This chapter provides information to multi-agency practitioners about the duties of the Care Quality Commission under the Care Act 2014, to assess financial sustainability of the most difficult to replace providers, and to support local authorities to ensure continuity of care if providers fail. There is a general duty for the local authority to promote diversity and quality in the market of local care and support providers. It must ensure a range of providers available; shaped by demands of individuals, families and carers; services are of high quality and meet needs and preferences of those wanting to access services.
October 2017: A link has been added to Managing Care Home Closures guidance, as above.
- 1. Introduction
- 2. Definitions
- 3. Principles of Market Shaping and Commissioning
- 4. Undertaking Market Shaping and Commissioning
- 4.1 Understanding the market
- 4.2 Facilitating the development of the market
- 4.3 Promoting integration with local partners
- 4.4 Securing supply in the market and assuring its quality and value for money through contracting
- 4.5 Front line social work practice
- 4.6 Preventing abuse and neglect
- 4.7 Financial sustainability
High quality, personalised care and support can only be achieved where there is a vibrant, responsive market of service providers. The role of the local authority is critical to achieving this, both through the actions it takes to commission services directly to meet needs and the broader understanding of and interactions it undertakes with, the wider market, for the benefit of all local people and communities.
The Care Act 2014 places duties on local authorities to promote the efficient and effective operation of the market for adult care and support as a whole. This can be considered a duty to facilitate the market, in the sense of using a wide range of approaches to encourage and shape it, so that it meets the needs of all people in their area who need care and support, whether arranged or funded by the state, by the individual themselves, or in other ways. The ambition is for local authorities to influence and drive the pace of change for their whole market, leading to a sustainable and diverse range of care and support providers, continuously improving quality and choice, and delivering better, innovative and cost effective outcomes that promote the wellbeing of people who need care and support.
The market for care and support services is part of a wider system in which much of the need for care and support is met by people’s own efforts, by their families, friends or other carers, and by community networks. Local authorities have a vital role in ensuring that universal services are available to the whole population and where necessary, tailored to meet the needs of those with additional support requirements (for example housing and leisure services). Market shaping and commissioning should aim to promote a market for care and support that should be seen as broadening, supplementing and supporting all these vital sources of care and support.
Local authorities should review the way they commission services, as this is a prime way to achieve effective market shaping and directly affects services for those whose needs are met by the local authority, including where funded wholly or partly by the state.
At a time of increasing pressure on public funds, changing patterns of needs, and increasing aspirations of citizens, together with momentum for integrated services, joint commissioning, and choice for individuals, it is suggested that fundamental changes to the way care and support services are arranged may be needed, driven through a transformation of the way services are led, considered and arranged. Commissioning and market shaping are key levers for local authorities in designing and facilitating a healthy market of quality services.
2.1 Market shaping
Market shaping means the local authority collaborating closely with other relevant partners, including people with care and support needs, carers and families, to facilitate the whole market in its area for care, support and related services.
- services arranged and paid for by the state through the authority itself;
- those services paid by the state through direct payments;
- those services arranged and paid for by individuals from whatever sources (self-funders);
- 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, volumes and quality 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 to understand likely trends that reflect people’s needs and aspirations. It should be 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 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.
Commissioning is the local authority’s cyclical activity to assess the needs of its local population for care and support services, determining what element of this needs to be arranged by the authority, then designing, delivering, monitoring and evaluating those services to ensure appropriate outcomes. Commissioning has come to be 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).
Procurement is the specific functions carried out by the local authority to buy or acquire the services the local authority has a duty to arrange to meet people’s needs, to agreed standards to provide value for money to the public purse and deliver its commissioning strategy.
Contracting is the means by which that process is made legally binding. Contract management is the process that ensures that the services continue to be delivered to the agreed quality standards. Commissioning encompasses procurement but includes the wider set of strategic activities.
Market shaping, commissioning, procurement and contracting are inter-related activities and the themes of the Care and Support Statutory Guidance (2016) apply to each to a greater or lesser extent depending on the specific activity.
3. Principles of Market Shaping and Commissioning
3.1 Focusing on outcomes
The local authority must ensure the promotion of the wellbeing of individuals who need care and support, and the wellbeing of carers. The outcomes they require, are central to all care and support functions in relation to individuals, emphasising the importance of enabling people to stay independent for as long as possible. See Promoting Wellbeing and Preventing, Reducing and Delaying Needs.
The local authority will need to understand the outcomes which matter most to people in its area, and demonstrate that these outcomes are at the heart of its local strategies and approaches.
The local authority should consider the Adult Social Care Outcomes Framework (ASCOF) in addition to any locally collected information on outcomes and experiences, when framing outcomes for its locality and groups of people with care and support needs. The local authority should have regard to guidance from the Think Local Act Personal (TLAP) Partnership when framing outcomes for individuals, groups and their local population. In particular Making It Real which sets out what good personalised care and support should look like from the perspective of people with care and support needs, carers and family members.
Outcomes should be considered both in terms of outcomes for individuals and outcomes for groups of people and populations. Local authorities should consider the Care Quality Commission standards for quality and any emerging national frameworks for defining outcomes.
Local authorities should consider analysing and presenting local needs for services in terms of outcomes required. Local authorities should ensure that achieving better outcomes is central to its commissioning strategy and practices, and should be able to demonstrate that they are moving to contracting in a way that has an outcome basis at its heart. Local authorities should consider emerging best practice on outcomes based commissioning.
