1.4 Market Shaping and Commissioning of Adult Care and Support

1. Introduction

The provision of high quality, personalised care and support can only be achieved if there is a vibrant, responsive market of care providers. Local authorities have a key role to play in supporting this.

The Care Act 2014 places duties on local authorities to promote the efficient and effective operation of the market for adult care and support, so that it meets the needs of all people in the area who need care and support, whether arranged or funded by the state, by the adult themselves, or in other ways.

The market for care and support services is part of a wider system in which much of the need for care and support is met by people’s own efforts, by their families, friends or other carers, and by community networks. Local authorities also have a vital role in ensuring that universal services are available to the whole population and where necessary, tailored to meet the needs of those with additional support requirements. Market shaping and commissioning should promote a market for care and support which supplements and supports these other sources of care and support.

2. Definitions

Market shaping, commissioning, procurement and contracting are inter-related activities.

2.1 Market shaping

Market shaping is used to describe activities carried out by local authorities to:

• understand the local market of care providers; and
• encourage a diverse range of care and support services to ensure that people and their carers have choice over how their needs are met and that they are able to achieve the things that are important to them.

It is also about ensuring that the care market in the local area is stable and offers choice and variety in the way services are provided.

The core activities of market shaping are to engage with stakeholders to develop an understanding of supply and demand and likely trends that reflect people’s needs and aspirations. It should be based on evidence to identify the types of services needed now and in the future.

2.2 Commissioning

Commissioning is the process by which health and care services are planned, purchased and monitored. It aims to improve the lives of local people. Adult social care commissioning involves the local authority assessing the needs of its local population on an ongoing basis. The information gathered through this process is used to determine which services will need to be delivered, and then designing, delivering, monitoring and evaluating these to ensure appropriate outcomes.

2.3 Procurement

Procurement is the specific function carried out by the local authority to buy or acquire the services it has a duty to arrange in order to meet people’s needs.

2.4 Contracting

Contracting is the means by which that process is made legally binding. Contract management is the process that ensures that the services continue to be delivered to the agreed quality standards.

3. Principles of Market Shaping and Commissioning

3.1 Focusing on outcomes

The local authority must ensure it promotes the wellbeing of adults who need care and support, and their carers. To do this, it is important to understand the outcomes which matter most to people in the local area, and use this information when planning strategies for delivering care and support. Outcomes should be considered both in terms of outcomes for individuals and outcomes for groups of people and populations.

The Adult Social Care Outcomes Framework (ASCOF) can be used alongside locally collected information on outcomes and experiences (see also Measuring Outcomes in Adult Social Care chapter).

Making It Real sets out what good personalised care and support should look like from the perspective of people with care and support needs, carers and family members and is a useful way to measure how well services are performing.

3.2 Promoting quality

The local authority must facilitate markets that offer a diverse range of high quality and appropriate services.

The quality of services provided and the workforce providing them can have a significant impact on the wellbeing of people receiving care and support, and their carers. It is important to use clear criteria to describe what good services look like and how they will provide care (see also Care Quality Commission Quality Statements).

High quality services should enable people who need care and support, and carers, to meet appropriate personal outcome measures, for example, a domiciliary care service which provides care two days a week so that a carer who normally provides care can go to work, is not a quality service if it is not available on the specified days, or the care workers do not arrive in time to allow the carer to get to work.

Local authorities should encourage a wide range of service provision to ensure that people have a choice of appropriate services which will meet their needs and reasonable preferences.

When arranging services itself, the local authority must ensure its commissioning practices and the services delivered on its behalf comply with the requirements of the Equality Act 2010, and do not discriminate against people with protected characteristics.

When services are commissioned it is important to have regard to cost effectiveness and value for money.

People working in the care sector are key to the provision of high quality services. Local authorities have a role to play in promoting training and development for the workforce, including for the management of care services.

