Grant determination and conditions 2022 to 2023
Updated 27 September 2024
Applies to England
© Crown copyright 2024
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The following is the final grant determination and conditions for the Market Sustainability and Fair Cost of Care Fund, as circulated to all local authorities by the Department for Levelling Up Communities in April 2022. This includes allocations to local authorities for 2022 to 2023, which were issued alongside the Final local government finance settlement for 2022 to 2023.
Following an announcement by the Chancellor of the Exchequer on 29 July 2024, the planned adult social care charging reforms, which were inherited from the previous government, will not be taken forward in October 2025.
Market Sustainability and Fair Cost of Care Fund – Grant Determination and Conditions 2022 to 2023: No 31/6094
The Minister of State for Levelling Up Communities (“the Minister of State”), in exercise of the powers conferred by section 31 of the Local Government Act 2003, makes the following determination:
Citation
1. This determination may be cited as the Market Sustainability and Fair Cost of Care Fund Grant Determination 2022 to 2023 [31/6094].
Purpose of the grant
2. The purpose of this grant is to support local authorities to prepare their markets for reform of the adult social care system, including the further commencement of Section 18(3) of the Care Act 2014 in October 2023, and to support local authorities to move towards paying providers a fair cost of care.
3. Where average fee rates are below the fair cost of care, local authorities should use this additional funding to increase fee rates paid to providers (in respect of residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over, including those who operate in extra care settings) beyond the level required to cover increases in core costs such as inflation, workforce pressures, National Living Wage, and National Insurance. A proportion of the funding, set out in Annex B, may be spent on implementation activities associated with preparing care markets for reform.
Determination
4. The Minister of State determines as the authorities to which grant is to be paid and the amount of grant to be paid, the authorities and amounts which are set out in Annex A.
5. The grant will be paid in monthly instalments.
Grant conditions
6. Pursuant to section 31(4) of the Local Government Act 2003, the Minister of State determines that grants from the Market Sustainability and Fair Cost of Care Fund for 2022 to 2023 will be paid subject to local authorities meeting the conditions specified in Annex B.
7. None of the funding provided is to be used for any purpose other than that specified above.
Treasury consent
8. Before making this determination in relation to local authorities in England, the Minister of State obtained the consent of the Treasury.
Signed by authority of the Minister of State for Levelling Up Communities.
Deputy Director, Department for Levelling Up, Housing and Communities
Annex A: Market Sustainability and Fair Cost of Care Fund allocations to local authorities 2022 to 2023
| Local authority | Market Sustainability and Fair Cost of Care Fund allocation 2022 to 2023 |
|---|---|
| Barking and Dagenham | £616,316 |
| Barnet | £977,055 |
| Barnsley | £835,921 |
| Bath and North East Somerset | £492,583 |
| Bedford | £419,048 |
| Bexley | £626,653 |
| Birmingham | £3,780,199 |
| Blackburn with Darwen | £515,981 |
| Blackpool | £609,987 |
| Bolton | £938,319 |
| Bournemouth, Christchurch and Poole | £1,181,178 |
| Bracknell Forest | £244,239 |
| Bradford | £1,550,616 |
| Brent | £906,550 |
| Brighton and Hove | £829,346 |
| Bristol | £1,369,147 |
| Bromley | £803,557 |
| Buckinghamshire Council | £1,128,140 |