Outcomes based services are service arrangements that are defined on the basis of an agreed set of outcomes; either for an individual or a group of people. Moving more to an outcomes-based approach therefore means changing the way services are bought: from units of provision to meet a specified need (for example, hours of care provided) to what is required to ensure specified measurable outcomes for people are met.
The approach should emphasise:
- ways of reducing loneliness and social isolation;
- promotion of independence as ways of achieving and exceeding desired outcomes;
- choice in how people’s needs are met.
Moving to an outcomes based approach will need to recognise that some outcomes are challenging to assess and local authorities may wish to consider involving service providers when considering how service evaluations can be interpreted.
In encouraging outcomes based services, consideration should be given to how services are paid for. The local authority should consider incorporating elements of ‘payments by outcomes’ mechanisms, where practical, to emphasise and embed this commissioning approach which is based on specifying the outcomes to be achieved, rather than the service outputs to be delivered. Whilst payments by outcomes may be theoretically the most appropriate approach for outcomes based services, it is recognised that proxies for outcomes may be required to make the approach practical. For example, an outcome an authority may wish to measure might be someone’s personal outcome ‘I want to maintain a nutritious and balanced diet’, but a proxy measure that is observable, attributable and capable of being described, may be the person receiving help with meal preparation at agreed and specified times. Care logs documenting punctual assistance in meal preparation, in conjunction with positive feedback from the person receiving care about support received might be used as part of the basis of payment. It is also recognised that whilst these mechanisms are more commonplace in other types of commissioning, they are in their infancy for adult social care.
The design of any mechanism should, however, be introduced in cooperation with stakeholders and partners to ensure it is sustainable and ensure that innovation, and individual choice and control are not undermined. Any move to payments by outcomes should be achieved such that smaller, specialist, voluntary sector and community-based providers are not excluded from markets or disadvantaged, because for example, they do not have appropriate IT systems.
The local authority should keep under review emerging ideas and best practice about outcomes based commissioning and payments by outcomes. For example the New Economics Foundation (NEF).
Local authorities should have regard to the evolving guidance Commissioning for Better Outcomes that was co-produced by the (then) Department of Health, ADASS,LGA together with provider representatives and people with lived experience of care and support. This guidance is intended to support peer review and self-assessment of local authority commissioning, and represents a practical approach that underpins the themes of the Care and Support Statutory Guidance (2016).
The Care Act outlines local authorities’ role in preventing, reducing or delaying the need for care and support. This includes how the authority facilitates and commissions services and how it works with other local organisations to build community capital and make the most of the skills and resources already available in the area. Local authorities should consider working not just with traditional public sector partners like health, but also with a range of other partners to engage with communities to understand how to prevent problems from arising.
3.2 Promoting quality
The local authority must facilitate markets that offer a diverse range of high quality and appropriate services. In doing so, they must have regard to ensuring the continuous improvement of those services and encouraging a workforce which effectively underpins the market through:
The quality of services provided and the workforce providing them can have a significant effect on the wellbeing of people receiving care and support, and that of carers, and it is important to establish agreed understandable and clear criteria for quality and to ensure they are met (see also Promoting Wellbeing).
When considering the quality of services, the local authority should be mindful of:
Where appropriate, using the definitions that underpin the CQC’s Fundamental Standards of Care as a minimum, and having regard to the ASCOF framework of population outcomes.
High quality services should enable people who need care and support, and carers, to meet appropriate personal outcome measures, for example, a domiciliary care service which provides care two days a week so that a carer who normally provides care can go to work, is not a quality service if it is not available on the specified days, or the care workers do not arrive in time to allow the carer to get to work on time.
Local authorities should also consider other relevant national standards including those that are aspirational, for example, any developed by the National Institute of Health and Care Excellence (NICE).
It should encourage a wide range of service provision to ensure that people have a choice of appropriate services; appropriateness is a fundamental part of quality. Appropriate services will meet people’s needs and reasonable preferences.
When arranging services itself, the local authority must ensure its commissioning practices and the services delivered on its behalf comply with the requirements of the Equality Act 2010, and do not discriminate against people with protected characteristics; this should include monitoring delivery against the requirements of that Act. When shaping markets for services, it should work to ensure compliance with this Act for services provided in their area that it does not arrange or pay for. Local authorities should consider care and support services for their appropriateness for people from different communities, cultures and beliefs.
The local authority should encourage services that respond to the fluctuations and changes in people’s care and support needs, for example someone with fluctuating mobility or visual impairment. It should support the transition of services throughout the stages of people with care and support needs’ lives to ensure the services provided remain appropriate. This is particularly important, for example, for young people with care and support needs and young carers transitioning to adulthood (see Transition to Adult Care and Support).
The local authority should commission services having regard to the cost-effectiveness and value for money that the services offer for public funds. See the Local Government Association Adult Social Care Efficiency Programme.
People working in the care sector play a central role in providing high quality services. The local authority must consider how to help foster, enhance and appropriately incentivise this vital workforce to underpin effective, high quality services. In particular, it should consider how to encourage training and development for the workforce, including for the management of care services, though, for example, national standards recommended by Skills for Care:
- Care Quality Commission regulations;
- care certificate;
- manager induction standards;
- national occupational standards;
and have regard to funding available through grants to support the training of care workers in the independent sector.
