Transparency of care services, what’s included and what’s not, what it costs and so on, has to be a good thing, for those using those services and for the local authorities contracting with the providers for the provision of those services. And in some ways, care providers are already opening their books to contracting authorities, in terms of justifying the service user needs that must be met and agreeing funding for this. However, this article seems to suggest taking that transparency a step further and showing the authorities the bottom line operating costs of the whole business.

It’s reasonable to anticipate a degree of reluctance from care providers to engage with this suggested approach, not least because it exposes them, to an even greater extent, to having their business needs dictated by the authority and potentially, to their margins being squeezed even further.

Many authorities across the country have allegedly damaged the establishment of a culture of trust between themselves and care providers, for example by reportedly flatly refusing to increase funding to providers in spite of changes in the law regarding sleep-in shifts, travel time and the introduction of the national living wage. All of these developments have increased the costs to providers of providing care.

For this suggestion to work there would have to be a substantial build up of trust between providers and contracting authorities. As part of that exercise, authorities would have to demonstrate that they recognise the right (and need) of the care providing business not only to cover overheads, but also to make a reasonable profit on top. Even in the not for profit sector, it is vital that some surplus funding is generated year on year to cater for unforeseen events and to permit future investment.

You only have to look at the example of Kids Company to see the risks that any operation takes if it does not have the requisite level of operating reserves.

In many ways, the approach suggested by ADASS in the article below is a refreshing and welcome one. It makes sense for authorities and care providers to work more closely together to find efficient and effective ways of providing care and ensuring that care providers remain in business. However, there will need to be a substantial investment in building trust before this could become a reality.

You're on our blog and updates site, which is hosted by elXtr. elXtr is a leading digital hub powered by the award-winning lawyers at LHS Solicitors LLP, bringing you real law, made easy. Find out more about elXtr here. Law for the online generation starts here.