Local authorities have a duty under the Care Act 2014 to shape social care markets and a requirement to support ‘personalisation’. Through a realist literature review, secondary data analysis, a local authority survey, national stakeholder interviews, an economic evaluation and case study fieldwork in eight local authorities the research found:
- Effective market shaping by local authorities is seen by national and local stakeholders as a prerequisite for achieving personalisation. Working well with providers and communities can be a way for local authorities to develop stable markets and is also essential for stimulating the innovation and diversity that underpin personalised outcomes.
- The terms ‘market shaping’ and ‘personalisation’ lack a fxed meaning. Respondents talked about the interaction of two variables: rules (eg, tenders, contracts, monitoring) and relationships (between local authorities, providers and other local stakeholders).
- From the national interviews, four types of local authority market shaping were identifed depending on the extent of local authority control (rules) and the nature of relationships with local stakeholders:
1. open market (low control, distant relationships)
2. partnership (low control, close relationships)
3. procurement (high control, distant relationships)
4. managed market (high control, close relationships)
- In the open market model, local authorities encourage maximum diversity of providers, and support individuals and families to fnd the best ft for care and support. In the partnership model, local authorities work closely with a smaller number of providers to co-design support that is innovative and supports personalised outcomes. Respondents associated these two types of rule/relationship confgurations with theaims of the Care Act. The procurement and managed market models, in contrast, are more rule-driven and likely to limit scope for diversity and innovation. They were seen by respondents as attempts by local authorities to minimise risk and stabilise the system, in response to rising demand and fscal pressures rather than a response to the Care Act.
- The eight local case sites were using a combination of the four models in different sub-markets. Older people’s services were most likely to be ‘high control’ (ie, procurement or managed markets), whereas support for working age adults was most likely to be ‘low control’ (open market or partnership).
- Sites were drifting between the four models over time, often without purposively choosing one over another or recognising their interdependence. High turnover of local authority staff, workforce shortages within providers and long-term funding uncertainty militated against a coherent approach.
- The local site research enabled us to identify the conditions in which open market and partnership approaches are likely to fourish. Effective combination of the open market and partnership approaches require different offers to different parts of the market, to give providers incentives to innovate either to: (a) meet the needs of individual service users (including self-funders) in the open market; or (b) to develop partnerships for the long-term in ways that share risk and enable co-design with providers and communities. Both are needed in local care markets.
- Partnership models are best pursued in an iterative way to build trust, enable providers, service users, families and communities to adapt, and to facilitate joint working with health and housing. Open markets already exist in many areas but are fragile and need active local authority facilitation to work effectively.
Local authority commissioners need nationally funded support to build technical and relational capabilities, in order to:
- Stimulate open market and partnership approaches, with different offers to different parts of the market.
- Develop partnership models through forms of commissioning that foster trust, learning and long-term investment, and allow providers and communities to be part of a co-design process.
- Facilitate open market approaches through stimulating diverse providers and personal assistants, and helping to work with people using services (including self-funders), maximising fexibility and innovation and ensuring local quality assurance processes are proportionate to the level of risk involved.
National government needs to:
- Develop a sustainable funding settlement for social care, moving beyond short-term allocations that inhibit effective planning and partnerships.
- Address shortages in the care workforce, which local authorities and providers cannot resolve locally.
- Ensure the regulatory system is proportionate and responsive to both open market and partnership approaches, balancing risk with the fexibility necessary to achieve personalisation.