Charges become a very important part of social care planning when one takes into account that the government has given people needing state assistance with residential accommodation a right to choose residential accommodation of their own preference, so long as it is suitable, available, and at a price which is no more than the authority would normally expect to have to pay for the particular level of care needs.
This means that if a place in a ‘posh’ home is more expensive than the authority regards as its ‘usual’ price, the person must look to others to provide a top-up to cover the difference between the authority’s ‘usual’ cost and the actual contractual price of the home or the particular room in that home.
Individual residents have not, until recently, been allowed to top-up their own care packages, because the charging regulations take their remaining capital into account already, in setting the level of the contribution which they are to be charged anyway, by turning it into ‘tariff income’ and counting that towards the actual income total. Taking more off a person when it had already been taken into account would be a form of double charging, so the rules stated that top-ups can be provided only by relatives or third parties such as charities.
This rule has been altered slightly under new regulations (taking effect as para 4 of the Choice of Accommodation Directions) made under the Health & Social Care Act, and the effect is that people who would otherwise be over the capital limit, ie full payers, were it not for the 12 week property disregard, or the making of a deferred agreement to pay for contributions assessed on the value of a former home, are able to spend their own savings on accessing higher standards of accommodation.
In any event, homes have become wise to the implications of the top-up scheme, because many of them face going out of business, it is said because of local authorities holding them to an artificially low price which is unsustainable. In all seriousness, though it is not possible to generalise about the efficiency and bona fides of all home providers, it is well established that there is a recruitment crisis in social care. This means that a provider’s break-even/profit calculations, assuming a maybe 65% staffing costs figure, simply can’t work out as planned, when real staffing costs are more like 72%. And in some parts of the country, land values are such that a home is worth more for the land it occupies and its resale potential as a domestic residence, than it would sell for as a going concern.
Thus many homes have now started to say that they don’t provide standard rooms at all, and that all of their rooms are now top-up rooms. They agree to take the local authority fee, in principle, but say all rooms will require an additional sum from a third party before they can be accessed. Objectively speaking their rooms may not have been improved at all, and there may be nothing to distinguish the rooms from those offered by other homes in the area.
In our view, instituting an accredited ‘star-rated’ system locally is the most constructive means open to an authority to keep the lid on that tendency. Such a system will mean that homes can be seen objectively to be offering above standard care and accommodation, whether that be by reference to staff ratios, decoration, recreational activities etc. Clients’ families who elect to pay a top-up to such homes will actually be getting something worth their money.
The fact of the matter is, however, that if market forces enable a home to stick to this position, because demand exceeds supply, and the home is prepared to take the commercial risk that no local authority placements will come its way, because of the need for the so-called top-up, then this is not something which an authority can prevent. It is not just velvet curtains and gold taps which make a particular home desirable and thus able to charge more than in the past; it might be location, an out of date reputation – it might simply be scarcity.
This has serious implications for the authority’s management of the market. The authority must contract for the discharge of its statutory duties. It will be known in advance to the authority roughly how many places it will need to contract for over the next year. If it cannot access enough places at the rate it is prepared to pay, it will arguably be in breach of that duty. The fact that the homes are willing to take the authority’s low fee, so long as they can treat the rest as a top-up, does not mean that the authority has made arrangements for the proper discharge of its functions – for it can never predict the willingness and ability of relatives to pay the top-up for the particular people who will be owed an accommodation duty in the forthcoming year.
In addition, if the authority pretends that the low rate it is prepared to pay the homes as the local authority ‘contribution’ is the cost that it ‘normally expects to have to pay’ (see the >Guidance accompanying the Choice Directions), (perhaps by doing a deal for a few standard rooms in one grotty home which is glad to take this fee) it will be saying to the whole community ‘you can ‘choose’ to get into residential care around here, but only if you can access a top-up – you’ll have to accept a placement further afield or even abroad if you can’t, because we can access it more cheaply over there’.
How this could be regarded as lawful, when it involves the enforced separation of people who are important to each other’s well-being, firstly, and secondly – if abroad, as we have read about recently – when it involves ignoring the s26 NAA requirement that the placements for board and personal care be in accommodation registered under the Registered Homes Act 1984, remains obscure to us….
The real problem for authorities taking this line is that the guidance accompanying the Choice of Accommodation Directions clearly states that if at the point when the authority is obliged to discharge the s26 NAA function in respect of an individual, there is no accommodation available at its usual rate, the authority must make an appropriate placement and not ask for a top-up at all. This is because the statutory duty has to be discharged, and the placement is not being ‘chosen’ by the individual under the Directions in any real sense. ‘Appropriate’ here will include consideration of the need for social and emotional contacts for the person concerned. Recent >guidance on deferred payments and the changes made to the top-up system regarding liable relatives and residents themselves confirm that this is the case.
The judge in the Coventry CC ex p Pegg case held that the concept of a ‘standard rate’ for s22 NAA charging purposes has no bearing on the situation where the accommodation is provided by the private sector: there, the relevant cost is the contract price. The concept of the authority ‘paying’ for the place is not an accurate reflection of what goes on when a place is provided for the client in local authority residential care: it funds the requisite expenditure itself. The standard rate in public sector homes is supposed to be the true cost of provision, however the authority chooses to work that figure out, whilst what the L/A ‘usually expects to pay’ the private sector must surely refer to the fact that contractual rates for different standards of care will vary and cannot be predicted in advance, when one is looking at private sector accommodation.
The setting of arbitrarily low cost ceilings tends to result in there being in force, in any given area, three price rates for private sector accommodation, only the latter two of which are lawful able to be paid, in public law terms:
the authority’s public ‘cost ceiling’ rate, above which the authority thinks it is entitled to look for a top-up and which it sets without regard to anything related to the cost of arranging provision of the service required – ie (usually) DWP benefit rates + an increase under the level of inflation
the average of all the relevant private sector homes’ contractual rates for their actual or notional ‘standard’ accommodation: this is the fee which should be agreed to be the local authority rate for a particular level of need for each client group
each individual homes’ contractual rates for actual better-than-standard accommodation which can be accessed with a top-up
See the related questions:
>Should a person be allowed in law to use the top-up system to access a higher level of care, (ie nursing rather than residential) not merely posher surroundings, and have the authority pay its ‘usual rate’ as the bottom slice?