| Bury | £551,280 |
| Calderdale | £621,416 |
| Cambridgeshire | £1,568,738 |
| Camden | £867,889 |
| Central Bedfordshire | £584,531 |
| Cheshire East | £979,180 |
| Cheshire West and Chester | £990,373 |
| City of London | £32,934 |
| Cornwall | £1,885,534 |
| Coventry | £1,046,967 |
| Croydon | £945,904 |
| Cumbria | £1,692,375 |
| Darlington | £338,291 |
| Derby | £775,284 |
| Derbyshire | £2,448,432 |
| Devon | £2,413,484 |
| Doncaster | £1,019,169 |
| Dorset Council | £1,152,060 |
| Dudley | £1,054,094 |
| Durham | £1,905,104 |
| Ealing | £956,859 |
| East Riding of Yorkshire | £976,029 |
| East Sussex | £1,745,314 |
| Enfield | £876,579 |
| Essex | £3,995,659 |
| Gateshead | £764,967 |
| Gloucestershire | £1,707,739 |
| Greenwich | £897,937 |
| Hackney | £948,377 |
| Halton | £431,414 |
| Hammersmith and Fulham | £619,907 |
| Hampshire | £3,209,285 |
| Haringey | £775,037 |
| Harrow | £654,634 |
| Hartlepool | £338,258 |
| Havering | £678,836 |
| Herefordshire | £594,414 |
| Hertfordshire | £2,790,730 |
| Hillingdon | £702,748 |
| Hounslow | £674,556 |
| Isle of Wight | £517,330 |
| Isles of Scilly | £8,546 |
| Islington | £867,975 |
| Kensington and Chelsea | £585,094 |
| Kent | £4,160,993 |
| Kingston upon Hull | £980,737 |
| Kingston upon Thames | £386,896 |
| Kirklees | £1,255,420 |
| Knowsley | £659,513 |
| Lambeth | £1,018,518 |
| Lancashire | £3,724,752 |
| Leeds | £2,234,742 |
| Leicester | £1,062,273 |
| Leicestershire | £1,629,617 |
| Lewisham | £923,320 |
| Lincolnshire | £2,273,366 |
| Liverpool | £1,996,048 |
| Luton | £531,984 |
| Manchester | £1,799,584 |
| Medway | £673,563 |
| Merton | £504,839 |
| Middlesbrough | £511,608 |
| Milton Keynes | £612,953 |
| Newcastle upon Tyne | £1,013,061 |
| Newham | £991,179 |
| Norfolk | £2,820,608 |
| North East Lincolnshire | £526,304 |
| North Lincolnshire | £513,620 |
| North Northamptonshire | £851,913 |
| North Somerset | £623,663 |
| North Tyneside | £695,977 |
| North Yorkshire | £1,635,931 |
| Northumberland | £1,026,980 |
| Nottingham | £1,046,269 |
| Nottinghamshire | £2,380,772 |
| Oldham | £757,589 |
| Oxfordshire | £1,546,799 |
| Peterborough | £535,721 |
| Plymouth | £866,771 |
| Portsmouth | £601,032 |
| Reading | £384,414 |
| Redbridge | £753,284 |
| Redcar and Cleveland | £486,152 |
| Richmond upon Thames | £446,068 |
| Rochdale | £748,142 |
| Rotherham | £908,069 |
| Rutland | £91,611 |
| Salford | £889,426 |
| Sandwell | £1,247,351 |
| Sefton | £1,029,298 |
| Sheffield | £1,826,053 |
| Shropshire | £940,831 |
| Slough | £347,931 |
| Solihull | £587,490 |
| Somerset | £1,685,858 |
| South Gloucestershire | £631,156 |
| South Tyneside | £617,801 |
| Southampton | £748,836 |
| Southend-on-Sea | £556,200 |
| Southwark | £1,060,187 |
| St. Helens | £649,928 |
| Staffordshire | £2,390,826 |
| Stockport | £866,170 |
| Stockton-on-Tees | £570,536 |
| Stoke-on-Trent | £899,030 |
| Suffolk | £2,201,444 |
| Sunderland | £1,058,250 |
| Surrey | £2,696,380 |
| Sutton | £497,666 |
| Swindon | £519,247 |
| Tameside | £778,974 |
| Telford and Wrekin | £522,646 |
| Thurrock | £441,588 |
| Torbay | £559,291 |
| Tower Hamlets | £988,851 |
| Trafford | £638,351 |
| Wakefield | £1,112,991 |
| Walsall | £966,482 |
| Waltham Forest | £734,867 |
| Wandsworth | £875,783 |
| Warrington | £556,023 |
| Warwickshire | £1,508,344 |
| West Berkshire | £338,106 |
| West Northamptonshire | £982,135 |
| West Sussex | £2,229,830 |
| Westminster | £893,132 |
| Wigan | £1,074,750 |
| Wiltshire | £1,230,568 |
| Windsor and Maidenhead | £321,609 |
| Wirral | £1,215,250 |
| Wokingham | £271,073 |
| Wolverhampton | £929,122 |
| Worcestershire | £1,609,622 |
| York | £493,965 |
| Total | £162,000,000 |
Note: funding is being paid to local authorities with responsibility for adult social care only.
