CARE ACT SEMINAR
Provider Failure, Market Oversight
& Market Reshaping
Correct as at March 2015
In the beginning….
• There was the Local Authority, and the Local
Authority provided services
• Then came the Compulsory Completive Tendering
Policy of the ‘80s and ‘90s…..
• …..and the Best Value policy of the ‘00s
• Throughout the ‘00s there was a growing
emphasis on engaging with stakeholders to
identify need…….
• ….which extended into new duties to consult,
involve and co-design services with users – to
“recast the service user as the service shaper”
And the Department of Health said….
• “Increasingly, the role of local authorities will no longer
centre on the purchasing and provision of care and
support. Instead, authorities will be expected to take a
leadership role: identifying the needs of the local
population, supporting the informal and community
networks that can help people stay independent, and
ensuring that people have a diverse and responsive
choice of options” (Caring for our Future)
• ….so the role of the local authority has changed
primarily to a facilitative one, and the role of the service
user to active participant or even micro-commissioner
The Market: National Context
• In 2012-13 the total net expenditure on adult social
care by local authorities in England was nearly £15
billion (an average of around a £100 million per
authority) of which the vast majority was spent in the
private and voluntary sector
• Around half of all care home places taken up by older
people are self-funded – so the total size of the care
market in both regulated and unregulated care will be
considerably larger
• Social care has a substantial workforce, estimated at
around 1.85 million in 2011
http://ipc.brookes.ac.uk/services/documents/The_Basics_of_market_facilitation.pdf
The Market: NEL’s Approach
• In 2007, NELC delegated adult social care commissioning to
the CCG (then CTP) via a s75 agreement
• In 2011, mental health functions were transferred to
Navigo, and provision of community services to Care Plus
• In 2013, delivery of adult social care functions was
transferred to focus independent adult social work
• 5 lead home care providers, and other approved providers
• 47 homes run by 35 different companies in NEL; inc:
 residential and nursing home providers
 Specialist learning disability residential and nursing homes
 Specialist mental health residential and nursing homes
• There are a range of third sector and voluntary providers
Market Oversight and Provider Failure
• What’s the Problem?
• What solution does the CA seek to provide?
• What are we doing about it locally?
Market Oversight and Provider Failure:
the Problem
• We have an increasingly diverse provider market
• As in any market, some business fail, businesses
change hands & some are bought out and
amalgamated
• Some business change is planned and managed,
some provider failures are sudden and disorderly
Market Oversight and Provider Failure:
the Problem
• There is currently no formal system in place for
checking how well a care provider is managing its
own finances – no early warning
• This can lead to sudden and/or unexpected collapse
and leads to breakages in the continuation of care,
anxiety, cost, disruption, harm etc
Market Oversight and Provider Failure:
the Problem
Case Study : Southern Cross
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Southern Cross Healthcare (Group plc) was the largest provider of care homes and long term
care beds in the United Kingdom, operating over 750 care homes, 37,000+ beds and employing
around 41,000 staff
Following rapid expansion financed by the sale of leases of its homes, its shares fell 98% from
early 2008 to early 2011, reducing its market value from £1.1bn to around £12m
In early 2011 the company was in crisis, as it increasingly found its annual rent bill (over £240m
on its 750 properties) unaffordable
With public spending cuts leading to fewer referrals (and a drop in occupancy rates from 92% to
84%), it was forced into negotiations with its landlords for rent reductions and appealed to the
government for support
By July 2011, attempts to rescue the company had failed, and all care homes were being taken
over by Southern Cross’ landlords
Late in 2011, two staff at the company's Orchid View care home in Copthorne, W Sussex, were
arrested on suspicion of ill-treatment and neglect of residents. A coroner's ruling in 2013 found
that 19 deaths at Orchid View were unexplained, but stated that under Southern Cross' former
management the home was "mismanaged & understaffed" & rife with "institutionalised abuse”
Market Oversight: the Solution
• CQC’s role is to ensure that hospitals, care homes, dental
and general practices and care at home services provide
safe, effective and high-quality care – to monitor, inspect,
regulate and encourage improvements
• CQC given new role to assess financial ‘health’ of “hardto-replace” care providers from April 15
• Applies to only the largest providers, i.e.
 Dom Care providers of more than 30,000 hours pw, OR more
than 2,000 people receive care, OR more than 800 people
receive care and they each receive more than 30 hours each
 Resi Care providers of more than 2,000 beds, OR providers of
between 1 - 2,000 beds and either they have beds in more
than 16 LA areas, or the capacity in each of three or more
LAs areas exceeds 10%
Market Oversight: the Solution
• CQC can take action where satisfied of ‘significant
risk’ to financial sustainability
• New power to request information and intel
• New power to ask provider to develop a
sustainability plan
• Can now arrange an independent business review
• CQC will notify LA if failure likely so LA can prepare
• CQC will share info with the LA to assist them in
preparing for and responding to failure
Market Oversight: the Solution
• CQC’s new operating model:
 Duty of candour – acting in an open and transparent way
re the care provided; when things go wrong, give a truthful
account, offer support and an apology
 CQC use standards to help them make judgements on
whether regulations have been breached; their Essential
Standards will be replaced by Fundamental Standards in
April 2015 – must deliver on these in carrying out
regulated activity
 More stringent fit and proper persons test; applies slightly
differently depending on whether the provider is an
individual, partnership or company – and to employees
Provider Failure: the Solution
• The CA imposes clear statutory duties on LA’s where a care
provider fails; extends existing duties of care
• Duties apply whether or not failed provider within CQC regime
• We now have a temporary duty to ensure that the needs of
people are met if their provider fails, irrespective of: eligibility,
funding, who made the arrangements for care, type of care, and
whether the provider is one with which we contact
• People should not experience a gap in their care
• We may discharge our duty by:
 providing I&A or signposting
 case manage the process and facilitate physical moves
Provider Failure: the Solution
• Business failure will usually involve the appointment of an
Administrator who represents the interests of creditors
• Building a relationship with the Administrator is key. There is
mutual benefit to doing so. Understanding each player’s
intentions is key
• In some situations the interest of the creditors will be best
suited to business continuation
• In that situation we are required to co-operate where possible.
