Agenda item

The report sought agreement by Cabinet Member for Health, Social Care and Wellbeing to extend and vary the Council’s existing block contract with Magicare for the provision of 61 Nursing Beds at Priscilla Wakefield House. The extension requested was for up to two years, and the variations requested were; to allow the beds to be utilised as residential beds as required and an increase in the nursing bed price to £1,010 per week, with a temporary uplift for 2022/23 only to £1,034 per week to allow for inflation pressures.

Both the extension and the variation were allowed under CSO10.02.1(b) (variations and extensions valued at £500,000 and above to be taken by Cabinet) and CSO16.02, which provided that in-between meetings of the Cabinet, the Leader take any such decision that would normally be taken by Cabinet or may allocate this to the Cabinet Member with the relevant portfolio.

The contract was awarded by Cabinet in 2019 for an initial period of three years, to October 2022, with an option to extend for a further 2 years in 12-month intervals.

Extending and varying this contract would maintain access to local provision for older people and maintain much needed nursing and residential care capacity within the sub-region. It will also maintain certainty over price, securing sustainable prices for placements for Haringey residents.

The Cabinet Member RESOLVED 

Pursuant to CSO 10.02.1b and CSO 16.02, the extension of the existing block contract awarded to Magicare Limited for the provision of 61 nursing beds at Priscilla Wakefield House, for a further period of up to two years from 1st November 2022 subject to satisfactory outcomes of monitoring,

To increase the nursing bed price from £969.10 to £1034 per week from the 1 April 2022. The maximum contract value over the two-year extension period would be £6,693,339, bringing the total value over the five-year life of the contract to £15,757,878.

To approve the variation of the existing contract to enable beds to be utilised as residential beds (at the costs set out in para 3.8 of the report) as and when required.

Reasons for decision 

The market for nursing care was largely a sub-regional one and the Council commissioned nursing care for its residents across North Central London (Barnet, Camden, Enfield, Haringey and Islington). As with neighbouring authorities, Haringey commissioned across this area in order to meet demand and to respond to any specialist needs.

Local demand for nursing beds remained high, and although the number of Haringey residents in nursing beds decreased significantly during the Pandemic, demand was once again increasing and the local modelling indicateed a return to pre-covid levels of demand over the next few years.

In order to ensure both capacity and flexibility, the Council was keen to have a mixed economy of spot and block purchase arrangements in place for nursing beds. Many placements were commissioned on a spot purchase basis, but the proposal set out here – to continue an existing block contract – reflected the need to maintain local, quality capacity for older people, and to ensure best value in commissioning this provision. Our commissioning approach is set out in the Commissioning Strategy for Residential and Nursing Care in Haringey: 2022- 2027.

There was a very limited market in nursing beds in the local area. Priscilla Wakefield House (PWH), run by Magicare Ltd, was currently the only Care Quality Commission (CQC) registered nursing care home in the borough, and therefore considered fully local. It had a bed base of 117 Nursing beds and is currently rated ‘Good’ by the CQC, as it has been throughout this contract, with consistently good levels of quality. Additionally, Priscilla Wakefield House was linked to the Nursing Home, Care Homes Assessment Team (CHAT), working with individuals receiving long-term care, and therefore it is also anticipated that the provision of these beds will improve outcomes for patients.

Due to this unique position in the market the Council awarded a block contract under Reg 32 of the Public Contracts Regulation 2015, to Magicare for a period of 3+1+1 years in November 2019 for nursing beds at a rate of £950 per bed, with an annual uplift of 1%. The initial contract period would expire on 31st October 2022 if not extended.

The agreed unit price for nursing placements within the block agreement from 1st April 2022/23 is £1,010.21, with a temporary uplift for 2022/23 only to £1,033.66. This included the NHS uplift to FNC for 2022/23. This uplift was given in recognition of the inflationary pressures experienced by this provider which were similar to those experienced by the rest of the care home sector. The temporary uplift was based in the potential uplift for 2023/24 and should sustain the provider whilst the government’s fair cost of care exercise was completed, and the Council know its funding levels for the next 2-3 years.

The performance of the provider had been evaluated as good throughout the contract period. The contract and service provision would continue to be monitored quarterly over the next two years.

At the inception of the contract, the intention was to use all 61 block beds for nursing only, however, need and demand for these beds is variable and therefore the Council wished to vary the contract to allow the beds to be used flexibly, for general residential, but with the prior notification to the provider. As well as responding to local need, this would also support efficient move on from the Intermediate Care beds also provided by MagiCare at Priscilla Wakefield House.

It should be noted that currently not all 61 beds have been used, and therefore there should be sufficient capacity to respond to residential and nursing needs. Decisions about how to use the beds will be made on a case by case basis, based on the needs and wishes of clients and local availability at the time of placement.

The agreed unit price for new residential placements within the block contract was £888.77 per bed per week, with a temporary uplift for 2022/23 to £914.78. Any use made of the block contract for residential placements will result in a lower value contract.

The extension of this block contract reflects the desire to maintain capacity in Haringey and to ensure best value in commissioning this provision. The Council had a need to achieve savings against commissioning placement costs. As part of the approach to achieving these savings, the intention here was to secure a supply of beds for Haringey residents and protect the potential loss of supply which would result in allowing the prices to be determined solely by supply and demand from other parts of London market and capacity to be lost to other commissioning authorities.

Alternative options considered 

One alternative option was for the Council to ‘do nothing’ i.e. not extend the contract, which would see the continued reliance on spot purchases and the risk of a significant increase in expenditure over the remaining period of this contract. This would result in the Council having to pay either an increased spot rate to the provider or find alternative accommodation for the residents, which would currently be outside of Haringey, at rates which were not known, but were likely to be significantly increased and in provision which had not yet been identified. Extending the existing contract would also ensure that residents currently living in the home would not have to be moved to alternative accommodation.

A second option would be to tender for an equivalent scale block contract for the provision of a local nursing home. There was no other nursing home in the sub-region or close enough to the Haringey borders to be considered fully local. In addition, there were insufficient grounds for the Council to seek to move any resident from the provision currently delivered by Magicare Limited given their level of vulnerability and frailty.