Jury still out on homecare providers' future

Friday, November 07, 2008

With funding a very contentious issue among homecare providers, the Uk Homecare Association's Head of Policy and Communication, Colin Angel, looks at the struggles faced by homecare providers and explores the possible reality that the cost of care will be more important than its quality

Social care is enjoying its own renaissance in government thinking. Serious deliberation on funding for the long term is finally starting, and a green paper eagerly awaited, along with a review of eligibility criteria for state funded care. Much ink has been spilt on service user choice, personal budgets. The importance of dignity in care is being driven by Phil Hope, Care Services Minister.

But at ground level, for independent homecare providers – who supply over six million hours of care a week – government policy intentions are way off the horizon. Homecare is an amazingly creative, flexible service, but providers are only too aware that their ability to work at optimum capacity with an ageing population is severely curtailed by the way services are commissioned, and the direct impact this has on recruitment and rewarding homecare workers.

Once the Comprehensive Spending Review was published – and it didn't make good reading – any commitment from central government to support homecare providers seems to filter down the system with little tangible effect. Frustratingly, the Department of Health appears almost impotent when it comes to influencing local authorities. Government's only real impact seems to come from the Treasury, which has fixated local government on achieving 2.5% Gershon efficiency savings, many of which are neatly off-loaded on to independent sector providers.

In the homecare sector, local government really is the key. What councils pay homecare providers directly affects the wages they pay their workforce. Central government has ignored three separate requests from the Low Pay Commission to review the impact of local authority commissioning on the workforce.¹ UKHCA, the homecare sector's representative association, will be submitting evidence to the commission again this year to inform its report. In the absence of any lead from government, we are using the Freedom of Information Act 2000² to obtain the national and regional picture of how councils have implemented price increases among their providers. We are also investigating claims that at least one local authority commissioner deliberately breached their contract by making no inflationary increase to providers while leaving a very heavy sense of 'so sue me' behind.

UKHCA's ongoing campaign highlights the damaging effects of local authority commissioning practice.³ With 12 months of inflationary pressures, it will be little surprise to hear councils pleading poverty to their providers, who, in turn, are growing increasingly anxious about their own cost pressures, some of which are unique to homecare.

Fuel prices have a disproportionate effect on homecare workers, as they not only travel to and from work, but between users' homes. UKHCA research suggests that 64% of providers anticipated being forced to turn down care packages in coming months 'wholly' or 'mainly' because travel costs have become uneconomical. Increasing fuel costs, exacerbated by local authority under funding, could also result in an exodus of homecare workers from the sector, with 78% of employers reporting that fuel prices are having a 'major' or 'severe' impact on their ability to retain their workforce in the previous three months.⁴

Most homecare contracts only permit charges to be generated on the 'contact time' spent with service users – often down to the minute. Providers must pay their workers' travel time, fuel costs and wages from this charge. However, we see a persistent pattern of councils decreasing the contact time for personal care to unacceptable levels.⁵ The combination of the hourly price falling behind inflation and shortening visit times is a recipe for trouble. It makes dignified, user-centred care almost impossible. Cases of well intentioned careworkers providing unpaid care in their own time are becoming all too frequent, running the risk of allegations of inappropriate behaviour – or even abuse – and leaving employers appearing heavy-handed as they enforce strict standards of conduct on their workforce.

Though not unique to the homecare sector, two increases in statutory holiday pay are significant. UKHCA found little evidence of councils recognising this additional burden when the first increase was imposed last October, and significant campaigning will probably be necessary before a further increase due in April 2009.

We have seen isolated examples of councils in England paying a premium to agencies achieving two or three stars in their 'quality rating' (the highest scores available) from the Commission for Social Care Inspection (CSCI). Sadly, councils are just as likely to penalise providers who fail to make the grade in CSCI's new (and as yet unproved) system. The case could be made that this is a reasonable approach and a neat strategy to force lower quality providers from the sector. The result would be improved standards, but reduced capacity. Poor quality care is in nobody's interests, but in a fragile sector, where staff turnover is estimated at 24.9%⁶, a more sensible approach would be to support failing providers and staff to improve. There is no guarantee that careworkers employed by agencies forced into closure would necessarily stay in the sector, rather than find work elsewhere.