When commissioning services, the local authority should request evidence that service providers employ staff who are paid at a level that enables them to retain an effective workforce. Pay must be at least sufficient to comply with the national minimum wage legislation for hourly pay or equivalent salary. This will include appropriate remuneration for any time spent travelling between appointments.

Local authorities should also request evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide quality delivery of the agreed care packages.

3.3 Supporting sustainability

The local authority has an important role in ensuring that the overall provision of services can meet expected needs. This will ensure there are a range of appropriate and high quality providers and services from which people can choose.

The local authority will need to understand the business environment providers are operating in, and work with those which are facing challenges. Where needed, the local authority should encourage service providers to adjust the extent and types of service provision. This could include signalling to the market as a whole the likely need to extend or expand services, encourage new entrants to the market in the area, or if appropriate, signal likely decrease in needs. The Market Position Statement which local authorities publish should be central to this process.

The local authority should also consider the impact of its own activities on the market as a whole, in particular the way its commissioning and re-commissioning decisions can impact on providers. The local authority may be the most significant purchaser of care and support in an area, and its approach to commissioning will therefore have an impact beyond those services with which it contracts. It must not undertake any actions which may threaten the sustainability of the local market as a whole.

Where the local authority believes there is a significant risk to a provider’s financial viability, it should consider what assistance may be provided or brokered to help the provider return to viability, and consider what actions might be needed it the provider were to fail. For example, where a local authority has arranged services for adults with a provider that appears to be at risk, it should undertake early planning to identify potential replacement service capacity. Where it is apparent to a local authority that a provider is likely to imminently fail financially, it should prepare to step in to ensure continuity of care and support for people who are receiving care and support from that provider (see Managing Provider Failure and other Service Interruptions chapter).

3.4 Ensuring choice

The local authority must encourage a variety of different providers and different types of services. This is important in order to provide genuine choice to meet the range of needs and reasonable preferences of local people.

Encouraging a range of different types of service provider organisations helps to ensure people have a genuine choice of different types of service. This will include independent private providers, third sector, voluntary and community based organisations, including user-led organisations, mutual and small businesses.

Choice for people who need care and support and carers should be interpreted widely, and include;

• arrangements which mean that care can be shared between an unpaid carer or relative and a paid care worker;
• choice over when a service is delivered;
• choice over who takes on the role of key care worker;
• encouraging providers to collaborate to ensure the right provision is available, for example, a private provider and a voluntary organisation working together.

The local authority must have regard to ensuring a sufficiency of provision – in terms of both capacity and capability – to meet anticipated needs for all people in its area needing care and support – regardless of how they are funded. This requires regularly reviewing trends in needs and outcomes sought and achieved, as well as trends in supply.

When reviewing the sufficiency and diversity of service provision, all types of service that are required to provide care and support for the local authority’s whole population should be considered, including for example:

• support services and universal and community services that promote prevention;
• domiciliary (home) care;
• homes and other types of accommodation care;
• nursing care;
• live-in care services;
• specialist care;
• support for carers;
• reablement services;
• sheltered accommodation and supported living;
• shared lives services;
• other housing options;
• community support;
• counselling;
• social work;
• information, brokerage, advocacy and advice services;
• direct payment support organisations.

Care and support services should be personalised so that adults can make meaningful choices and take control of their support arrangements, regardless of service setting or how their personal budget is managed. Personalised care and support services should be flexible to ensure people have choices over what they are supported with, when and how their support is provided and wherever possible, by whom.

Local authorities must provide information and advice to support people’s choices for care and support. This helps people with care and support needs understand and access the systems and processes involved and to make informed choices.

3.5 Co-production with stakeholders

Market shaping and commissioning of care and support should be shared endeavours, with commissioners working alongside people with care and support needs, carers, family members, care providers, representatives of care workers, relevant voluntary, user and other support organisations and the public to find shared and agreed solutions (see also Involving People who Use Services / Co-production).

