When a new obligation is placed on non-council providers of social care services, it has become less certain that the additional costs involved will be taken into account and the funding adjusted to cover them. And, where a recent procurement process covered new costs for care homes, providers of care at home services were overlooked. This, says Lynn Laughland, raises questions about how these costs are being accounted for in government's approach to social care.

When the increase to employer National Insurance took effect last year, Scotland Excel made a quiet but telling decision. Within the National Care Home Contract, it adjusted the Care Home Cost Model to reflect the new cost, describing the change as an unfunded commitment for local authorities but one included to protect the integrity of the cost model.

A related committee paper went further, removing the National Insurance element from provider return calculations entirely, in recognition of the pressure it created.

No equivalent decision was made for care at home.

The same policy change, imposed on the same day, was funded in one commissioned service and left unaddressed in another.

I raise this not to single out one organisation, but because it captures something important about how Scotland currently treats statutory cost in social care.

When a new obligation lands on providers, whether it is a tax change, an employment right, or a regulatory duty, there is no consistent expectation that the commissioned rate will move to reflect it. Some services get that recognition. Others do not, and the difference does not appear to follow any principle beyond which contract happened to be under review at the time.

Over the past eighteen months I have catalogued at least ten distinct statutory and regulatory obligations added to the cost of commissioned care at home in Scotland: the National Insurance change itself, the Employment Rights Act arriving in stages through to 2028, a new proactive Fair Work Agency with the power to investigate without a complaint being made, right to work enforcement carrying personal criminal liability for providers, a Freedom of Information extension under consultation, and the early stages of national sectoral bargaining. In every case, the commissioned rate has not moved.

This matters legally as well as financially. Every local authority in Scotland carries a Best Value duty under section 1 of the Local Government in Scotland Act 2003, to secure continuous improvement having regard to economy, efficiency, effectiveness and sustainability.

Established case law, including Sefton, Mavalon and the more recent SARCP judgment, confirms that a commissioning authority setting a care rate must properly evidence the cost of the care it is commissioning.

A rate that has not been reviewed against ten new statutory obligations in eighteen months sits uneasily against both of those requirements, and I do not think that is a comfortable position for any commissioning authority to be in once the evidence is set out plainly.

Closed loop methodology

There is a specific methodological problem worth flagging for anyone reviewing how these rates are set.

The Scottish government's own National Weightings Review, completed with the majority of Scotland's HSCPs, concluded that current weightings were allowing policy intent to be met, but that conclusion was reached because no provider had formally complained of insufficient funding, not because of any independent assessment of whether the rate is adequate.

The review's cost data was also drawn from what HSCPs currently pay for care, not from what care costs to deliver lawfully. Those are different figures, and a review calibrated against commissioning behaviour rather than the cost of lawful delivery cannot reliably tell the difference between a formula that is working and one that only appears to be working because providers are absorbing the gap through unpaid travel time, thinning margins and, at the extreme end, non-compliance they did not choose.

None of this is an argument against the obligations themselves. Fair pay, safe recruitment and proper sick pay are commitments I hold without reservation. The argument is narrower: that a commissioning system which imposes new statutory duties without a mechanism for reviewing the rate that funds them is storing up risk it has not yet had to face, whether that risk lands on provider viability, workforce pay, or the continuity of care a person receives in their own home.

What would help most is something Scotland Excel has already shown is possible for one part of the sector.

A standing mechanism, applied consistently, so that a new statutory duty triggers an automatic review of the commissioned rate, rather than depending on which contract happens to be under negotiation when the change arrives.

That is not a request for special treatment. It is a request for the same principle already applied once, applied everywhere.

Lynn Laughland MBE is Chief Executive of HRM Homecare Services Ltd and HSC Futures Ltd.    As a guest contributor, her views are her own.

 

Read more from Lynn: Care at home: A guide for new health ministers; Care pay reform must come with stability not strain; Step away from the skills funding cliff edge; Why I created our Homecare Wellness Care Team; Insight: Where is the “levelling up” for social care?

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