The local authority should consider encouraging the training and development of care worker staff to at least the standard of the Care Certificate being developed by Skills for Care and Skills for Health.
When commissioning services, the local authority should assure itself and have evidence that service providers employ staff who are remunerated to a level that enables them to retain an effective workforce. Remuneration must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary. This will include appropriate remuneration for any time spent travelling between appointments. Guidance on these issues can be found at the HMRC website.
When commissioning services, the local authority should assure itself and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care. This should support and promote the wellbeing of people who receive care and support, and allow for the service provider ability to meet statutory obligations to pay at least the national minimum wage and provide effective training and development of staff and enable retention of staff. It should also allow retention of staff commensurate with delivering services to the agreed quality, and encourage innovation and improvement. Local authorities should have regard to guidance on minimum fee levels necessary to provide this assurance, taking account of the local economic environment. This assurance should understand that reasonable fee levels allow for a reasonable rate of return by independent providers that is sufficient to allow the overall pool of efficient providers to remain sustainable in the long term. The following tools may be helpful as examples of possible approaches:
- UKHCA Minimum Price for Homecare;
- Laing and Buisson toolkit to understand fair price for residential care.
The local authority should also ensure that it has functions and systems in place to fulfil its duties on market shaping and commissioning itself that are fit for purpose, with sufficient capacity and capability of trained and qualified staff to meet the requirements set out in the Care Act 2014 and the Care and Support Statutory Guidance 2016.
In particular, local authorities should encourage relevant staff to be trained or developed to meet the National Skills Academy standards and programmes of training for care and support Commissioners or equivalent, and appropriate standards for commissioning related services such as housing services where appropriate. Local authorities should consider the skills and capabilities needed to support new approaches to commissioning, for example, outcomes-based and integrated commissioning. Local authorities should have regard to the emerging skill levels and qualifications being developed for commissioning staff by Skills for Care.
3.3 Supporting sustainability
The local authority must work to develop markets for care and support that – whilst recognising that individual providers may exit the market from time to time – ensure the overall provision of services remains healthy in terms of the sufficiency of adequate provision of high quality care and support needed to meet expected needs. This will ensure there are a range of appropriate and high quality providers and services from which people can choose.
The local authority should understand the business environment of providers offering services in its area and seek to work with those facing challenges and understand their risks. Where needed, based on expected trends, the local authority should consider encouraging service providers to adjust the extent and types of service provision. This could include signalling to the market as a whole the likely need to extend or expand services, encourage new entrants to the market in the area, or if appropriate, signal likely decrease in needs – for example, drawing attention to a possible reduction in home care needs, and changes in demand resulting from increasing uptake of direct payments. The process of developing and articulating a Market Position Statement or equivalent should be central to this process.
The local authority should consider the impact of its own activities on the market as a whole, in particular the potential impact of its commissioning and re-commissioning decisions, how services are packaged or combined for tendering, and where they may also be a supplier of care and support. The local authority may be the most significant purchaser of care and support in an area, and therefore its approach to commissioning will have an impact beyond those services which it contracts. It must not undertake any actions which may threaten the sustainability of the local market as a whole, for example, by setting fee levels below an amount which is not sustainable for providers in the long term.
The local authority should have effective communications and relationships with providers in its area that should minimise risks of unexpected closures and failures. It should have effective interaction and communication with the Care Quality Commission (CQC) about the larger and most difficult to replace providers for which the CQC will provide financial oversight. It should review the intelligence it has about the sustainability of care providers drawn from market shaping, commissioning and contract management activities.
Where the authority believes there is a significant risk to a provider’s financial viability, and where they consider it would be in the best interests of service users, the authority should consider what assistance may be provided or brokered to help the provider return to viability, and consider what actions might be needed were that provider to fail. For example, where a local authority has arranged services for people with a provider that appears to be at risk, it should undertake early planning to identify potential replacement service capacity. Where it is apparent to a local authority that a provider is likely to imminently fail financially, either through its own intelligence or through information from the CQC, the authority should prepare to step in to ensure continuity of care and support for people who have their care and support provided by that provider.
3.4 Ensuring choice
The local authority must encourage a variety of different providers and different types of services. This is important in order to facilitate an effective open market, driving quality and cost-effectiveness so as to provide genuine choice to meet the range of needs and reasonable preferences of local people who need care and support services, including for people who choose to take direct payments, recognising, for example, the challenges presented in remote rural areas for low volume local services.
It must encourage a range of different types of service provider organisations to ensure people have a genuine choice of different types of service. This will include independent private providers, third sector, voluntary and community based organisations, including user-led organisations, mutual and small businesses. Local authorities should note that the involvement of people with specific lived experience of the type of needs being met, may lead to better outcomes for people who use services and carers as they directly empathise with service users. This should recognise that the different underpinning philosophies, cultural sensitivity and style of service of these organisations may be more suited to some people with care and support needs. The local authority should consider encouraging and supporting providers or taking other steps to promote an appropriate balance of provision between types of provider, having regard to competition rules and the need for fairness and legal requirements for all potential providers who may wish to compete for contracts.
When commissioning services to meet people’s eligible needs, where a local authority develops approved lists and frameworks that are used to limit the number of providers they work with, for example within a specific geographical area or for a particular service type to achieve strategic partnerships and value for money, the local authority must consider how to ensure that there is still a reasonable choice for people who need care and support.
