Reply To: HAs taking over leases from care providers

Alistair Costelloe

Speaking as a provider, this is an extremely common arrangement, driven by social care commissioners and endorsed by CQC, largely since the 2009 White Paper ‘Valuing People Now’.

CQC don’t simply recommend the separation of housing and care (personal care as defined) it is embedded into The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 – If a housing provider is also providing personal care to their tenants, they are, by law, providing accommodation with personal care and therefore need to be registered to do so, as a care home.

What I have seen in the sector in the last 15 years or so is a large body of care providers, often small and local, delivering supported livinggl schemes in buildings they have rented from local landlords, or purchased themselves. They receive care fees from local authorities (often many multiples of the rent) and use profits to subsidise the costs of providing the housing, because as is apparent to anybody involved in housing benefit, LHA is woefully inadequate to meet the various costs of operating supported housing in the majority of areas. This then ties the local authorities to commission care ONLY from the provider who has leased the building, because if they were to withdraw it and commission another care provider, the original one would simply unwind the scheme.

Commissioners therefore tend to dislike this arrangement because it relies on overinflated care costs to meet the housing cost, driving up their social care budgets. We have been told by commissioners at Hampshire that they want to control nominations to new schemes and will pay void cover, to prevent care providers inflating their fees to meet these obligations themselves.

My recommendation – engage with an open mind, look to understand the market forces and costs, and how this affects care providers viability, and review the applicable caselaw. MB v Wirral is the best place to start

[2013] UKUT 291 (AAC)