in the 2021-22 Torbay Market Position Statement and the current Joint Strategic Needs Assessment for Torbay.
In the case of non-complex residential care without nursing, it is essential to continue with measures to divert older people away from bed-based care, meeting their assessed care needs using community and housing-based models of care and support. This is achieved through several measures covering short, medium and long-term trajectories:
Short-term diversion is managed through:
Medium term diversion will be achieved through:
Long-term diversion, beyond the 1-to-3-year scope of this exercise, is supported through:
In the case of complex / nursing bed-based care, the Torbay health and care system faces a well understood demographic pressure, causing increased demand for beds due to a large ageing population and an increasing incidence of dementia and other long-term health conditions. The more complex end of the bed-based care market has few self-funders and is commissioned by the local authority and NHS. Service inputs are intensive, and the costs are increasing due to the economic and social pressures set out earlier in this paper. However, some level of mitigating activity is possible to better manage costs of complex and nursing provision, in addition to the activity set out for less complex bed-based care:
In 2022-23, the council has used the Fair Cost of Care funding to move towards closing the gap between the current average local authority fee and the average cost of 65+ bed-based care, targeting key services supplying essential capacity, as shown through the Fair Cost of Care exercise. Maintaining an effective supply of complex care beds, whilst continuing to reduce the supply of low capability beds, is the most pressing market issue for health and social care commissioners at the current time.
In 2023-24 and 2024-25, it is the council’s intention to use any further Fair Cost of Care funding for those periods to continue this work within the care home sector, by targeted spending activity in two key areas:
The council will undertake detailed costings once final Fair Cost of Care allocations are confirmed for 23/24 and 24/25 and these will be actioned within the budget provided.
The continued delivery of effective and affordable services to enable vulnerable adults to remain living independently at home is critical to the transformation of adult social care in Torbay. As with bed-based care, the market approach for domiciliary care is set out in the 10-year joint local authority and local NHS ‘Blueprint for Market Transformation in Torbay’, utilising data set out in the 2021-22 Torbay Market Position Statement and the current Joint Strategic Needs Assessment for Torbay.
Commissioners must now review the composition of the current domiciliary care market and accelerate the strength-based approach that successfully diverts people away from needing state-funded care. The effectiveness of this approach is enhanced by the fact that Torbay has run an integrated health and social care system since 2004, from our acute hospital all the way through to community health provision and adult social care.
The indicative Fair Cost rate nearest to both the current Torbay 22/23 rate of £22.48 and the suggested UK Home Care Association (UKHCA) equalised 22/23 rate of £23.20 is from a national provider able to deliver sustainable services at a cost close to the UKHCA rate. It is understood that both rates will be subject to the usual inflationary pressures but still supply a helpful national comparator for domiciliary care rates. The local authority is aware that UKHCA are seeking a 12% uplift on this rate for 2023/24, but commissioners are confident this position will be softened by the expected adjustments in the economy during the coming year.
There have been significant changes in the economics and mobilisation of domiciliary care over the last 2-3 years, which combine to undermine the relative effectiveness of Torbay’s current provider ecology and have contributed to inflated costs. Given the dual risks of increasing demand and market sustainability, commissioners from the local authority and local NHS now expect to conduct a redesign of the commissioned Torbay domiciliary care market over the next 2-years, adjusting the market ecology to mitigate cost / risk more successfully.
Finally, commissioners will look to make best use of any opportunities for greater efficiency that might be offered through the integration with the Local Care Partnership across Torbay, Plymouth and Devon.
In 2022-23, the council has not used any of the Fair Cost of Care funding to support the domiciliary care market in Torbay. As described above, activity has instead focused on market mitigation activity around bed-based care for people 65+.
In 2023-24 and 2024-25, it is the council’s intention to consider using any further Fair Cost of Care funding for those periods within the domiciliary care sector in Torbay to continue to move toward an improved hourly rate, reflective of national rates.