It seems that Locality Models are very much in vogue again.
Over recent months I’ve had many conversations with Commissioners and, whilst the details for the move can vary, there are some underlying reasons;
- to provide a stable platform (through a guaranteed volume of work) for Care Providers to recruit, train and retain staff, improving market capacity
- guaranteeing provision, particularly in rural areas
- containing costs through leveraging economies of scale
- managing fewer providers makes contract management and market development easier
Whilst moving to a Locality Model, using a Fixed Framework seems like the best solution to achieving the above, I believe it’s a counterproductive approach and this is why.
Guaranteeing Care Providers a particular volume of work does not necessarily improve their ability to recruit and retain staff. Providers are still subject to the familiar pressures of losing staff to employers who offer similar (or better) rates of pay and less strenuous conditions. In fact, unless regular rate uplifts are included as part of the contract to accommodate for factors as the National Living Wage, care providers often find themselves less competitive in the local labour economy.
Locality models can act to restrict the growth of providers, by confining them to a zone within a postcode, stifling their growth. It is possible that geographic restrictions on providers can lead to them becoming more reliant on the Self-Funder Market, causing them to be less engaged with the Local Authority.
A recent report highlights how Neath Port Talbot Council’s Fixed Locality Model Framework failed to increase capacity:
“In simple terms, the fixed panel framework agreement failed through a combination of flexible market capacity, and operational constraints imposed by allocating geographical regions to specific providers. The rigid structure of the framework agreement forced the Council to implement a series of alternative arrangements to ensure sustainable delivery”.
In the current climate, fixing prices in a Framework increases the risk of providers pulling out. By their very nature, Frameworks are restrictive. If providers are not able to offer the service requirement, at the Framework rates over the full duration of the contract they will either pull out or ask for more money. If providers pull out, the slack must be taken up by the other framework providers or new providers need to be engaged on a Spot Purchased basis. In my opinion, this somewhat undermines the point of setting a Framework up in the first place, as Spot Purchased placements are usually more expensive and less regulated than their Framework equivalents. If the providers ask for more money, then any savings that might have been realised through leveraging economies of scale are undermined.
It’s difficult to argue against the premise that fewer providers are easier to manage. However, I’d suggest that if this is a serious consideration, the systems currently being used to contract manage providers and develop the market are not fit for purpose. Good systems automatically draw data from other systems and teams in the commissioning process to produce accurate management information updated in real time. These factors should enable Commissioners to manage and develop larger markets more effectively.
So, what is one effective alternative to a Fixed Framework, Locality Model?
For us, it’s a Micro Commissioning model.
This is because the crux of the argument is that with flexibility, comes sustainability.
Micro Commissioning models give providers the freedom to set prices on a case by case basis. Yes, prices will probably go up in rural areas but it will enable the agency to set agreeable rates of pay and conditions. Asking providers to compete based on their ability to meet the individual’s needs and on price ensures that offers would remain competitive, without artificially restricting price. Allowing for a natural uplift in market cost as time progresses, giving the market breathing room to operate and develop capacity. Limits on price should be put in place to ensure the rates offered won’t fall below what is safe or over what is reasonable.
By operating a Micro Commissioning model, providers can select which packages they go for, enabling them to make their own decisions regarding the rostering and travel time required. Providers naturally gravitate towards packages that they will find easiest to deliver and offer the most competitive rates. Providers will also have visibility of packages that they wouldn’t normally have access to, enabling them to grow and expand their businesses and improve capacity.
Micro Commissioning Domiciliary Care automatically requires the Local Authority to better define what it is they’re buying. This inevitably leads to better personalisation and a better service delivered to the individual. This last point goes hand in hand with a requirement for the Authority to engage more with providers, making use of technology to manage and shape a larger market in accordance with strategic objectives. Perhaps using technology again to gather feedback from individuals and their families about the quality of care they’re receiving.
In short, give the market the freedom to do what is necessary to develop capacity organically. Restricting the market with Frameworks alienates providers who do not get on and restricts market growth.
Allowing the market to grow organically, focusing on the needs of the individual with better visibility and management of service quality ensures that each individual gets the best, most appropriate care available.