Agenda item

[Report of the Director of Adults and Health. To be introduced by the Cabinet Member for Adults and Health]

This report seeks approval for the award of a block contract to One Housing Group (OHG) for a total of 142 extra care units in three Haringey-based schemes at Protheroe House, Lorenco House and Roden Court.

 The Cabinet Member for Adults and Health introduced this report which sought approval for the award of a block contract to One Housing Group (OHG) for a total of 142 extra care units in three Haringey-based schemes at Protheroe House, Lorenco House and Roden Court.

The Cabinet Member supported the proposal to establish a block contract arrangement with One Housing Group which will secure capacity for Extra Care provision for older and disabled residents at competitive market rates whilst fulfilling our commitment to the payment of London Living Wage and meeting current inflationary pressures. The proposal would enable specialist provision to be retained locally and be available to Haringey residents enabling them to remain as independent as possible within a structured care environment. The proposal would promote better quality of service provision as it would facilitate the retention of staff within OHG and support their ongoing learning and development to enable them to deal with more complex cases and escalation of need.

Further to considering exempt information at item 39,

RESOLVED

1. To approve, pursuant to the Council’s Contract Standing Order (CSO) 9.07.1(d), the award of a block contract to One Housing Group for the block purchasing of a total of 142 extra care units in three schemes (Protheroe House, Lorenco House and Roden Court: 50, 52 and 40 units respectively) for an initial period of 3 years

2. To approve the costs for the block contract arrangement for the initial period of 3 years of £12m, or £4m p.a.

3. To approve the option to extend the contract for a further 2 years at an additional cost of £9m or £4.5m p.a. for each yearof the extended contract

4. To note total costs of £21m over the life of the contract which would run from 1^st April 2020 to 31^st March 2025 if the option to extend were taken up

Reasons for decision

The Council is committed to paying rates for care compatible with the payment to care workers of the London Living Wage. The Council currently commissions on a spot purchasing basis a total of 142 units in three extra care schemes (Protheroe House, Lorenco House and Roden Court) with OHG. Ten of these units are currently provided as shorter-term intermediate care beds but given demand and the profile of service users over time, all 142 units will be offered as long-term care under the proposed block contract arrangements. By converting the above current arrangements to a long-term block contract, the Council will achieve better value for money for local specialist provision whilst fulfilling the current LLW requirement.

Furthermore, the Council has negotiated competitive rates with this supplier as there is a limited market locally. The Council was not in a position to establish a new block contract for the Extra Care provision via an open tender process as there are no provisions of a similar size in Haringey or sub-regionally capable of meeting the requirement to support all current service users in services.

Moreover, residents who live in extra care housing have assured shorthold tenancies. It would neither be feasible nor desirable for the Council to demand service users to give up their rights of tenure as moving current service users to alternative provision would prove very disruptive to residents, contrary to the wishes of relatives and families and would also run counter to the principles in the Care Act (2014) to offer choice and control to residents. Finally, the accommodation, as well as the care and support, is provided by One Housing Group which is the only basis on which the provider has agreed service provision, and therefore, an alternative care provider would not be a viable option on this occasion.

Furthermore, by setting up a block contract with OHG, the Council is able to negotiate exacting service delivery terms and quality standards for older and disabled residents in need of care and support. The arrangement will achieve improved service quality as staff retention within the provider will be promoted and their ongoing learning and development will be supported; this will facilitate acceptance of more complex referrals.

The proposed arrangement will also yield efficiencies when applying the LLW requirement in commissioning costs by securing a reduced purchasing rate per placement through a block contract as compared to the existing contractual arrangements. As part of the proposed block contract arrangement, the move to the LLW rates will take place in a phased approach and will be reflected in the current pricing structure. It will include voids and bad debts allowances at all three extra care schemes as well as the application of care staff enhancements which will form part of the provider’s Care Staff Benefits recruitment and retention initiative.

Commissioners have negotiated a favourable rate for core services for the Extra Care provision which is in accordance with the costings for other home care and home care related services and within the context of the Council and OHG’s shared commitment to paying LLW and anticipated inflationary pressures. The proposed block contract marks a significant shift from current contractual arrangements and offers an increased level of certainty for both the Provider and Haringey residents.

Through the introduction of LLW to the pricing structure of the three extra care schemes, the Provider will continue to attract and retain more experienced, skilled employees and the proposed rates will match those of other extra care schemes (both delivered by the Provider and other organisations delivering extra care sheltered housing) in neighbouring Boroughs which are already paying LWW. This is critically important in the wider strategic context of retaining staff skilled in enabling people to continue to live in community settings, with the requisite support to lead healthy and fulfilling lives.

Alternative options considered

The alternative options available to the Council were to ‘do nothing’, to conduct an open tender arrangement, to commission a new block arrangement for the Extra Care provisions with OHG, to decommission or to deliver in-house These options were considered but not taken forward for the following reasons:

The first option, to ‘do nothing’, would mean the Council would continue to pay spot contract rates for the provision of extra care, including full void premiums instead of negotiating an improved void management strategy and minimal payments thereof and posing a risk to payment of LLW. The non-payment of LLW pay rates adversely has an impact on the Provider’s ability to attract and retain good quality, trained and motivated care staff as they would compete with neighbouring boroughs for staff which pay more competitive rates. Moreover, the payment of LLW is in line with the Council’s commitment through the Ethical Care Charter to LLW in the care sector where care workers are often poorly remunerated.

The second option was for the Council to establish a new block contract for the Extra Care provision via an open tender process. This has not been pursued because there is a limited market for Extra Care services locally and there are no provisions of a similar size in Haringey or sub-regionally capable of meeting the requirement to support all current service users in services. Importantly, residents who live in extra care housing have assured shorthold tenancies. It would not be desirable for the Council to require service users to give up their rights of tenure in order to tender and then decant them to another provision if it existed. Even if there was capacity in the market to meet the need for Extra Care services, moving current service users to alternative provision would prove very disruptive to residents, contrary to the wishes of relatives and families and would also run counter to the principles in the Care Act (2014) to offer choice and control to residents. . Moreover, the accommodation, as well as, the care and support is provided by One Housing Group which is the only basis on which they have agreed service provision, an alternative care provider therefore is not a viable option.

Another option considered was decommissioning the service, which was not considered a valid option as this model of care and support is a progressive way to offer vulnerable people care and support whilst maintaining their community links and independence and the residents within the schemes would still require care and support. There is a paucity of this provision generally and the only alternative would be residential care, which is not suitable for those residents who can and do want to remain and independent as possible in their communities. Moreover, the cost of residential care would be higher and place strains on an already challenged budget for adult social care.

The final option considered was developing an in-house provision to support service users. This, however, was discounted at this time as the delivery of care and support are integral to the provision of accommodation and the Council does not have the property portfolio adapted to deliver this service.