It should encourage a genuine choice of service type, not only a selection of providers offering similar services, encouraging, for example, a variety of different living options such as shared lives, extra care housing, supported living, support provided at home, and live-in domiciliary care as alternatives to homes care, and low volume and specialist services for people with less common needs.
Choice for people who need care and support and carers should be interpreted widely. The local authority should encourage choice over the way services are delivered, for example:
- developing arrangements so that care can be shared between an unpaid carer or relative and a paid care worker;
- choice over when a service is delivered;
- choice over who is a person’s key care worker;
- arranging for providers to collaborate to ensure the right provision is available, for example, a private provider and a voluntary organisation working together;
- choice over when a service is delivered.
The local authority must have regard to ensuring a sufficiency of provision – in terms of both capacity and capability – to meet anticipated needs for all people in its area needing care and support – regardless of how they are funded. This will include regularly reviewing trends in needs including multiple and complex needs, outcomes sought and achieved, and trends in supply, anticipating the effects and trends in prevention and community-based assets, and through understanding and encouraging changes in the supply of services and providers’ business and investment decisions.
When considering the sufficiency and diversity of service provision, it should consider all types of service that are required to provide care and support for the local authority’s whole population, including for example:
- support services and universal and community services that promote prevention;
- domiciliary (home) care;
- homes and other types of accommodation care;
- nursing care;
- live-in care services;
- specialist care;
- support for carers;
- reablement services;
- sheltered accommodation and supported living;
- shared lives services;
- other housing options;
- community support;
- social work;
- information, brokerage, advocacy and advice services;
- direct payment support organisations.
This will include keeping up to date with innovations and developments in services, networking through for example, the Association of Directors of Adult Social Services (ADASS), Think Local Act Personal (TLAP) and the Local Government Association (LGA).
The local authority should facilitate the personalisation of care and support services, encouraging services (including small, local, specialised and personal assistant services that are highly tailored), to enable people to make meaningful choices and to take control of their support arrangements, regardless of service setting or how their personal budget is managed. Local authorities should have regard to the TLAP Partnership agreement that sets out how shaping markets to meet people’s needs and aspirations, including housing options, can promote choice and control. Alongside the suitability of living accommodation, the local authority should consider how it can encourage the development of accommodation options that can support choice and control and promote wellbeing. Personalised care and support services should be flexible so as to ensure people have choices over what they are supported with, when and how their support is provided and wherever possible, by whom. The mechanism of Individual Service Funds by service providers, which are applicable in many different service types, can help to secure these kinds of flexibilities for people and providers.
The local authority should help people who fund their own services or receive direct payments, to ‘micro-commission’ care and support services and / or to pool their budgets, and should ensure a supporting infrastructure is available to help with these activities. Many local authorities, for example, are utilising web based systems such as e-Marketplaces for people who are funding their own care or are receiving direct payments to be able to search for, consider and buy care and support services online, or consider joint purchases with others. This often involves offering information and advice about, for example, the costs and quality of services and information to support safeguarding (see also Information and Advice). This should include facilitating organisations that support people with direct payments and those whose care is funded independently from the local authority to become more informed and effective consumers and to overcome potential barriers such as help to recruit and employ personal assistants and to assist in overcoming problems and issues. This activity should help to match people’s wider needs with services.
Local authorities must facilitate information and advice to support people’s choices for care and support. This should include where appropriate through services to help people with care and support needs understand and access the systems and processes involved and to make effective choices. This is a key aspect of the duty to establish and maintain a universal information and advice service locally. Information and advice services should be reviewed for effectiveness using people’s experiences and feedback. This feedback forms part of the overall information a local authority considers about people’s needs and aspirations.
The local authority should facilitate local markets to encourage a sufficiency of preventative, enablement and support services, including support for carers to make caring more sustainable, such as interpreters, signers and communicator guides, and other support services such as telecare, home maintenance and gardening that may assist people achieve more independence and supports the outcomes they want.
The local authority should encourage flexible services to be developed and made available that support people who need care and support, and carers who need support, to take part in work, education or training. Services should be encouraged that allow carers who live in one local authority area but care for someone in another local authority area to access services easily, bearing in mind guidance on ordinary residence.
3.5 Co-production with stakeholders
Local authorities should pursue the principle that market shaping and commissioning should be shared endeavours, with commissioners working alongside people with care and support needs, carers, family members, care providers, representatives of care workers, relevant voluntary, user and other support organisations and the public to find shared and agreed solutions (see also the TLAP guidance on co-production).
3.6 Developing local strategies
Commissioning and market shaping should be fundamental means for local authorities to facilitate effective services in their area and it is important that authorities develop evidence-based local strategies for how they exercise these functions, and align these with wider corporate planning. It should publish strategies that include plans that show how its legislative duties, corporate plans, analysis of local needs and requirements (integrated with the Joint Strategic Needs Assessment and Joint Health and Wellbeing Strategy), thorough engagement with people, carers and families, market and supply analysis, market structuring and interventions, resource allocations and procurement and contract management activities translate (now and in future) into appropriate high quality services that deliver identified outcomes for the people in their area and address any identified gaps.
Market shaping and commissioning intentions should be cross-referenced to the JSNA, and should be informed by an understanding of the needs and aspirations of the population and how services will adapt to meet them. Strategies should be informed and emphasise preventative services that encourage independence and wellbeing, delaying or preventing the need for acute interventions (see also Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies).
