On 16th December 2021 the Department of Health and Social Care issued grant conditions for the Market Sustainability and Fair Cost of Care Fund.

Funding conditions
The grant conditions are:

“The 2022 to 2023 funding is designed to ensure local authorities can prepare their markets for reform (particularly the impact of section 18(3)) and move towards paying providers a fair cost of care, as appropriate to local circumstances. To prepare markets, we expect local authorities will carry out activities such as:
1. conduct a cost of care exercise to determine the sustainable rates and identify how close they are to it;
2. engage with local providers to improve data on operational costs and number of self-funders to better understand the impact of reform on the local market (particularly the 65+ residential care market, but also additional pressures to domiciliary care);
3. strengthen capacity to plan for, and execute, greater market oversight (as a result of increased section 18(3) commissioning) and improved market management to ensure markets are well positioned to deliver on our reform ambitions;
4. use this additional funding to genuinely increase fee rates, as appropriate to local circumstances.

As a condition of receiving further grant funding in the 2 following years, local authorities will need to submit to the Department of Health and Social Care (DHSC):
1. a cost of care exercise – produced by surveying local providers for 65+ residential and nursing care and 18+ homecare to determine a sustainable fee rate for different care settings. Local authorities will be expected to publish the exercises;
2. a provisional market sustainability plan setting out local strategy for the next 3 years (2022 to 2025);
3. spend report – this will detail how money has been allocated in line with our expectations in order to achieve a more sustainable local market (as set out in 1 to 4 above)”

Funding distribution
The government distributed 2022 to 2023 funding using the adult social care relative needs formula as is used for the Social Care Grant and improved Better Care Fund

Herefordshire Council’s allocation is £594,414.

The guidance states that local authorities are required to use all funding to improve sustainability of the 65+ care home and 18+ domiciliary care markets (including domiciliary care providers who operate in extra care settings), and not just cover existing pressures.

Local authorities are expected to use at least 75% of allocated funding in 2022 to 2023 to increase fee rates paid to providers in scope, where necessary, and beyond pressures funded by the Local Government Finance Settlement 2022 to 2023.

As an incentive for providers to complete and take part in the cost of care exercise a £500 payment was made for a completed return. Therefore, £20,000 has already been paid to eligible providers. Decision - Fair Cost of Care Review (herefordshire.gov.uk)

The remaining allocation of £574,414 will be divided between Home Care and Care Home providers on the basis of each sector’s weighted average share of the council’s spending on spot-purchased Adult Social Care.

The funding will be apportioned to each eligible provider on the basis of:
• Home Care- commissioned hours of home care per provider
• Care Homes- commissioned care home bed days per provider