Annex B: grant conditions
In this determination:
- “a recipient authority” means a local authority listed in Annex A of this determination
- “the Minister of State” means the Minister of State for Levelling Up Communities
- “grant” means the amounts set out in Annex A for each authority
- “cost of care exercise” means a process of engagement between local authorities, commissioners and providers, data collection and analysis by means of which local authorities and care providers can arrive at a shared understanding of the local costs of providing care. The cost of care exercise will help local authorities identify the lower quartile, median and upper quartile costs in the local area for a series of care categories
- “cost of care” means the actual cost/s a provider incurs in delivering care at the point in time that the exercise is undertaken. It is typically presented as a unit cost for an hour of domiciliary care or a bed per week in a care home
- “rate” means the rate, determined and paid by a local authority to providers for care and support services
- “fair cost of care” means, for the reporting purposes for this fund, and in terms of understanding the cost of care, the median actual operating costs for providing care in the local area (following completion of a cost of care exercise) for a series of care categories. This must include and evidence values for return on capital and return on operations. Together, this is what is described as the “fair cost of care” and is, on average, what local authorities are required to move towards paying providers
- “Market Sustainability Plan” means a written assessment of the current rates the local authority pays for care, the impact this is having on the market and the potential future risks in the local market, particularly in the context of adult social care reform and the further commencement of Section 18(3) of the Care Act 2014. This plan will also need to outline mitigating actions for managing these risks and developing a more sustainable market
Use of the grant
- Up to 25% of the funding in 2022 to 23 may be spent on implementation activities associated with preparing markets for reform, including:
a. Strengthening internal commissioning and contract management capacity or procuring external resource to undertake the work associated with these grant conditions, and to respond to the need for greater market oversight as a result of increased section 18(3) of the Care Act 2014 commissioning (this does not include the cost of undertaking additional assessments) and/or to increase provider oversight to ensure poor market practices are being addressed.
b. Conducting cost of care exercises for residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over.
c. Engaging with providers, for the purpose of both the cost of care exercise and Market Sustainability Plan, to better understand the potential impact of reform on the local market. This may include working with local provider associations or third sector organisations to financially support local capacity, where appropriate.
d. Developing and executing a Market Sustainability Plan.
2. The list set out above is not intended to be exhaustive but is intended to guide recipient authorities as to the types of activities which the Government considers recipient authorities should prioritise in order to meet the grant conditions. Recipient authorities should determine for themselves whether particular activities not listed are broadly similar in nature to those above, provided they relate to the overall objectives for the funding listed in paragraph 1.
3. The remaining seventy-five per cent of the funding, or where a recipient authority incurs implementation costs amounting to less than twenty-five per cent of their allocation, must be used to increase rates if its rates are below the fair cost of care (in respect of residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over, including those who operate in extra care settings).
4. The Department of Health and Social Care will make available guidance, templates and wider, ongoing support to help local authorities meet the grant conditions and achieve the purpose of the funding, as set out in paragraphs 2 and 3 of the grant determination.
5. Local authorities will need to provide evidence that funding has been used for the purpose set out in this grant determination, as part of the reporting requirements in paragraph 9 below.
6. Any amount of funding from the grant not spent on the above measures must be returned by recipient authorities to the Minister of State.
Payment arrangements
7. Grants will be paid in monthly instalments.
8. Funding from the grant must be spent within the designated financial year. If any funding from the grant is not spent within the designated financial year, the Secretary of State may require repayment of the grant monies paid, as may be determined by the Secretary of State and notified in writing to the authority.