Market shaping and commissioning should become an integral part of understanding and delivering the whole health and care economy, and reflect the range and diversity of communities and people with specific needs, in particular:
- people needing care and support themselves (through for example, consumer research);
- carer support organisations;
- health professionals;
- care and support managers and social workers (and representative organisations for these groups);
- relevant voluntary, user and other support organisations;
- independent advocates;
- wider citizens;
- provider organisations (including where appropriate housing providers); and
- other tiers of local government.
A co-produced approach will stress the value of meaningful engagement with people at all stages, through design, delivery and evaluation, rather than simply as ‘feedback’. The local authority should publish and make available its local strategies for market shaping and commissioning, giving an indication of timescales, milestones and frequency of activities, to support local accountability and engagement with the provider market and the public.
The local authority can best start implementing its statutory responsibilities in relation to market shaping and commissioning and provider failure by developing with providers and stakeholders a published Market Position Statement. It may be helpful for Market Position Statements from neighbouring local authority areas to be coordinated to ensure a degree of consistency for people who will use the documents; this is particularly true for urban areas.
The local authority should review strategies related to care and support together with stakeholders to ensure they remain fit for purpose, learn lessons, and adapt to incorporate emerging best practice, noting that peer review has a strong track record in driving improvement. It is suggested that reporting against strategies for care and support should form part of the local authority’s Local Account.
Many public sector bodies, including local authorities, have radically transformed services by reconsidering commissioning in a strategic context. The Government’s Commissioning Academy is working to promote such transformational approaches and local authorities should have regard to the emerging best practice it is producing.
Developing a diverse market in care and support services can boost employment and create opportunities for local economic growth, through for example, increasing employment opportunities for working age people receiving care and carers, and developing the capacity of the care workforce. Local authorities should consider how their strategies related to care and support can be embedded in wider local growth strategies, for example, engaging care providers in local enterprise partnerships.
The local authority should have regard to best practice on efficiency and value for money, see also the Local Government Association Adult Social Care Efficiency Programme, 2014.
The local authority strategies should adhere to general standards, relevant laws and guidance, including the Committee of Standards in Public Life principles of accountability, regularity and ensuring value for money alongside quality, and the HM Treasury guidance on Managing Public Money, 2013.
The local authority should develop standards on transparency and accountability to ensure citizens are able to contribute to and understand policy and review delivery. Standards should be in line with the codes of practice drawn up by the Department of Communities and Local Government.
Local authorities should take the lead to engage with a wide range of stakeholders and citizens in order to develop effective approaches to care and support, including through developing the JSNA and a Market Position Statement. While the duties under the Care Act fall upon local authorities, successful market shaping is a shared endeavour that requires a range of coordinated action by commissioners and providers, working together with the citizen at the centre. Local authorities should engage and cooperate with stakeholders to reflect the range and diversity of communities and people with specific needs, for example:
- people needing care and support themselves and their representative organisations;
- carers and their representative organisations;
- health professionals;
- social care managers and social workers;
- independent advocates;
- support organisations that help people who need care consider choices (including financial options);
- provider organisations (including where appropriate housing providers and registered social landlords);
- wider citizens and communities including individuals and groups who are less frequently heard (for example, LGBT communities where there may be a lack of data on care and support needs and preferences) or at risk from exclusion, including those who have communication issues and involving representatives of those who lack mental capacity.
Engagement with people needing care and support, people likely to need care and support, carers, independent advocates, families and friends, should emphasise understanding the needs of individuals and specific communities, what aspirations people have, what outcomes they would like to achieve, their views on existing services and how they would like services to be delivered in the future. It should also seek to identify the types of support and resources or facilities available in the local community which may be relevant for meeting care and support needs, to help understand and build community capacity to reinforce the more formal, regulated provider market. In determining an approach to engagement, local authorities should consider methods that enable people to contribute meaningfully to:
- setting the strategic direction for market shaping and commissioning;
- engaging in planning – using methods that support people to identify problems and solutions, rather than relying on ‘downstream’ consultation;
- identifying outcomes and set priorities for specific services;
- setting measures of success and monitor ongoing service delivery, including through the experience of people who use services and carers;
- playing a leading role throughout tendering and procurement processes, from developing specifications to evaluating bids and selecting preferred providers;
- contributing to reviews of services and strategies that relate to decommissioning decisions and areas for new investment;
- managing any changes to service delivery, recognising that long-term relationships may have developed in the community and with individual people receiving care and support and carers.
Engagement with service providers should emphasise understanding the organisation’s strategies, risks, plans, and encourage building trusting relationships and fostering improvement and innovation to better meet the needs of people in the area. The local authority should consider engagement with significant suppliers of services to provider organisations, where this would help improve its understanding of markets, for example, engaging with employment and training services that might enable local authorities to gain access to frontline insights on care provision and the local workforce supply and training.
The local authority should ensure that active engagement and consultation with local people is built into the development and review of their strategies for market shaping and commissioning, and is demonstrated to support local accountability (for example, via the Local Account).
It should engage positively with provider organisations to ensure fair play and necessary confidentiality. See Commissioning the Future: start a new conversation.
The local authority should make available to providers available routes to register concerns or complaints about engagement and commissioning activities. Local authorities should consider the adequacy and effectiveness of these routes and processes as part of their engagement and trust building activities.
