Guidance

Local authority circular: Adult Social Care Infection Control Fund ring-fenced grant 2020

Updated 15 June 2021

1. Background

The Adult Social Care Infection Control Fund is worth £600 million. The primary 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 in and between care homes and support wider workforce resilience.

A small percentage of it may be used to support domiciliary care providers and support wider workforce resilience to deal with COVID-19 infections. This funding will be paid as a Section 31 grant ring-fenced exclusively for actions which support care homes and domiciliary 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 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 – Adult Social Care Infection Control Fund grant determination
• Annex B – Adult Social Care Infection Control Fund grant allocations
• Annex C – Adult Social Care Infection Control Fund grant conditions and reporting requirements
• Annex D – Adult Social Care Infection Control Fund assurance statement
• Annex E – Adult Social Care Infection Control Fund reporting 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.

In relation to allocations to residential care providers to implement COVID-19 infection control measures, the Department of Health and Social Care (DHSC) considers that the measures specified in paragraph [3] of Annex C are covered by the Services of General Economic Interest Decision (SGEI) 2012/21/EU 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 and are of particular importance to and are in the interest of care home residents, workers and their families and the general public.

Further, they are not being provided by the market at the level or quality required by the market, and thus to secure their provision compensation needs to be provided to 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:

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 800,000 euros per undertaking. Local authorities will need to ensure that no single care home business receives more than 800,000 euros under all measures that sit under the DHSC TF approval framework.

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 aim 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.

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 stated 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.

The measures that can be compensated under the 75% and 25% funding split are detailed in annex C.

2. The grant

This grant will be paid in 2 equal instalments:

• payment 1: May 2020
• payment 2: July 2020

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.

In order to receive the second instalment, authorities must have returned a Care Home Support Plan by 29 May 2020. Residential care providers, including homes with self-funding residents and homes run by local authorities, will also be required to have completed the Capacity Tracker at least once and committed to completing the Tracker on a consistent basis to be eligible to receive funding. The payment of the second instalment is contingent on the first being used for infection control measures and being used in its entirety.

The Department’s expectation is that the grant will be fully spent by local authorities on infection control measures of the specified kinds within 2 months of the authority receiving the second instalment. If at the end of September 2020 there is any underspend or the Department is not convinced that the authority has spent the funding 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.

Allocations of funding per local authority are attached at annex B. The funding should be prioritised for care homes and passed on as quickly as possible. We expect this to take no longer than ten working days upon receipt of the funding in a local authority.

All funding must be used for COVID-19 infection control measures. As set out in annex A and C, local authorities should pass 75% of each month’s funding to care homes within the local authority’s geographical area on a ‘per beds’ basis, including to social care providers with whom the local authority does not have existing contracts.  The local authority has the discretion to allocate the remaining 25% of that month’s funding to care homes or to domiciliary care providers and to support wider workforce resilience in relation to COVID-19 infection control. However, no payments should be made unless certain conditions are met, including the local authority being satisfied that the funding is being used for infection control purposes. Clawback provisions apply, including that the provider must repay any amounts not used for infection control measures.

3. Reporting

Local authorities must distribute the money in line with this document and complete annexes D and E and return them by the dates below.

A report in respect of the first instalment must be made to the department no later than 26 June. A second and final report in respect of both instalments must be submitted to DHSC by 30 September.