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Market Sustainability and Fair Cost of Care Fund 鈥� Grant Determination and Conditions 2022 to 2023: No 31/6094

The Minister of State for Levelling Up Communities (鈥渢he Minister of State鈥�), in exercise of the powers conferred by section 31 of the Local Government Act 2003, makes the following determination:聽

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1. This determination may be cited as the Market Sustainability and Fair Cost of Care Fund Grant Determination 2022 to 2023 [31/6094].

Purpose of the grant聽

2. The purpose of this grant is to support local authorities to prepare their markets for reform of the adult social care system, including the further commencement of Section 18(3) of the Care Act 2014 in October 2023, and to support local authorities to move towards paying providers a fair cost of care.

3. Where average fee rates are below the fair cost of care, local authorities should use this additional funding to increase fee rates paid to providers (in respect of residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over, including those who operate in extra care settings) beyond the level required to cover increases in core costs such as inflation, workforce pressures, National Living Wage, and National Insurance. A proportion of the funding, set out in Annex B, may be spent on implementation activities associated with preparing care markets for reform.

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4. The Minister of State determines as the authorities to which grant is to be paid and the amount of grant to be paid, the authorities and amounts which are set out in Annex A.

5. The grant will be paid in monthly instalments.

Grant conditions聽聽

6. Pursuant to section 31(4) of the Local Government Act 2003, the Minister of State determines that grants from the Market Sustainability and Fair Cost of Care Fund for 2022 to 2023 will be paid subject to local authorities meeting the conditions specified in Annex聽B.

7. None of the funding provided is to be used for any purpose other than that specified above.

Treasury consent聽

8. Before making this determination in relation to local authorities in England, the Minister of State obtained the consent of the Treasury.

Signed by authority of the Minister of State for Levelling Up Communities.聽聽

Deputy Director,聽Department for Levelling Up, Housing and Communities聽聽聽

Annex A: Market Sustainability and Fair Cost of Care Fund allocations to local authorities 2022 to 2023