4. Undertaking Market Shaping and Commissioning
4.1 Understanding the market
The local authority must understand local markets and develop knowledge of current and future needs for care and support services, and, insofar as they are willing to share and discuss, understand providers’ business models and plans. This is important so that the authority can articulate likely trends in needs and signal to the market the likely future demand for different types of services for its market as a whole, and understand the local business environment, to support effective commissioning. Activities to understand the market should appropriately reflect an authority’s strategic plans for integrating health, social care and related services and will require the cooperation of those other parties, as well as other authorities in the region, to ensure a complete picture.
The local authority (through an engagement process, in concert with commissioners for other services where appropriate) should understand and articulate the characteristics of current and future needs for services. This should include reference to underpinning demographics, drivers and trends, the aspirations, priorities and preferences of those who will need care and support, their families and carers, and the changing care and support needs of people as they progress through their lives. This should include an understanding of:
- people with existing care needs drawn from assessment records;
- carers with existing care needs drawn from carers’ assessment records;
- new care and support needs;
- those whose care and support needs will transition from young people’s services to adult services;
- those transitioning from working-age adults to services for older people;
- people whose care and support needs may fluctuate;
- people moving to higher needs and specialised care and support; and
- those that will no longer need care and support.
It should include information and analysis of low incidence needs and multiple and complex conditions, as well as more common conditions such as sensory loss. It should also include information about likely changes in requirements for specialist housing required by people with care and support needs. See also the online tool shop@, Housing Learning and Improvement Network.
The local authority should have in place robust methods to collect, analyse and extrapolate this information about care and support needs, including as appropriate information about specific conditions (for example, neurological conditions such as Stroke, Parkinson’s, Motor Neurone Disease), and multiple and complex needs. This should sit alongside information about providers’ intentions to deliver support over an appropriate timescale – likely to be at least five years hence, with alignment to other strategic time frames. Data collection should include information on the quality of services provided in order to support local authority duties to foster continuous improvement. This could be achieved, for example, by collecting and acting on feedback from people who receive care, their families and carers alongside information on the specific nature of the services people receive (e.g. regularity and length of homecare visits). This will allow for an assessment of correlation between customer experience and service provision. Data collection must be sufficient to allow local authorities to meet their duties under the Equality Act 2010.
The local authority should include in its engagement and analysis services and support provided by voluntary, community services, supported housing providers, and other groups that make up ‘community assets’ and plan strategically to encourage, make best use of and grow these essential activities to integrate them with formal care and support services.
The local authority should also seek to understand trends and changes to the levels of support that are provided by carers, and seek to develop support to meet its needs, noting that amongst other sources, census data include information on carers and their economic activity. It should understand the trends and likely changes to the needs of carers in employment, so as to better plan future support.
In order to understand future trends in needs and demands, the local authority should include an understanding of people who are or are likely to be both wholly or partly state funded, and people who are or are likely to be self-funding. It should also include an analysis of those self-funders who are likely to move to state funding in the future.
The understanding of needs should also include an understanding of the likely demand for state funded services that the local authority will need to commission directly, and state funded services likely to be provided through direct payments and require individuals to ‘micro-commission’ services. The local authority should also consider the extent to which people receiving services funded by the state may wish to ‘top up’ their provision to receive extra services or premium services; that is, the assessment of likely demand should be for services that people are likely to need and be prepared to pay for through top ups.
The assessment of needs should be integrated with the process of developing, refining and articulating a local authority’s Joint Strategic Needs Assessment. Where appropriate, needs should be articulated on an outcomes basis.
In order to gather the necessary information to shape its market, the local authority should engage with providers (including the local authority itself if it directly provides services) to seek to understand and model current and future levels of service provision supply, the potential for change in supply, and opportunities for change in the types of services provided and innovation possible to deliver better quality services and greater value for money. It should understand the characteristics of providers’ businesses, their business models, market concentration, investment plans etc. Information about both supply and expected demand for services should be made available publicly to help facilitate the market and empower communities and citizens when considering care and support. Smaller care providers should be included in engagement. Local authorities may find helpful the guidance Market Shaping Tool: Supporting Local Authority and SME Care Provider Innovation and Collaboration that was co-produced by the (then) Department of Health with ADASS and LGA, provider organisations and people with lived experience.
Assessment of supply and potential demand should include an awareness and understanding of current and future service provision and potential demand from outside the local authority area where this is appropriate, for example in considering services to meet highly specialised and complex needs, care and support may not be available in the local authority area, but only from a small number of specialised providers in the country. Consideration should be given to whether such services might better be commissioned and facilitated regionally.
4.2 Facilitating the development of the market
The local authority should collaborate with stakeholders and providers to bring together information about needs and demands for care and support with that about future supply, to understand for their whole market the implications for service delivery. This will include understanding and signalling to the market as a whole the need for the market to change to meet expected trends in needs, adapt to enhance diversity, choice, stability and sustainability, and consider geographic challenges for particular areas. To this picture, the local authority should add their own commissioning strategy and future likely resourcing for people receiving state funding. The local authority should consider coordinating these market shaping and related activities with other neighbouring authorities where this would provide better outcomes.
The local authority should consider how to support and empower effective purchasing decisions by people who self-fund care or purchase services through direct payments, recognising that this can help deliver a more effective and responsive local market.
