Our commissioning approach for adults, children and families in Gateshead

Money and assets

During an extended period of challenging times for local government finances, Gateshead Council has protected core spending on social care for children and adults to a great extent. This is very clearly the case for the funding of formal care, whether commissioned or delivered in-house by Council services. Further, potentially greater challenges are ahead for all public services and the Council is planning for this through the Medium-Term Financial Strategy (MTFS).

Revenue spending: in-house services

Gateshead has retained very substantial in-house care and support services, by comparison with most Councils nationwide. There is a continuing commitment in policy and financial strategy to retain the current suite of services for both children and adults. Indeed, there are plans for further expansion of direct provision and commissioning will lead the design and development of some major projects. Taken overall, in-house services account for more than £15m of care and support and a growing proportion of overall spend, delivering critical provision for vulnerable people.

Revenue spending: commissioned services

The IASCS and Children's directorates have managed challenging budget setting over recent years without generally cutting spending on commissioned services. Inevitably, inflation and cost of living factors continue to drive up costs of commissioned provision and in some sectors, particularly for children's care price control remains a problem. However, for the majority of placements and support packages, the Council has retained good control of price whilst working with providers to achieve the right balance between value for money and stable supply of care.

There is further challenge ahead overall for both directorates and certainly for IASCS, the MTFS shows real term reductions in the cost of care and support. The key to managing this change from year to year will be ensuring more people are supported at home through home care and community services, and where possible the need for care is prevented, reduced or delayed through strengths-based approaches. This will enable admissions to care homes to be reduced to national and regional target levels, so significantly reducing the overall cost of social care locally. Commissioning is designing and delivering in 2024 the future shape of home care, residential and nursing services through recommissioning and procurement, allied to new contract terms and conditions.

Grant and partnership funding

The Council continues to attract and deploy significant government and other grants to fund core and developmental services for vulnerable adults and children. This includes continuing large-scale funding of statutory services, such as Education Support Grant and Better Care Fund (BCF), which facilitates a significant proportion of core adult social care staffing, along with hospital discharge and avoidance provision.

The Council also has a track record of attracting substantial grants which complement statutory provision and help prevent or delay demand for formal care. This includes funding for changing futures and for tackling homelessness. There is a continuing commitment to seeking and utilising external funding to consolidate and expand core services whilst supporting innovation.

Managing investment in commissioned services

Commissioning decision making is substantially directed to managing risks and challenges in the markets for care and support provision. These are driven by commercial and market factors, or the wider economy and the risk can be either increasing costs or the threat of services closing or being unavailable. Commissioning has plans in place to manage the following circumstances:

• routine demand for inflationary increases in fees for high volume spot purchased sectors; home care and care homes and some children's services
• responding to demands for exceptional and unilateral increases in fees
• using block contracts where appropriate to guarantee supply and control price
• identifying and intervening in potential provider/service failure

IASCS Commissioning is refreshing its annual process for reviewing fees in key sectors and proposing and funding uplifts related to inflation. For some sectors the process is built into framework standard terms and conditions and will be refreshed periodically when the relevant framework is recommissioned. In other sectors, there will be annual consultation with contracted providers using surveys and workshop meetings where appropriate. Consultation material will then be fed into the overall budget setting process for the coming financial year. Confirmed fee rates will be communicated typically in March each year.

The processes for reviewing and uplifting fees for children's services relating to inflation are under consideration. It is often challenging to manage these processes through a regular annual process as for adult social care. This is owed partly to the widespread use of regional frameworks with standardised contracts and also to placement changes for young people.

One-off and exceptional requests for increases in fees for specific services or providers have increased greatly since the Covid19 pandemic. These will be handled somewhat differently for children and adults services, because for children's placements there is often only one child placed with the provider or in the setting. The response to requests from adults providers will deal with the following issues:

• if service users' needs change, there should be a social work review
• unilateral fee increases for one provider may lead the Council to be liable to significant legal challenge from other providers
• if a service or provider is at tangible risk of economic failure or closure, Commissioners will review urgently the situation with the provider to consider options for the Council to intervene

Block contracts can be utilised for short periods or on an extended basis and provide the benefit of certainty of income and cost to both commissioner and provider. Block contracts will be subject to appropriate procurement process, whether via a framework or open tender. Annual fee increases in relation to inflation will not usually be paid for block contracts.

Gateshead Council has recently reviewed its options and approach to intervention in provider failure arising from financial viability, in the light of subsidy regulations introduced in 2023. The Council also has relevant duties under the Care Act 2014. Where practicable, contractual terms and conditions will make specific provision for economic failure, closure or inability to deliver services. This will enable the Council to respond proportionately and effectively outside the scope of subsidy regulations.

The Council does not publish its specific approach to intervention in provider failure or risk of closure, as each service and situation is unique. Commissioners encourage all providers to contact the Council at the earliest stage when risk of closure or failure is identified. The matter will be managed promptly, confidentially and sensitively, with appreciation of the obligations and risks for all parties.

Capital investment and assets

Gateshead Council has a distinguished track record of capital investment, both on iconic buildings and accommodation to support essential services. Recent examples of high-quality new buildings developed to support vulnerable people, including a special school and intermediate care residential centre.

As a stockholding housing authority, Gateshead has a Housing Revenue Account (HRA) and capital investment programme. Capital projects have utilised a mixed economy of funding sources, including HRA, government grant and corporate programme investment. The Council is considering a programme of accommodation developments to support the social care needs of adults and children with complex needs, potentially encompassing acquisitions, planning gain sites and direct new build.

Joint finance

The Council's partnership with the ICB forms the main route through which investment and commissioning are jointly managed and accounted for and this relationship is continuing to evolve. Strategic planning and decision making are facilitated through the Integrated Commissioning Group, conferring with other strategic groups overseeing finance and key themes or user groups at Place. These bodies report through to the Health and Wellbeing Board and Gateshead Committee for Place.

The Better Care Fund is the main route through which much spending on health and care is funded and key partnership working is managed, notably around hospital discharge. Historically Gateshead has also made very frequent use of s256 of the NHS Act to transfer funding from the ICB to the Council. The Council through AISCS and Public Health has recently reviewed the large-scale usage of s256 transfers and the legacy funds involved. It has now opted for a new approach to potential funding transfers from health under s256 or some other provisions, along with a new template s256 agreement.

It is generally expected that Gateshead will see much less frequent or large-scale use of s256 transfers. The new approach sets out some broad timescales and parameters and clarifies the considerations the Council will have in responding to a proposed transfer:

• whether there is a reason for the Council to be involved and for the NHS not managing the proposed spending itself
• whether the proposals align with Council duties, powers and/or strategic priorities
• the process through which it would be required to manage and spend the funding, such as procurement or a grant scheme and the appropriateness or efficacy of that
• the implications for the Council of the transfer for staff time, administrative or other costs