Local authority	Market Sustainability and Fair Cost of Care Fund allocation 2022 to 2023
Barking and Dagenham	拢616,316
Barnet	拢977,055
Barnsley	拢835,921
Bath and North East Somerset	拢492,583
Bedford	拢419,048
Bexley	拢626,653
Birmingham	拢3,780,199
Blackburn with Darwen	拢515,981
Blackpool	拢609,987
Bolton	拢938,319
Bournemouth, Christchurch and Poole	拢1,181,178
Bracknell Forest	拢244,239
Bradford	拢1,550,616
Brent	拢906,550
Brighton and Hove	拢829,346
Bristol	拢1,369,147
Bromley	拢803,557
Buckinghamshire Council	拢1,128,140
Bury	拢551,280
Calderdale	拢621,416
Cambridgeshire	拢1,568,738
Camden	拢867,889
Central Bedfordshire	拢584,531
Cheshire East	拢979,180
Cheshire West and Chester	拢990,373
City of London	拢32,934
Cornwall	拢1,885,534
Coventry	拢1,046,967
Croydon	拢945,904
Cumbria	拢1,692,375
Darlington	拢338,291
Derby	拢775,284
Derbyshire	拢2,448,432
Devon	拢2,413,484
Doncaster	拢1,019,169
Dorset Council	拢1,152,060
Dudley	拢1,054,094
Durham	拢1,905,104
Ealing	拢956,859
East Riding of Yorkshire	拢976,029
East Sussex	拢1,745,314
Enfield	拢876,579
Essex	拢3,995,659
Gateshead	拢764,967
Gloucestershire	拢1,707,739
Greenwich	拢897,937
Hackney	拢948,377
Halton	拢431,414
Hammersmith and Fulham	拢619,907
Hampshire	拢3,209,285
Haringey	拢775,037
Harrow	拢654,634
Hartlepool	拢338,258
Havering	拢678,836
Herefordshire	拢594,414
Hertfordshire	拢2,790,730
Hillingdon	拢702,748
Hounslow	拢674,556
Isle of Wight	拢517,330
Isles of Scilly	拢8,546
Islington	拢867,975
Kensington and Chelsea	拢585,094
Kent	拢4,160,993
Kingston upon Hull	拢980,737
Kingston upon Thames	拢386,896
Kirklees	拢1,255,420
Knowsley	拢659,513
Lambeth	拢1,018,518
Lancashire	拢3,724,752
Leeds	拢2,234,742
Leicester	拢1,062,273
Leicestershire	拢1,629,617
Lewisham	拢923,320
Lincolnshire	拢2,273,366
Liverpool	拢1,996,048
Luton	拢531,984
Manchester	拢1,799,584
Medway	拢673,563
Merton	拢504,839
Middlesbrough	拢511,608
Milton Keynes	拢612,953
Newcastle upon Tyne	拢1,013,061
Newham	拢991,179
Norfolk	拢2,820,608
North East Lincolnshire	拢526,304
North Lincolnshire	拢513,620
North Northamptonshire	拢851,913
North Somerset	拢623,663
North Tyneside	拢695,977
North Yorkshire	拢1,635,931
Northumberland	拢1,026,980
Nottingham	拢1,046,269
Nottinghamshire	拢2,380,772
Oldham	拢757,589
Oxfordshire	拢1,546,799
Peterborough	拢535,721
Plymouth	拢866,771
Portsmouth	拢601,032
Reading	拢384,414
Redbridge	拢753,284
Redcar and Cleveland	拢486,152
Richmond upon Thames	拢446,068
Rochdale	拢748,142
Rotherham	拢908,069
Rutland	拢91,611
Salford	拢889,426
Sandwell	拢1,247,351
Sefton	拢1,029,298
Sheffield	拢1,826,053
Shropshire	拢940,831
Slough	拢347,931
Solihull	拢587,490
Somerset	拢1,685,858
South Gloucestershire	拢631,156
South Tyneside	拢617,801
Southampton	拢748,836
Southend-on-Sea	拢556,200
Southwark	拢1,060,187
St. Helens	拢649,928
Staffordshire	拢2,390,826
Stockport	拢866,170
Stockton-on-Tees	拢570,536
Stoke-on-Trent	拢899,030
Suffolk	拢2,201,444
Sunderland	拢1,058,250
Surrey	拢2,696,380
Sutton	拢497,666
Swindon	拢519,247
Tameside	拢778,974
Telford and Wrekin	拢522,646
Thurrock	拢441,588
Torbay	拢559,291
Tower Hamlets	拢988,851
Trafford	拢638,351
Wakefield	拢1,112,991
Walsall	拢966,482
Waltham Forest	拢734,867
Wandsworth	拢875,783
Warrington	拢556,023
Warwickshire	拢1,508,344
West Berkshire	拢338,106
West Northamptonshire	拢982,135
West Sussex	拢2,229,830
Westminster	拢893,132
Wigan	拢1,074,750
Wiltshire	拢1,230,568
Windsor and Maidenhead	拢321,609
Wirral	拢1,215,250
Wokingham	拢271,073
Wolverhampton	拢929,122
Worcestershire	拢1,609,622
York	拢493,965
Total	拢162,000,000

Note: funding is being paid to local authorities with responsibility for adult social care only.