It should ensure that the market has sufficient signals, intelligence and understanding to react effectively and meet demand, a process often referred to as market structuring or signalling. The local authority should publish, be transparent and engage with providers and stakeholders about the needs and supply analysis to assist this signalling. It is suggested that this is best achieved through the production and regular updating of a document like a Market Position Statement that clearly provides evidence and analysis and states the local authority’s intent. A Market Position Statement is intended to encourage a continuing dialogue between a local authority, stakeholders and providers, where that dialogue results in an enhanced understanding by all parties is an important element of signalling to the market.
A Market Position Statement should contain information on: the local authority’s direction of travel and policy intent, key information and statistics on needs, demand and trends, (including for specialised services, personalisation, integration, housing, community services, information services and advocacy, and carers’ services), information from consumer research and other sources about people’s needs and wants, information to put the authority’s needs in a national context, an indication of current and future authority resourcing and financial forecasts, a summary of supply and demand, the authority’s ambitions for quality improvements and new types of services and innovations, and details or cross-references to the local authority’s own commissioning intentions, strategies and practices.
Developing and publishing a Market Position Statement is one way a local authority can meet its duties to make available information about the local market, and demonstrate activity to meet other parts of the Care Act 2014. Market Position Statements for care and support services should combine, cross refer or otherwise complement other similar statements for related services, particularly where there is an integrated approach or ambition, for example, housing.
As part of developing and publishing a document like a Market Position Statement, the local authority should engage with stakeholders and partners to structure their markets. This could include:
- discussions with potential providers;
- actively promoting best practice and models of care and support;
- understanding the business planning cycles of providers;
- aligning interactions and supporting the provider’s business planning;
- identifying and addressing barriers to market entry for new providers;
- facilitating entry to the market through advice and information;
- streamlining the authority’s own procurement processes;
- promoting diversification of provider organisations;
- working with providers on an ‘open-book accounting’ approach to cost current and future services and ensure provider sustainability;
- supporting providers through wider local authority activity – planning, business support and regeneration.
The local authority may consider that market structuring activity – signalling to the market and providing assistance – is not achieving the strategic aims as quickly or as effectively as needed, and may wish to consider more direct interventions in the market. Market interventions may also be planned as part of the market shaping and commissioning strategies where there is an immediate need for intervention.
Market interventions could for example include: refocusing local authority business support initiatives onto the care and support sector, exploring how local care and support projects could attract capital investments and support and what guarantees may be needed, encouraging and supporting social enterprises, micro-enterprises, Community Interest Companies, and User Led Organisations (for example, incentivising innovation by third sector providers, possibly through grant funding), exploring planning barriers and using planning law, offering access to training and development opportunities.
The local authority should consider monitoring progress toward the ambitions set out in the Market Position Statement, and making the progress public along with information about its own commissioning decisions, as part of a commitment to transparency and accountability. This would demonstrate that the authority’s commissioning activity is in line with the ambition and direction of travel articulated in its Market Position Statement, and might be achieved by including this information in regular updates to the Market Position Statement.
4.3 Promoting integration with local partners
The Health and Social Care Act 2012 sets out specific obligations for the health system and its relationship with care and support services. It gives a duty to NHS England, clinical commissioning groups, Monitor and Health and Wellbeing Boards to make it easier for health and social care services to work together to improve outcomes for people. The local authority has a corresponding duty to carry out their care and support functions with the aim of integrating services with those provided by the NHS or other health-related services, such as housing.
It should also consider working with appropriate partners to develop integration with services related to care and support such as housing, employment services, transport, benefits and leisure services. Local authorities should prioritise integration activity in areas where there is evidence that effective integration of services materially improves people’s wellbeing, for example, end of life care (see End of Life Care), and should take account of the key national and local priorities and objectives of the Better Care Fund, for example, stopping people reaching crisis and reducing the emergency admissions to hospitals.
Integrated services built around an individual’s needs are often best delivered in the home. The suitability of living accommodation is a core component of an individual’s wellbeing and when developing integrated services, the local authority should consider the central role of housing within integration, with associated formal arrangements with housing and other partner organisations.
The local authority should work towards providing integrated care and support, providing services that work together to provide better outcomes for individuals who need care and support and enhancing their wellbeing, noting that this will require the sharing of information about current and future needs and likely service provider’s responses to underpin a holistic approach to developing integrated care and support pathways. See also Integration, Cooperation and Partnerships and the toolkit for integration developed by North West London Whole System Integrated Care (particularly Chapter 7 on budget pooling, governance arrangements and commissioning issues in general).
The local authority should consider with partners the enabling activities, functions and processes that may facilitate effective integrated services. These will include consideration of: joint commissioning strategies, joint funding, pooled budgets, lead commissioning, collaborative commissioning, working with potential service providers to consider innovative ways of arranging and delivering services, and making connections to public health improvement.
4.4 Securing supply in the market and assuring its quality and value for money through contracting
Local authorities should consider best practice on commissioning services, for example the National Audit Office guidance Value for Money to ensure they deliver quality services with value for money. This means optimal use of resources to achieve intended outcomes, and must reference the quality of service delivered and the outcomes achieved for people’s wellbeing, and should not be solely based on achieving the lowest cost. Achieving value for money may mean arranging service provision collaboratively with other authorities, in order to secure viable, quality services that meet the demands identified, for example, low volume services.