Reporting requirements for local authorities
9. As a condition of the funding and to be eligible to receive further funding in financial years 2023 to 2024 and 2024 to 2025, local authorities must provide evidence of the following to the Department of Health and Social Care:
a. Cost of care exercises for residential and nursing care for those aged 65 and over, and domiciliary care for those aged 18 and over. Exercises will need to accurately reflect local costs such as staff pay and travel time. They will also need to provide and evidence an appropriate return on capital in residential and nursing care, and return on operations in both residential and nursing care, and domiciliary care. Local authorities will need to provide both a cost of care data return and report. The key content of a cost of care report and a template for data returns can be found in the Market Sustainability and Fair Cost of Care guidance. Use of these is mandatory as part of an acceptable return. Recipient authorities will be required to publish the cost of care report pending review and notification to do so from the Department of Health and Social Care, on their own website.
b. A provisional Market Sustainability Plan. Using the cost of care exercise as a key input, this plan will identify key risks to the local care market, with particular consideration given to the further commencement of Section 18(3) of the Care Act 2014. The plan should outline mitigating actions, including the pace at which the local authority intends to move towards the fair cost of care, where it is not being paid already, to improve the sustainability of the residential and nursing care market for those aged 65 and over, and the domiciliary care market for those aged 18 and over. A template is available in the Fund guidance and its use is mandatory as part of an acceptable return.
c. A spend return detailing how Market Sustainability and Fair Cost of Care funding allocated for year one is being spent in line with the stated purpose.
10. The returns outlined in paragraph 9a, b and c must be submitted to the Department of Health and Social Care by 14 October 2022. Please note, it is the provisional Market Sustainability Plan which must be submitted by this deadline, not the final plan. The contact details for submitting these returns are: marketsreform@dhsc.gov.uk. The Department of Health and Social Care reserves the right to update the means by which returns are submitted, and may provide alternatives in future, including a web-based system for greater efficiency.
11. Final spend reports must be approved by the local authority’s chief executive or s151 officer.
12. A final Market Sustainability Plan, outlining how funding in years two and three of the grant (2023 to 2024 and 2024 to 2025) will be spent in line with key actions set out, will be expected in February 2023, after local government budgets have been finalised for 2023 to 2024. Recipient authorities will be required to publish these, with commercially sensitive information redacted, following review and pending notification to do so from the Department of Health and Social Care.
13. Notwithstanding paragraph 16 below, where cost of care exercises or Market Sustainability Plans are returned to the Department of Health and Social Care:
a. Incomplete
b. Do not contain the required level of evidence and detail (as set out in the Market Sustainability and Fair Cost of Care guidance)
c. Extremely inconsistent with returns from authorities with similar markets
d. Late, or not returned at all
Officials from the Department of Health and Social Care may agree to engage with the local authority to understand what additional support may be required to meet the grant conditions. This may include asking the local authority to provide more data, repeat exercises, or work with a neighbouring authority with a similar market to ascertain the reason for any discrepancies. Should the local authority remain unable to submit an acceptable return, future funding from the grant will be withheld.
Financial management
14. A recipient authority must maintain a sound system of internal financial controls.
15. If a recipient authority has any grounds for suspecting financial irregularity in the use of any grant paid under this funding agreement, it must notify the Department immediately, explain what steps are being taken to investigate the suspicion and keep the Department informed about the progress of the investigation. For these purposes “financial irregularity” includes fraud or other impropriety, mismanagement, and the use of grant for purposes other than those for which it was provided.
Breach of conditions and withholding future funding
16. If the recipient authority fails to comply with any of these conditions, or if any overpayment is made under this grant, or any amount is paid in error, or any unspent funding is not returned, the Minister of State may reduce, suspend or withhold Market Sustainability and Fair Cost of Care Fund payments in 2023 to 2024 and 2024 to 2025 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 notified in writing to the authority. Such sum as has been notified will immediately become repayable to the Secretary of State who may offset the sum against any future amount due to the recipient authority from central government.
17. The list below contains examples of a breach of the grant conditions:
a. Inappropriate use of funding, or no evidence of funding having been spent on the specified purpose
b. Failure to submit one or more of the documents as specified in paragraphs 9a-c and/or submission of incomplete documents
c. Non-engagement with the support made available or requests for further information as set out in paragraph 13
d. A provisional Market Sustainability Plan, and part one data return that do not demonstrate a considered analysis of the recipient authority’s local care market
e. A part two data return and final market sustainability plan that does not demonstrate how funding will be used to support recipient authorities to move towards the fair cost of care identified in their cost of care exercise
f. A provisional and final Market Sustainability Plan that does not include a clear strategy to prepare the local market for upcoming reforms to the adult social care market, thereby not using the funding for its intended purpose.