Annex B: grant conditions聽

In this determination:聽

• 鈥渁 recipient authority鈥� means a local authority listed in Annex A of this determination
• 鈥渢he Minister of State鈥� means the Minister of State for Levelling Up Communities
• 鈥済rant鈥� means the amounts set out in Annex A for each authority
• 鈥渃ost of care exercise鈥� means a process of engagement between local authorities, commissioners and providers, data collection and analysis by means of which local authorities and care providers can arrive at a shared understanding of the local costs of providing care. The cost of care exercise will help local authorities identify the lower quartile, median and upper quartile costs in the local area for a series of care categories
• 鈥渃ost of care鈥� means the actual cost/s a provider incurs in delivering care at the point in time that the exercise is undertaken. It is typically presented as a unit cost for an hour of domiciliary care or a bed per week in a care home
• 鈥渞ate鈥� means the rate, determined and paid by a local authority to providers for care and support services
• 鈥渇air cost of care鈥� means, for the reporting purposes for this fund, and in terms of understanding the cost of care, the median actual operating costs for providing care in the local area (following completion of a cost of care exercise) for a series of care categories. This must include and evidence values for return on capital and return on operations. Together, this is what is described as the 鈥渇air cost of care鈥� and is, on average, what local authorities are required to move towards paying providers
• 鈥淢arket Sustainability Plan鈥� means a written assessment of the current rates the local authority pays for care, the impact this is having on the market and the potential future risks in the local market, particularly in the context of adult social care reform and the further commencement of Section 18(3) of the Care Act 2014. This plan will also need to outline mitigating actions for managing these risks and developing a more sustainable market

Use of the grant聽

1. Up to 25% of the funding in 2022 to 23 may be spent on implementation activities associated with preparing markets for reform, including:

a. Strengthening internal commissioning and contract management capacity or procuring external resource to undertake the work associated with these grant conditions, and to respond to the need for greater market oversight as a result of increased section 18(3) of the Care Act 2014 commissioning (this does not include the cost of undertaking additional assessments) and/or to increase provider oversight to ensure poor market practices are being addressed.聽

b. Conducting cost of care exercises for residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over.聽

c. Engaging with providers, for the purpose of both the cost of care exercise and Market Sustainability Plan, to better understand the potential impact of reform on the local market. This may include working with local provider associations or third sector organisations to financially support local capacity, where appropriate.聽聽

d. Developing and executing a Market Sustainability Plan.聽聽

2. The list set out above is not intended to be exhaustive but is intended to guide recipient authorities as to the types of activities which the Government considers recipient authorities should prioritise in order to meet the grant conditions. Recipient authorities should determine for themselves whether particular activities not listed are broadly similar in nature to those above, provided they relate to the overall objectives for the funding listed in paragraph 1.

3. The remaining seventy-five per cent of the funding, or where a recipient authority incurs implementation costs amounting to less than twenty-five per cent of their allocation, must be used to increase rates if its rates are below the fair cost of care (in respect of residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over, including those who operate in extra care settings).

4. The Department of Health and Social Care will make available guidance, templates and wider, ongoing support to help local authorities meet the grant conditions and achieve the purpose of the funding, as set out in paragraphs 2 and 3 of the grant determination.

5. Local authorities will need to provide evidence that funding has been used for the purpose set out in this grant determination, as part of the reporting requirements in paragraph 9 below.

6. Any amount of funding from the grant not spent on the above measures must be returned by recipient authorities to the Minister of State.

Payment arrangements聽

7. Grants will be paid in monthly聽 instalments.

8. Funding from the grant must be spent within the designated financial year. If any funding from the grant is not spent within the designated financial year, the聽 Secretary of State may require repayment of the grant monies paid, as may be determined by the Secretary of State and notified in writing to the authority.

Reporting requirements for local authorities聽

9. As a condition of the funding and to be eligible to receive further funding in financial years 2023 to 2024 and 2024 to 2025, local authorities must provide evidence of the following to the Department of Health and Social Care:

a. Cost of care exercises for residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over. Exercises will need to accurately reflect local costs such as staff pay and travel time. They will also need to provide and evidence an appropriate return on capital in residential and nursing care, and return on operations in both residential and nursing care, and domiciliary care. Local authorities will need to provide both a cost of care data return and report. The key content of a cost of care report and a template for data returns can be found in the Market Sustainability and Fair Cost of Care guidance. Use of these is mandatory as part of an acceptable return. Recipient authorities will be required to publish the cost of care report pending review and notification to do so from the Department of Health and Social Care, on their own website.聽聽

b. A provisional Market Sustainability Plan. Using the cost of care exercise as a key input, this plan will identify key risks to the local care market, with particular consideration given to the further commencement of Section 18(3) of the Care Act 2014. The plan should outline mitigating actions, including the pace at which the local authority intends to move towards the fair cost of care, where it is not being paid already, to improve the sustainability of the residential and nursing care market for those aged 65 and over, and the domiciliary care market for those aged 18 and over. A template is available in the Fund guidance and its use is mandatory as part of an acceptable return.聽聽聽

c. A spend return detailing how Market Sustainability and Fair Cost of Care funding allocated for year one is being spent in line with the stated purpose.聽

