Thursday 13 December 2018
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Personalisation Agenda Takes Bite out of Councils Homecare Budget Spend

The pattern of year-on-year increases in the volume of homecare hours purchased by local authorities
has come to an end, with the latest analysis by healthcare market intelligence provider Laing & Buisson
showing that, after a 15 year run of growth, spending in 2009/10 was down 8% over the previous 12
month period.

However, rather than marking a shift away from central government policy supporting home-based
support, the Domiciliary Care UK Market Report 2011* argues that this change can be attributed in the
main part to the personalisation agenda, which is seeing an increasing number of social services clients
given the funds to purchase their own care services.

Research published by Laing & Buisson shows that independent sector homecare businesses continued
to increase their market share, achieving an 84% slice of the hours funded by local authorities in
2009/10 compared with the 16% that local authorities provided through their own in-house teams.
The 8% drop experienced in 2009/10 comprised a 23% drop in in-house hours and a 5% drop in
independent sector hours, illustrating the way that local authorities are increasingly struggling to justify the
cost of running expensive in-house teams.

Councils’ in-house teams are increasingly being used for limited-term or rehabilitative care packages,
thanks to the fact that the costs associated with in-house provision, on average, are double the costs
achievable through the use of independent sector providers.

The report warns, however, that in response to the changes brought about by the personalisation
agenda, local authorities are evolving their commissioning processes so that after many years of
consolidating purchasing into bulk homecare contracts they are now spot-purchasing against framework
agreements instead. The North West has advanced the provision of personal budgets and direct
payments the furthest, with 470 adults per 100,000 population in receipt of the new style funding, followed
by Eastern England (380), Yorkshire and the Humber (340), North East (345), West Midlands (295), South
East and London (285), East Midlands (280) and lastly the South West (215).

In March 2010 132,000 people were receiving personal budgets and/or direct payments, of which 48%
were young disabled adults, 12% were older people aged under 75 and 40% were aged over 75. However,
Laing & Buisson’s research indicates that not all older people who are given personal budgets are willing
recipients with some in fact signing up to these programmes because it is the only way the user can
continue to receive care from their familiar care worker. While personal budgets in some cases result in no
change in the amount of care given under former funding streams scheme, in other cases Laing &
Buisson was informed that the change to a personal budget had resulted in less homecare being afforded
to a user.

Laing & Buisson’s research for the report indicates this practice of giving clients greater control on how
they receive support is leading to a downward pressure on prices for council-arranged homecare. It
may, however, also offer greater opportunities for new homecare providers to enter the market in a
move which may reverse a hitherto polarisation of providers, with large businesses concentrating on
local authority work and smaller ones seeking out self-funding clients.

The report shows that alongside claims that the private-pay market will continue to grow as people live
longer and find that they do not qualify under tighter social services’ eligibility criteria, the fastest
growing market sector is that of NHS homecare with hospital discharge and admission-avoidance
schemes fuelling much of this expansion.