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 where there is a vibrant, responsive market of service providers. Local authorities play a key role in achieving 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 as a whole. This can be considered a duty to facilitate the market so that it meets the needs of all people in their 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 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 (for example housing and leisure services). Market shaping and commissioning should aim to promote a market for care and support that should be seen as broadening, supplementing and supporting all these vital sources of care and support.

2. Definitions

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 care and support needs of its local population on an ongoing basis. The information gathered through this process is then 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 the local authority has a duty to arrange in order to meet people’s needs, to agreed standards to provide value for money and deliver its commissioning strategy.

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.

Market shaping, commissioning, procurement and contracting are inter-related activities and the themes of the Care and Support Statutory Guidance apply to each to a greater or lesser extent depending on the specific activity.

3. Principles of Market Shaping and Commissioning

3.1 Focusing on outcomes

The local authority must ensure it promotes the wellbeing adults who need care and support, and their carers. It is important to understand the outcomes which matter most to people in the local area, and use this 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). 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.

Achieving better outcomes should be central to commissioning strategies and practices. Outcomes based service arrangements which are drafted using an agreed set of outcomes; either for an individual or a group of people can be useful.

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 effect on the wellbeing of people receiving care and support, and their carers, and 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).

Issues to consider when assessing the quality of services include:

• capacity;
• capability;
• timeliness;
• continuity;
• reliability;
• flexibility;
• wellbeing,

High quality services should enable people who need care and support, and their carers, to meet agreed personal outcomes, 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 agreed 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; appropriateness is a fundamental part of quality. Appropriate services will meet people’s needs and reasonable preferences.

When arranging services itself, the local authority must ensure that  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. The local authority must consider how to help foster, enhance and appropriately incentivise this vital workforce to underpin effective, high quality services. In particular, it should consider how to encourage training and development for the workforce, including for the management of care services, though, for example, national standards recommended by Skills for Care:

• care certificate;
• manager induction standards.

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 needs to understand the business environment of providers in its area, working with those 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 – for example, drawing attention to a possible reduction in home care needs, and changes in demand resulting from increasing uptake of direct payments. The Market Position Statement which the local authority publishes is 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 providers. The local authority may be the most significant purchaser of care and support in an area, and its approach to commissioning will 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, for example, by setting fee levels below an amount which is not sustainable for providers in the long term.

The local authority should have processes in place for communicating with providers in the local area to minimise risks of unexpected closures and failures.

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 if that 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, either through its own intelligence or through information from the CQC, the authority should prepare to step in to ensure continuity of care and support for people who have their care and support provided by that provider (see Managing Provider Failure and other Service Interruptions).

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 who need care and support services.

A range of different types of service provider organisations should be encouraged 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 should include:

• arrangements so 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 regular review of trends in needs, outcomes sought and achieved, and 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:

• 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 should help people with care and support needs understand and access the systems and processes involved and to make informed choices. Information and advice services should be reviewed for effectiveness using people’s experiences and feedback. This feedback forms part of the overall information a local authority considers about people’s needs and aspirations.

3.5 Co-production

Market shaping and commissioning pf 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 support local authorities to facilitate effective services in the local area area.

Market shaping and commissioning intentions should be cross-reference the Joint Strategic Needs Assessment, 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 be informed and emphasise preventative services that encourage independence and wellbeing, delaying or preventing the need for acute interventions (see also Joint Strategic Needs Assessments and Joint Local Health and Wellbeing Strategies).

Market shaping and commissioning are an integral part of understanding and delivering the whole health and care economy, and reflect the range and diversity of communities and people with specific needs, in particular:

• people needing care and support themselves (through for example, consumer research);
• 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); and
• other tiers of local government.

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.

Developing a diverse market in care and support services can boost employment and create opportunities for local economic growth, through for example, increasing employment opportunities for working age people receiving care and carers, and developing the capacity of the care workforce.

Local authorities should engage with a wide range of stakeholders and citizens in order to develop effective approaches to care and support, including through developing the JSNA and a Market Position Statement. While the duties under the Care Act fall upon local authorities, successful market shaping is a shared endeavour that requires a range of coordinated action by commissioners and providers, working together with the adult at the centre.  Local authorities should engage with stakeholders to reflect the range and diversity of communities and people with specific needs, for example:

• 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);
• wider citizens and communities including individuals and groups who are less frequently heard (for example, LGBT+ communities where there may be a lack of data on care and support needs and preferences) 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).

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, working with with commissioners for other services where appropriate) should have a clear understanding of 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.

The local authority should have robust methods to collect, analyse and extrapolate 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. This should sit alongside information about providers’ intentions to deliver support over an appropriate timescale – likely to be at least five years hence, with alignment to other strategic time frames. Data collection should include information on the quality of services provided. 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 seek to develop support to meet its needs, noting that amongst other sources, census data include information on carers and their economic activity. It should understand the trends and likely changes to the needs of carers in employment, to better plan future support.

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 should be included in engagement.

Assessment of supply and potential demand should include an awareness and understanding of current and future service provision and potential demand from outside the local authority area where this is appropriate, for example in considering services to meet highly specialised and complex needs, care and support may not be available in the local authority area, but only from a small number of specialised providers in the country. Consideration should be given to whether such services might better be commissioned and facilitated regionally.

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 with that about future supply, to understand for their whole market the implications for service delivery. Coordinating these market shaping and related activities with other neighbouring authorities may provide better outcomes.

The production of a Market Position Statement that clearly provides evidence and analysis and states the local authority’s intent can be used to encourage a continuing dialogue between a local authority, stakeholders and providers.

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 their 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), 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.

The local authority should consider with partners the enabling activities, functions and processes that may facilitate effective integrated services. These will include consideration of: joint commissioning strategies, joint funding, pooled budgets, lead commissioning, collaborative commissioning, working with potential service providers to consider innovative ways of arranging and delivering services, and making connections to public health improvement.

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

Local authorities should 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 ensuring, through contracting arrangements, that a provider is capable and competent in responding to allegations of abuse or neglect, including having robust processes in place to investigate the actions of members of staff. The local authority should be clear what information they expect from providers (for example, where there are allegations of abuse, what action the provider is taking or has taken and what the outcome is) and where providers are expected to call upon local authorities to lead a section 42 enquiry (where the management of the provider is implicated for instance), or to involve the Integrated Care Board (for health matters) or police (for example, in the case of potential crimes).

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. Contracts and contract management should manage and eliminate poor performance and quality by providers and recognise and reward excellence.

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.

The local authority may consider delegating some forms of contracting to brokers and people who use care and support to support personal choice for people who are not funded by the local authority and those taking direct payments, with appropriate systems in place to underpin the delivery of safe, effective appropriate high quality services through such routes. Where functions and activities are delegated, local authorities should ensure that appropriate elements of this statutory guidance are included in contractual conditions, for example, allowing engagement in developing Market Position Statements. Local authorities should also consider providing support to people who wish to use direct payments to help them make effective decisions through, for example, direct payment support organisations.

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)