10. The returns outlined in paragraph 9a, b and c must be submitted to the Department of Health and Social Care by 14 October 2022. Please note, it is the provisional Market Sustainability Plan which must be submitted by this deadline, not the final plan. The contact details for submitting these returns are: marketsreform@dhsc.gov.uk. The Department of Health and Social Care reserves the right to update the means by which returns are submitted, and may provide alternatives in future, including a web-based system for greater efficiency.

11. Final spend reports must be approved by the local authority鈥檚 chief executive or s151 officer.

12. A final Market Sustainability Plan, outlining how funding in years two and three of the grant (2023 to 2024 and 2024 to 2025) will be spent in line with key actions set out, will be expected in February 2023, after local government budgets have been finalised for 2023 to 2024. Recipient authorities will be required to publish these, with commercially sensitive information redacted, following review and pending notification to do so from the Department of Health and Social Care.

13. Notwithstanding paragraph 16 below, where cost of care exercises or Market Sustainability Plans are returned to the Department of Health and Social Care:

a. Incomplete聽聽

b. Do not contain the required level of evidence and detail (as set out in the Market Sustainability and Fair Cost of Care guidance)聽

c. Extremely inconsistent with returns from authorities with similar markets聽

d. Late, or not returned at all聽聽

Officials from the Department of Health and Social Care may agree to engage with the local authority to understand what additional support may be required to meet the grant conditions. This may include asking the local authority to provide more data, repeat exercises, or work with a neighbouring authority with a similar market to ascertain the reason for any discrepancies. Should the local authority remain unable to submit an acceptable return, future funding from the grant will be withheld.聽聽

Financial management聽

14. A recipient authority must maintain a sound system of internal financial controls.

15. If a recipient authority has any grounds for suspecting financial irregularity in the use of any grant paid under this funding agreement, it must notify the Department immediately, explain what steps are being taken to investigate the suspicion and keep the Department informed about the progress of the investigation. For these purposes 鈥渇inancial irregularity鈥� includes fraud or other impropriety, mismanagement, and the use of grant for purposes other than those for which it was provided.

Breach of conditions and withholding future funding聽

16. If the recipient authority fails to comply with any of these conditions, or if any overpayment is made under this grant, or any amount is paid in error, or any unspent funding is not returned, the Minister of State may reduce, suspend or withhold Market Sustainability and Fair Cost of Care Fund payments in 2023 to 2024 and 2024 to 2025 or require the repayment of the whole or any part of the grant monies paid, as may be determined by the聽 Secretary of State and notified in writing to the authority. Such sum as has been notified will immediately become repayable to the Secretary of State who may offset the sum against any future amount due to the recipient authority from central government.

17. The list below contains examples of a breach of the grant conditions:

a. Inappropriate use of funding, or no evidence of funding having been spent on the specified purpose聽

b. Failure to submit one or more of the documents as specified in paragraphs 9a-c and/or submission of incomplete documents聽

c. Non-engagement with the support made available or requests for further information as set out in paragraph 13聽

d. A provisional Market Sustainability Plan, and part one data return that do not demonstrate a considered analysis of the recipient authority鈥檚 local care market聽

e. A part two data return and final market sustainability plan that does not demonstrate how funding will be used to support recipient authorities to move towards the fair cost of care identified in their cost of care exercise聽聽

f. A provisional and final Market Sustainability Plan that does not include a clear strategy to prepare the local market for upcoming reforms to the adult social care market, thereby not using the funding for its intended purpose.聽聽