The decision has been made to increase community activity service fees for 2023/24 are increased as detailed in table 1 within the main report, and will take effect from Monday 3rd April 2023.

In line with contractual obligations, the council must review the fees paid to Social Care providers on an annual basis. The portfolio areas included in this review are Care Homes, Home Care, Supported Living, Community Shared Lives and Direct Payments.

The proposed recommendations in relation to community activities will ensure that the council is able to fulfil its role in shaping and supporting the market place, as identified under the Care Act 2014, to support the wider care market in delivering a range of sustainable, high quality services to meet the demands of the community now and in the future.

It is critical that the provider markets in Herefordshire are stable, able to maintain continuity and quality provision, to ensure eligible needs can be met. This year, providers have faced increased cost of living expenses and operating costs.

It is important to note that this decision also informed by a number of key challenges which community activity providers are currently experiencing, including:

Fees have remained unchanged from 2021/22 because there was no uplift agreed for 2022/23. This has meant no additional income through 2022/23 despite rising costs for providers including:

• Staff recruitment and retention
• National Living Wage rates (NLW) increase for 2023/24 – 9.7%
• General Inflation - CPI is currently 10.1% - predicted to fall during 2023/24
• Additional costs associated with infection control
• Increasing utility costs
• Increasing property/mortgage charges

This has meant increased risk of service closures which has result in an urgent need for mitigation in the immediate term to enable market stability during 2023/24.

This will enable longer term work to transform commissioned services to be undertaken with new service / pricing models to enable a sustainable and viable market, increased opportunities and improved outcomes for participants.