Guidance

Adult Social Care Infection Control Fund – round 2: local authority circular

Updated 1 July 2022

Applies to England

Background

The Adult Social Care Infection Control Fund was first introduced in May 2020 and was initially worth £600 million. The purpose of this fund is to support adult social care providers, including those with whom the local authority does not have a contract, to reduce the rate of COVID-19 transmission within and between care settings, in particular by helping to reduce the need for staff movements between sites.

Due to its success in limiting the transmission of COVID-19 within and between care settings, the Adult Social Care Infection Control Fund has been extended until March 2021, with an extra £546 million of funding. This is a new grant, with revised conditions from the original Infection Control Fund. It brings the total ringfenced funding for infection prevention and control to £1.146 billion. This funding will be paid as a Section 31 grant ring fenced exclusively for actions which support care homes and CQC-regulated community care providers mainly to tackle the risk of COVID-19 infections and is in addition to funding already received.

This document is accompanied by 5 annexes (and accompanying guidance) which among other things set out the conditions upon which the grant is paid and the local authorities to whom it will be paid:

• Annex A – Extension of Adult Social Care Infection Control Fund 2 grant determination
• Annex B – Extension of Adult Social Care Infection Control Fund 2 grant allocations
• Annex C – Extension of Adult Social Care Infection Control Fund 2 grant conditions and reporting requirements
• Annex D – Extension of Adult Social Care Infection Control Fund 2 assurance statement
• Annex E – Extension of Adult Social Care Infection Control Fund 2 Local Authority Reporting Template (see Adult Social Care Infection Control Fund: round 2 to download the latest template)

Support provided to care providers by local authorities using the grant paid to them from the Adult Social Care Infection Control Fund may constitute state aid. Local authorities must comply with relevant state aid legislation when making allocations of the grant.

The Department of Health and Social Care (DHSC) considers that the measures specified in paragraph 2 of annex C are covered by the Services of General Economic Interest Decision (SGEI) 2012/21/EU. This is because the measures will help reduce the incidence and spread of COVID-19 and are over and above that which care providers would normally be expected to provide. Due to their potential to limit the transmission of COVID-19 and therefore prevent loss of life, these measures are of particular importance to care users, workers and their families, as well as being in the general public interest. Furthermore, they are not being provided by the market at the level or quality required, and thus to secure their provision, compensation needs to be provided to incentivise an undertaking or set of undertakings. Local authorities can choose to rely on this Decision to make lawful payments of the aid but must ensure they comply with its requirements.

There are 3 other options local authorities can take and which could be considered before seeking to rely upon the SGEI Decision:

1. Temporary Framework (TF) – local authorities must comply with the requirements in the TF for state aid measures to support the economy in the current COVID-19 outbreak, particularly as per Section 3.1, when it intends to provide support to a care provider which is paid for from the grant and must not provide the support if to do so means that the aid is not de minimis. Under the TF grant aid is limited to 800k Euros per undertaking. Local authorities will need to ensure that no single business receives more than 800k Euros under all measures that sit under the TF approval framework.

2. State aid is lawful if it is de minimis aid given in relation to an SGEI and made in accordance with Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty of the Functioning of European Union to de minimis aid granted to undertakings providing services of general economic interest. Broadly the aid is de minimis if in a 3-year period the undertaking has not received more than 500,000 euros of aid. This is aid from any government source, not limited to the Infection Control Fund.

3. State aid is lawful if it is de minimis state aid and is made in accordance with the Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (the Regulation). Local authorities must comply with the requirements in that regulation and particularly in paragraph 1 of Article 6 when it intends to provide support to a care provider which is paid for from the grant and must not provide the support if to do so means that the aid is not de minimis. Broadly state aid is de minimis if in a 3-year period the undertaking has not received more than 200,000 euros of aid. This is aid from any government source. Accordingly, if aid were found not to fall within the scope of the SGEI Decision or the services it supports found not to constitute services of general economic interest, it might still be exempted from notification provided it fell below the lower de minimis level provided by these general de minimis provisions (which apply to aid other than that granted in relation to an SGEI).

It is important to note that if aid is granted in reliance on either of the de minimis bases, that must be specifically stated, and the relevant legislation cited, at the time the grant is made. It is also important to ensure that the detailed rules concerning cumulation of the aid with other measures or other compensation are complied with. Local authorities will need to be particularly careful to ensure that they have identified all aid funding from other local authorities if a provider works across more than one local authority. In practice, this may make it difficult to rely upon the de minimis levels and local authorities must ensure that they take appropriate advice before doing so.