There's another snag ahead, possibly not appreciated by the Department of Health. As this article went to press, government had still not specified the date that homecare workers and their managers in England will be required to register with the General Social Care Council (GSCC), despite announcing its intention back in February 2007.⁷ Over a year later, the minister stated that an announcement would come "in weeks rather than months", only to be followed by months of deafening silence. Conjecture is spreading that GSCC registration could be deferred until the implementation of the Independent Safeguarding Authority's scheme in 2009, and the creation of the new health and social care regulator. This would create the possibility of turbulent times ahead, burdensome administration for employers, and new registration fees that could act as a barrier to entry to prospective homecare workers and further weaken staff retention. Any government should think twice before implementing such massive change.

While local authorities enjoy their position as majority purchaser, the NHS has emerged as a competitor. Its Purchasing and Supply Agency (PASA) is in the early stages of tendering for homecare services for the first time. This will be an interesting process. Indications are that PASA is looking for a 'flexible staffing' arrangement – put crudely, extra pairs of hands to cope with short-term fluctuations in demand or supply. This is rather different from the more usual 'managed care service' bought by councils and the public, where the agency itself is responsible not just for supplying a worker, but specifying the policies that must be observed, and monitoring the user's condition and their satisfaction with the service.

The distinction may sound arcane, but it makes a big difference to the obligations between provider and purchaser, particularly which party has control of the worker. Indeed, this arrangement could challenge the regulator too. While inspectors understand the principles of flexible staffing contracts from their regulation of nurses' agencies and care homes, this arrangement has been almost non-existent in homecare, and the Domiciliary Care Agencies' Regulations 2002 and their accompanying Standards were not written with this model in mind.

For providers, contracting with the NHS could be attractive: almost 300 are taking part in the pre-tender process. However, there is the possibility that PASA could decide to use an 'electronic reverse auction' (an 'e-auction'), with providers tendering their prices online in real-time. PASA have used this system in other framework agreements, and it was referred to in their original advertisement.⁸ The principles are similar to eBay, but in reverse. Providers would compete in a live auction to tender prices 'below' their competitors to secure a preferential place in the framework agreement.

It is questionable whether this degree of competitive bidding is in the interests of high quality social care. In the heat of the moment, there is an inherent temptation to bid against competitors to achieve a contract, regardless of any price limit one set before the bidding starts. Paying over the odds for one's private online purchases is one thing, but underselling a significant business opportunity is quite another. An e-auction could potentially tempt providers into a price that impacts on their recruitment and retention, and their obligations to operate safe systems. This isn't in the interests of service users, careworkers, providers or the NHS.

Whether PASA will use an e-auction or not will become clear once the invitation to tender is published. But there is also the possibility that local councils may be able to purchase under the framework agreement: food for thought for anyone who is tempted to bid lower than their costings indicate.

So can homecare providers rely on government to keep their services adequately funded? The jury is still out. If central government heed the Low Pay Commission, and statutory sector purchasers take on board the needs of their ever stretched providers, we could be in with a chance.

1 Low Pay Commission, 'National Minimum Wage. Low Pay Commission Report' for 2005, 2007 and 2008. URL: http://www.lowpay.gov.uk/lowpay/rep_a_p_index.shtml
2 And the Freedom of Information (Scotland) Act 2002, where appropriate
3 More details in Angel C (2007) 'A Fair Price for Care, A UKHCA Position Paper'. URL: http://www.ukhca.co.uk/downloads.aspx?id=114
4 See www.ukhca.co.uk/mediastatement_information.aspx?releaseID=44 for more information
5 For more information, see Angel C (2007) 'Short Care Episodes, A UKHCA Position Paper'. URL: www.ukhca.co.uk/downloads.aspx?id=144
6 Skills for Care (2007) 'NMDS-SC Briefing, Issue 2 - Turnover and Vacancy Rates', page 2. URL: www.nmds-sc-online.org.uk/Get.aspx?id=20033
7 Department of Health (2007) 'New registration for care workers who look after older people, children and vulnerable adults' (Media release of 15th February 2007). URL: http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID=264367&NewsAreaID=2&NavigatedFromDepartment=True
8 The advert can be reached from www.pasa.nhs.uk/PASAWeb/Productsandservices/Agencystaffandoutsourcedservices/Agencyandtemporarystaff/