Commissioning and procurement practices must deliver services that meet the requirements of the Care Act and all related statutory guidance. Re-commissioning and replacing services represents a particular challenge and should be carried out so as to maintain quality and service delivery that supports the wellbeing of people who need care and support and carers, and guards against the risk of a discontinuity of care and support for those receiving services. For example, multiple contracts terminating around the same time may destabilise local markets if established providers lose significant business rapidly and staff do not transfer smoothly to new providers.
Decommissioning services where there is to be no replacement service should similarly be carried out so as to maintain the wellbeing of people who need care and support, and carers, and ensures that their eligible needs continue to be met.
The local authority should consider the contract arrangements they make with providers to deliver services, including the range of block contracts, framework agreements, spot contracting or ‘any qualified provider’ approaches, to ensure that the approaches chosen do not have negative impacts on the sustainability, sufficiency, quality, diversity and value for money of the market as a whole – the pool of providers able to deliver services of appropriate quality.
A local authority’s own commissioning should be delivered through a professional and effective procurement, tendering and contract management, monitoring, evaluation and decommissioning process that must be focused on providing appropriate high quality services to individuals to support their wellbeing and supporting the strategies for market shaping and commissioning, including all the themes set out in this guidance.
The local authority should ensure that it understands relevant procurement legislation, and that its procurement arrangements are consistent with such legislation and best practice. It should be aware there is significant flexibility in procurement practices to support effective engagement with provider organisations and support innovation in service delivery, potentially reducing risks and leading to cost-savings. The Government has produced guidance on when reserved contracts may be allowable for organisations employing a significant number of disabled people.
The local authority should ensure that its procurement and contract management and monitoring systems provide direct and effective links to care service managers and social workers to ensure the outcomes of service delivery matches the individual’s care and support needs, and that where the local authority arranges services, people are given a reasonable choice of provider. Contract management should take account of feedback from people receiving care and support.
The local authority should ensure that where they arrange services, the assessed needs of a person with eligible care and support needs is translated into effective, appropriate commissioned services that are adequately resourced and meet the wellbeing principle (see Promoting Wellbeing). For example, short home-care visits of 15 minutes or less are not appropriate for people who need support with intimate care needs, though such visits may be appropriate for checking someone has returned home safely from visiting a day centre, or whether medication has been taken (but not the administration of medicine) or where they are requested as a matter of personal choice.
4.6 Preventing abuse and neglect
When commissioning services, the local authority should pay particular attention to ensuring that providers have clear arrangements in place to prevent abuse or neglect. This should include assuring itself, through its contracting arrangements, that a provider is capable and competent in responding to allegations of abuse or neglect, including having robust processes in place to investigate the actions of members of staff. The local authority should be clear what information they expect from providers (for example, where there are allegations of abuse, what action the provider is taking or has taken and what the outcome is) and where providers are expected to call upon local authorities to lead a section 42 enquiry (where the management of the provider is implicated for instance), or to involve the clinical commissioning group (for health matters) or police (for example, in the case of potential crimes). There should be clear agreement about how local partners work together on investigations and their respective roles and responsibilities.
4.7 Financial sustainability
When commissioning services, the local authority should undertake due diligence about the financial sustainability and effectiveness of potential providers to deliver services to agreed criteria for quality, and should assure themselves that any recent breaches of regulatory standards or relevant legislation by a potential provider have been corrected before considering them during tendering processes. For example, where a provider has previously been in breach of national minimum wage legislation, a local authority should consider every legal means of excluding them from the tendering process unless they have evidence that the provider’s policies and practice have changed to ensure permanent compliance.
Contracts should incentivise value for money, sustainability, innovation and continuous improvement in quality and actively reward improvement and added social value. Contracts and contract management should manage and eliminate poor performance and quality by providers and recognise and reward excellence.
The local authority has a duty to consider added social value when letting contracts through the Public Services (Social Value) Act 2012, and are required to consider how the services it procures, above relevant financial thresholds, might improve the economic, social and environmental wellbeing of the area. The local authority should consider using this duty to promote added value in care and support both when letting contracts to deliver care and support, and for wider goods and services. This should include considering whether integrated services, voluntary and community services and ‘community capital’ could be enhanced, recognising that these community assets provide the bedrock of care and support that commissioned and bought services supplement. Local authorities should consider the range of funding mechanisms that are available to support market interventions to support community based organisations such as seed funding and grants.
All services delivered should adhere to national quality standards, with procedures in place to assure quality, safeguarding, consider complaints and commendations, and continuing value for money, referencing the Care Quality Commission (CQC) standards for quality and its quality ratings.
The local authority may consider delegating some forms of contracting to brokers and people who use care and support to support personal choice for people who are not funded by the local authority and those taking direct payments, with appropriate systems in place to underpin the delivery of safe, effective appropriate high quality services through such routes. Where functions and activities are delegated, local authorities should ensure that appropriate elements of this statutory guidance are included in contractual conditions, for example, allowing engagement in developing Market Position Statements. Local authorities should also consider providing support to people who wish to use direct payments to help them make effective decisions through, for example, direct payment support organisations.
Local authority procurement and contract management activities should seek to minimise burdens on provider organisations and reduce duplications, where appropriate, using and sharing information, with for example the CQC.
Recognising that procurement is taking place against a backdrop of significant demand on commissioners to achieve improved value for money and make efficiencies, local authorities should consider emerging practice on achieving efficiencies without undermining the quality of care.