3.6 Developing local strategies

Commissioning and market shaping enable local authorities to facilitate effective services in their area.

Market shaping and commissioning should reference the Joint Strategic Needs Assessment (JSNA), and should be informed by an understanding of the needs and aspirations of the population and how services will adapt to meet them. Strategies should emphasise preventative services that encourage independence and wellbeing and delaying or preventing the need for acute interventions (see also Joint Strategic Needs Assessments and Joint Local Health and Wellbeing Strategies chapter).

Market shaping and commissioning should reflect the range and diversity of communities and people with specific needs, in particular:

• people needing care and support themselves;
• carers;
• carer support organisations;
• health professionals;
• care and support managers and social workers (and representative organisations for these groups);
• relevant voluntary, user and other support organisations;
• independent advocates;
• wider citizens;
• provider organisations (including where appropriate housing providers).

Strategies related to care and support should be reviewed with stakeholders to ensure they remain fit for purpose, learn lessons, and adapt to incorporate emerging best practice.

Local authorities should engage with a wide range of stakeholders and local residents in order to develop effective approaches to care and support, including through developing the JSNA and a Market Position Statement. Local authorities should engage stakeholders to reflect the range and diversity of communities and people with specific needs, including:

• people needing care and support themselves and their representative organisations;
• carers and their representative organisations;
• health professionals;
• social care managers and social workers;
• independent advocates;
• support organisations that help people who need care consider choices (including financial options);
• provider organisations (including where appropriate housing providers and registered social landlords);
• individuals and groups who are less frequently heard (for example, LGBTQ+ communities) or at risk from exclusion, including those who have communication issues and involving representatives of those who lack mental capacity.

Engagement with people needing care and support, people likely to need care and support, carers, independent advocates, families and friends, should emphasise understanding the needs of individuals and specific communities, what aspirations people have, what outcomes they would like to achieve, their views on existing services and how they would like services to be delivered in the future. It should also seek to identify the types of support and resources or facilities available in the local community which may be relevant for meeting care and support needs, to help understand and build community capacity to reinforce the more formal, regulated provider market.

Engagement with service providers should seek to understand the organisation’s strategies, risks, plans, and encourage building trusting relationships and fostering improvement and innovation to better meet the needs of people in the area.

Providers should have clear routes to register concerns or complaints about engagement and commissioning activities (see Complaints chapter).

4. Undertaking Market Shaping and Commissioning

4.1 Understanding the market

The local authority must understand local markets and develop knowledge of current and future needs for care and support services. This is important so that the authority can articulate likely trends in needs and signal to the market the likely future demand for different types of services for its market as a whole, and understand the local business environment, to support effective commissioning.

The local authority (through an engagement process and working with commissioners for other services where appropriate) should be able to understand and report on the characteristics of current and future needs for services. This should include reference to demographics, drivers and trends, the aspirations, priorities and preferences of those who will need care and support, their families and carers, and the changing care and support needs of people as they progress through their lives. This should include an understanding of:

• people with existing care needs drawn from assessment records;
• carers with existing care needs drawn from carers’ assessment records;
• new care and support needs;
• those whose care and support needs will transition from young people’s services to adult services;
• those transitioning from working-age adults to services for older people;
• people whose care and support needs may fluctuate;
• people moving to higher needs and specialised care and support; and
• those that will no longer need care and support.

Local authorities should have in place robust methods to collect and analyse this information about care and support needs, including as appropriate information about specific conditions (for example, neurological conditions such as Stroke, Parkinson’s, Motor Neurone Disease), and multiple and complex needs.

Data collection should include information on the quality of services. This could include, for example, collecting and acting on feedback from people who receive care, their families and carers alongside information on the specific nature of the services people receive (e.g. regularity and length of homecare visits).

The local authority should also seek to understand trends and changes to the levels of support that are provided by carers, and develop support to meet the needs of carers and the people they care for.