insofar as it does not adversely affects people’s wellbeing
Provider Failure: the Solution
• Local authorities may still chose to meet need, even where no
duties to do so arise
• This is likely to be where urgent needs arise due to service
interruption – as opposed to business failure
• Not all situations where a service has been interrupted or
closed will merit local authority involvement, because not all
cases result in service users having urgent need
• Whether to act on this power is a judgement for the local
authority
• If the provider has not failed, it is primarily the provider's
responsibility to meet need as per their contractual obligations
Provider Failure: NEL’s Approach
• Colleagues have successfully managed the failure,
decline, exit, remodelling of a number of providers in
recent years, via:
Market Intelligence and Failing Services
Triangulation of intelligence – Portal, PALS,
Complaints, SI, Contract Monitoring, Relationships
Policy and Checklist (covers the advice and learning
points in the CA’s Statutory Guidance e.g. re
managing media messages and communication)
CCC and Delivery & Assurance committee
Market Shaping
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What is it?
What are it’s aims?
How are these aims achieved?
What’s our approach in NEL?
Market Shaping: what is it?
• The Care Act imposes new duties on LAs to
facilitate and shape the market
• Market shaping is the process by which LAs
ensure that services:
Meet the needs of all in their area – both those whose
needs are met by them and those who are self-funded
Promote wellbeing of service users and carers
• Could include active intervention or more
‘passive’ support such as provision of intelligence
Market Shaping: its aims
Market shaping aims to secure:
1. An appropriate choice of different types of
service and providers
2. High quality, personalised and outcomefocused services
3. A supply of such services sufficient to meet
the demand for them
4. A stable and sustainable market
Market Shaping: achieving aims
Effective shaping of the market to achieve these
aims is likely to involve such activities as:
1. Engaging with stakeholders (users, providers and
professionals)
2. Assessing and sharing knowledge of the demand
and supply of services and the way that needs
and aspirations are changing
3. Encouraging innovation, investment and work
on improvement where necessary in order to
meet this demand
Market Shaping: achieving aims
• The Act introduces a new emphasis on:
1. Supporting those who purchase their own
services, to a) empower them to be effective
consumers, b) ensure they have adequate
information to use this power
2. Co-production, to ensure that the market reflects
the needs of services and carers, providers and
the wider community
3. Building Community Capacity, to support the
more formal provider market
Market Shaping: PSMDB
• Aims to support the delivery of
health and social care services by
charities, voluntary organisations
and social enterprises
• and to develop new organisations
that can increase the market
supply of third sector providers
• Gives the participants the skills and
confidence to set up and deliver
interventions in their area.
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More info: neil@cert-ltd.co.uk
• Start-up investment
• Access to business advice and
guidance
• Help to put a bid together
• On-going support including SROI
• Training and development for
Managers and Staff
• Sign-posting and support to access
other sources of funding
Market Shaping: RCC
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Free support to help communities and • Change Champions:
organisations provide community based
solutions with own solutions
• A three day over three month intensive
and practical course
Promoting practical actions that will
deliver improvement and change
• in depth knowledge and skills
development – focus on action not
Introduction to well-being: an overview
awareness – intensive, project support
to raise awareness
Bespoke support to organisations
developing new initiatives
Targeted skills development –detailed
starter courses with focus on an
individual issue
• Gives the participants the skills and
confidence to set up and deliver
interventions in their area
• More info: Linda@uni.uk.net or
Kevincooper.mail@gmail.com
Market Position Statement: NEL
• Central to the process of market shaping is developing a
market position statement
• The Market Position Statement(s) for NEL are intended to
 give information and analysis which describes what people
and services look like now
 flag the changes to the sort of care and support we think
that people will want to increase independence, choice
and control
 set out how we plan to purchase services, to work with the
market to promote best practice
 help businesses understand the future environment for
their work and decide how to grow in future
Market Position Statement: NEL
• NEL’s market position statement is intended to
enhance the understanding of all parties and
can be found at:
http://www.northeastlincolnshireccg.nhs.uk/ma
rket-position-statement-mps/
Market Shaping, Market Position
Statement
Market Shaping, Market Position
Statement
Summary: contributing to the Act’s vision
Caring for our Future
The transformation envisaged by the Care
Act “will come about only if it is a
genuinely collaborative endeavour. We
need to dissolve the traditional boundaries
that lie between the third sector, private
organisations, local authorities and
individuals. And we need to listen”
(Caring for our Future 2012)
Comments, suggestions, questions?
Presented by:
Jake Rollin
Assistant Director, Care & Independence (NELCCG)
For further comments / queries:
NELCCG.workforce-FAQ@nhs.net