Agenda item

The Cabinet Member for Health, Social Care, and Well-Being considered the report which noted that Community Equipment supported vulnerable people to remain independent for longer improving their outcomes and reducing the need for more formal and costly care.

It was noted that, to enable the best value for money in purchasing commuminty equipment, mainly due to economies of scale, Haringey joined the London Consortium for the provision of Community Equipment. Haringey jointly tendered and awarded the contract to Medequip Assistive Technology Ltd (‘Medequip’) through a framework contract (“the Framework”). At present the Consortium consisted of 21 London Boroughs out of 33. The only borough delivering in house equipment store was Enfield.

The 4-year Framework with Medequip was agreed at Cabinet in February 2017 (taking the contract to 2021) with the option to extend for 1+1 years (to March 2023). Both extension periods had been agreed by the consortium.

Since then, additional services had benefitted from access to this contract, increasing the volume of equipment being supplied and therefore the associated value of the contract. The additional services include Special Educational Needs & Disabilities (SEND), the Paediatric Therapy Team at Whittington Health and the Community Alarm Team (CAS) which all procured their community equipment stock through this contract. In addition, there had been increased demand for community equipment from the contract during the pandemic.

This increased activity would result in there being insufficient budget reflected in the contract for the financial year 2022-23 and there was a need to increase the total contract value by £1.1 million, from £10.8 million to £11.9 million.

The Cabinet Member RESOLVED

To approve the increase in the value of the Framework with Medequip by £1.1 million for the remainder of the contract term to March 31 2023, in accordance with Contract Standing Order 10.02.1(b).

Reasons for decision

Cabinet originally approved the award of the Framework in March 2017 for the initial period of 4 years with an option to extend for 2 years at a total value of some £7.2 million. In February 2020 Cabinet approved a contract extension to March 2023, and variation to increase the contract value to £10.8 million.

Since the contract extension in February 2020, the Covid pandemic has affected all areas of life, leading to unprecedented demand for use of the community equipment service which has continued to meet the challenge. The increased demand and other factors set out below resulted in 20% higher spending through the contract by the 5 services in 2020-21, up from £1.77 million to just under £2.2 million As an example, average monthly spending through the contract increased to £177,000 in 2020/21 and has increased again to £193,000 in the first 6 months of 2021-22.

The other factors leading to increased costs include:

An increase in community equipment prices. From April 1st 2021, 520 Medequip stock items had a price increase whilst 420 remained the same. The net effect was a 2.7% price increase. The price rises were driven by large increases in raw material costs due to shortages in foam and steel.

Increased costs due to contributions to the Personal Protective Equipment (PPE) costs of Medequip technicians during the pandemic by all consortium members. This was charged at 0.82p per activity (a visit to a residents home).

The implementation of a block payment scheme, agreed across London Association of Directors of Adult Social Services in late March 2020, to assist Medequip with a potential shortfall during the pandemic in three areas, activity fees, labour repair costs, recycling fees.

1.7% increase in activity fees by Medequip from April 2021.

Increased freight/ shipping container cost charges that are forecast to continue until early 2022, some of which will potentially be passed onto boroughs, with amounts still to be determined. Average price per container increased from £2000 per container to £18,000.

Procurement costs for the new consortium tender, projected to be circa £35k per borough.

Of the £2.2 million spent in 2020-21, £855,000 (40%) was attributable to Adult Social Care spend and the remainder was recharged as follows:

·         Haringey Clinical Commissioning Group (CCG): £1,117,000 (53%)

·         Community Alarm Services: £37,000 (1.75%)

·         Special Educational Needs & Disabilities: £76,000 (3.6%)

·         Whittington Paediatric Therapies: £38,000 (1.8%)

The CCG figure of £1,117,000 represents an increase in spending of 22% from the previous financial year. Covid caused an unprecedented demand for beds and high risk pressure mattresses, which along with other equipment helped to facilitate fast hospital discharges.

Given the above figures it is expected that of the £1.1m contract variation request, £660,000 (60%) would be recharged to other services.

Alternative options considered

The London Consortium will be going out to tender for a new contract to start in April 2023. The process for re-tendering commenced in April 2021 and has involved extensive engagement and workshops with local boroughs and driven by the Consortium Management Board. Locally we have been involved from a Procurement and operational perspective. Given we are approaching the final year of a 6-year contract other options are limited at this stage.