In order to understand future trends in needs and demands, the local authority should include an understanding of people who are or are likely to be both wholly or partly state funded, and people who are or are likely to be self-funding. It should also include an analysis of those self-funders who are likely to move to state funding in the future.

The understanding of needs should also include an understanding of the likely demand for state funded services that the local authority will need to commission directly, and state funded services likely to be provided through direct payments and require individuals to ‘micro-commission’ services. The local authority should also consider the extent to which people receiving services funded by the state may wish to ‘top up’ their provision to receive extra services or premium services; that is, the assessment of likely demand should be for services that people are likely to need and be prepared to pay for through top ups.

In order to gather the necessary information to shape its market, the local authority should engage with providers (including the local authority itself if it directly provides services) to seek to understand and model current and future levels of service provision supply, the potential for change in supply, and opportunities for change in the types of services provided and innovation possible to deliver better quality services and greater value for money. It should understand the characteristics of providers’ businesses, their business models, market concentration, investment plans etc. Information about both supply and expected demand for services should be made available publicly to help facilitate the market and empower communities and citizens when considering care and support. Smaller care providers will be included in engagement.

4.2 Facilitating the development of the market

The local authority should collaborate with stakeholders and providers to analyse information about needs and demands for care and support and the the implications for service delivery. Coordinating these market shaping and related activities with other neighbouring authorities can be helpful.

The Market Position Statement should contain information on: the local authority’s direction of travel and policy intent, key information and statistics on needs, demand and trends, (including for specialised services, personalisation, integration, housing, community services, information services and advocacy, and carers’ services), information from consumer research and other sources about people’s needs and wants, information to put the authority’s needs in a national context, an indication of current and future authority resourcing and financial forecasts, a summary of supply and demand, the authority’s ambitions for quality improvements and new types of services and innovations, and details or cross-references to the local authority’s own commissioning intentions, strategies and practices.

4.3 Promoting integration with local partners

The local authority has a duty to carry out its care and support functions with the aim of integrating services with those provided by the NHS or other health-related services, such as housing.

It should also consider working with appropriate partners to develop integration with services related to care and support such as housing, employment services, transport, benefits and leisure services. Local authorities should prioritise integration activity in areas where there is evidence that effective integration of services materially improves people’s wellbeing, for example, end of life care (see End of Life Care chapter), and should take account of the key national and local priorities and objectives of the Better Care Fund, for example, stopping people reaching crisis and reducing the emergency admissions to hospitals.

4.4 Securing supply in the market and assuring its quality and value for money through contracting

Local authorities should consider promote the optimal use of resources to achieve intended outcomes; this will not always be the lowest cost but must also consider the quality of service delivered and the outcomes achieved for people’s wellbeing.

Commissioning and procurement practices must deliver services that meet the requirements of the Care Act and all related statutory guidance.

4.5 Preventing abuse and neglect

When commissioning services, the local authority should ensure that providers have clear arrangements in place to prevent abuse or neglect. This should include assuring itself, through its contracting arrangements, that a provider is capable and competent in responding to allegations of abuse or neglect, and has robust processes in place to investigate the actions of members of staff.

4.6 Financial sustainability

When commissioning services, the local authority should undertake due diligence about the financial sustainability and effectiveness of potential providers to deliver services to agreed criteria for quality.

Contracts should incentivise value for money, sustainability, innovation and continuous improvement in quality and actively reward improvement and added social value.

All services delivered should adhere to national quality standards, with procedures in place to assure quality, safeguarding, consider complaints and commendations, and continuing value for money, referencing the Care Quality Commission (CQC) quality statements.

5. Further Reading

5.1 Relevant chapter

Promoting Wellbeing

5.2 Relevant information

Chapter 4, Market Shaping and Commissioning of Adult Care and Support, Care and Support Statutory Guidance (Department of Health and Social Care)

Adult social care market shaping (Department of Health and Social Care)