From 1 January 2021, the government has announced that the UK will no longer be bound by the EU state aid rules. A new UK-wide subsidy control regime will be introduced based on WTO subsidy rules after the end of the transition period. Guidance is expected to be published before the end of the year for public authorities.

The measures that can be compensated under the 80% and 20% funding split are detailed in annex C.

The grant

This grant will be paid in two equal instalments:

• Payment 1: 1 October 2020
• Payment 2: December 2020

Grant conditions

Pursuant to section 31(4) of the Local Government Act 2003 the Secretary of State has attached conditions to the payment of the grant, which are set out in annex C.

All funding must be used for COVID-19 infection control measures. Local authorities should pass 80% of each instalment to care homes within the local authority's geographical area on a 'per beds' basis and to CQC-regulated community care providers within the local authority's geographical area on a 'per user' basis, including to social care providers with whom the local authority does not have existing contracts. The local authority has discretion to use the remaining 20% of each instalment on other COVID-19 infection control measures, including providing support to other care settings, and wider workforce measures in relation to COVID-19 infection control.

No payments should be made unless certain conditions are met, including the local authority being satisfied that the funding will be used for infection control purposes in line with the conditions stipulated in annex A and annex C. Clawback provisions apply to this fund including that the provider must repay any amounts not used for infection control measures.

Local authorities

All local authorities will be allocated the first instalment of this funding on 1 October, according to the distributions set out in annex B. DHSC expects local authorities to transfer the first instalment to providers within twenty working days.

The payment of the second instalment of the grant is contingent on local authorities:

• having fully transferred the 80% 'per bed'/'per user' allocation of the first instalment to providers no longer than twenty working days after receipt of the funding;
• and having returned templates specifying how providers (i) have spent funding in the first month, and (ii) are intending to use the rest of the funding at reporting point 1.

In order to receive the second instalment, local authorities must also write to DHSC by 31 October, confirming that they have put in place a winter plan, and that they are working with care providers in their area on business continuity plans.

Local authorities must also have complied with any requests for further information by DHSC (in respect to this grant and the previous Infection Control Fund grant), to receive the second instalment of funding.

Providers

In order to receive funding, care providers will be required to adhere to the following requirements for the duration of the fund (until 31 March 2021):

• care homes, including homes with self-funding residents and homes run by local authorities, will be required to have completed the Capacity Tracker at least twice (that is, 2 consecutive weeks), and have committed to completing the Tracker at least once per week
• CQC-regulated community care providers, including those with exclusively self-funded clients, will be required to have completed the CQC homecare survey at least twice (that is, 2 consecutive weeks), and have committed to continuing to complete this survey (or any successor, as per government guidance) at least once per week.

To receive the second instalment of the fund, providers must have been completing the Capacity Tracker or CQC homecare survey (as per government guidance) at least once per week since they first received support from the new Infection Control Fund (which came into place on 1 October 2020).

We are aware that, at the time of issuing the grant, some community care sectors (e.g. Shared Lives) do not have access to the CQC homecare survey. In the rare circumstances where this is the case, this condition does not apply. However, such sectors will be expected to complete the survey (or any successor, as per government guidance) if and when it becomes available to them.

Distribution of funding

Allocations of funding per local authority are attached at annex B. Local authorities should prioritise passing on the 80% 'per bed'/'per user' allocation to residential and CQC-regulated community care providers. DHSC's expectation is that this should take no longer than twenty working days from receipt of the funding in a local authority.

DHSC's expectation is that the first instalment of the grant will be fully spent on the infection control measures outlined within 3 months, and the grant will be spent in its entirety by the 31 March 2021.

If at 31 March 2021 there is any underspend or DHSC is not convinced that the fund has been spent according to the grant conditions outlined in the grant determination, the Secretary of State may reduce, suspend or withhold grant payments or require the repayment of the whole or any part of the grant monies paid, as may be determined by the Secretary of State and in writing to the authority. However, DHSC will only look to recover funding where there is clear and obvious evidence that the fund has not been used in accordance with the grant conditions.

Reporting

Local authorities must distribute the money in line with this document and are required to provide monthly returns covering the information set out in annex E (see Adult Social Care Infection Control Fund: round 2 to download the latest template) and return it by the dates below. Providers will need to provide this information at least one week prior to DHSC's deadline (or as indicated by their local authority) to the following timetable:

• Reporting point 1: 23 November 2020
• Reporting point 2: 31 December 2020
• Reporting point 3: 29 January 2021
• Reporting point 4: 26 February 2021
• Reporting point 5: 31 March 2021
• Reporting point 6: 30 April 2021

Providers are also required to complete the Capacity Tracker or CQC homecare survey (as per government guidance) at least once per week until 31 March 2021.