Written evidence submitted by Bupa Care Services [ASC 071]



  1. This submission from Bupa Care Services responds to the HCLG Committee’s call for written evidence as part of its inquiry into social care funding.


  1. Bupa Care Services is a business within Bupa Global & UK. Bupa Global & UK employs 23,000 people in the UK supporting 5 million customers with their health, care and wellbeing needs. Bupa Care Services employs around 11,000 people in our 124 care homes and 10 care villages. We provide care for around 6,800 residents


  1. We welcome the Committee’s focus on the issues of funding reform and the impact of COVID. However, we would urge the Committee to also consider how the social care market operates and what oversight is in place, how local authority commissioning can be improved to ensure greater consistency and fairness in how fees are set. Without broader reform of how care commissioning is overseen, the sector will remain a matter of public policy concern even if it receives the additional funding that it requires.


  1. Our comments in this submission are general to the sector, rather than an assessment of our, or any other provider’s, individual financial or operational situation.

Funding of Adult Social Care


  1. The lack of sufficient funding in the adult social care sector has been a long-standing and well documented issue that predates the pandemic, the impact of which has only worsened an already bad situation.


  1. This funding gap has been driven by a number of challenges including an increasing older population living with increasingly complex health conditions, the lack of sufficient government funding, and rising costs such as the National Living Wage (NLW). While in the past the Government has provided some welcome one-off funding increases targeted at the aged care sector, more needs to be done to address the funding issue while also creating mechanisms for a more efficient social care market.


  1. According to the Office for National Statistics (ONS), the UK population aged 65 years or over is projected to represent more than a quarter of UK residents within the next 50 years. Furthermore, with people living longer, the incidence of chronic disease and disability has been increasing and more people are impaired with long term conditions in later life. While people living longer is of course positive, these trends continue to fuel a growing demand for health and social care services and the provision of more intensive and tailored care. In order to cope with these challenges, health and social care provision needs to adapt, as the increase in people living with long term conditions will lead to an inevitable increase in costs.


  1. Cost is an ongoing issue in care provision. The introduction of the National Living Wage, while welcome, has put the adult social care sector under strain by significantly increasing payroll costs. For most providers, pre-pandemic payroll costs accounted for around 60% of total costs. NLW increases are therefore a significant driver of cost inflation in the sector.
  2. It is important to recognise that these increases have taken place against a background of local authority fees that are consistently falling short of the cost of delivering care and a persistent lack of certainty about the government’s long-term plans to ensure the financial sustainability of the sector.
  3. As a provider, we have taken the decision to pay NLW to all of our staff, regardless of age. The failure of funding to keep pace with costs in effect penalises this kind of measure and prevents it from being adopted more widely.
  4. The structure of the UK care market means that public funding is essential to its sustainability. Caring for those individuals who do receive public funding remains central to the business model of many providers, including Bupa – around 60 percent of our residents in the UK are funded primarily by the public sector.


  1. One recent innovation on the part of some commissioners is to link fee increases to specific quality metrics. This is a welcome step towards recognising the importance of providing a high-quality service.


  1. However, there is a disconnect between these quality-based fee increase agreements and the CQC’s inspection approach which means that a ‘requires improvement’ rated home which has significantly improved can wait a long time for re-inspection even when a potential fee increase is tied to the outcome of that inspection.


  1. While we appreciate that the CQC must focus on improving quality of care in underperforming homes, and that the pandemic has further limited their ability to perform inspections in some cases, we would welcome a recognition from commissioners that this positive innovation needs to be based on metrics which can be more regularly assessed as this would unlock much needed fee increases in a sector where funding increasingly fails to correlate with costs.
  2. A recent Health Foundation report showed that adult social care funding should be £6bn higher than actual 2017/2018 spending if funding levels in England had grown in line with the increasing demand since 2010/11. Without additional government funding, there will be a further gap between demand for care and available resources of at least £2.7bn in 2023/24. This is in addition to the £6bn gap which opened up between 2010/11 and 2017/18.
  3. Furthermore, local authority spending on adult social care services reduced by 3.3 percent in real terms between 2010-11 and 2016-17. As a result, while in 2010/11, English Local Authorities spent an average of £345 per person, this number fell to £310 in 2016/17.
  4. Research by The King’s Fund shows that six consecutive years of cuts to local authority budgets between 2010 and 2016 led to 26 percent fewer people receiving publicly funded social care in 2016 compared to 2009/2010.
  5. This unsustainable situation was further highlighted by the 2017 Competition and Markets Authority (CMA) report on the care home market. The CMA found that the gap between the fees local authorities are willing and able to pay and the true cost to providers of delivering care means that those providers or homes that support “primarily local authority funded residents are unlikely to be sustainable at the current rates Local Authorities pay”.
  6. The introduction of the Better Care Fund (BCF) and Social Care Precept allowing local authorities to lift council tax to help fund social care was a step in the right direction that has helped offset a small proportion of the increases in costs stemming from the introduction of the National Living Wage (NLW). However, it is not a long-term or sufficient solution and we have serious concerns about the sustainability of these measures.
  7. The lack of certainty over BCF funding, and central government funding more broadly, is limiting local authorities’ ability to plan future spending on care and therefore their willingness to reflect this additional money in fee uplift.
  8. While providing more funding is critical for the market to remain sustainable, the Government also needs to ensure that additional funding reaches the frontline.


  1. The government needs to take steps to address fee variation across the country. It is very concerning to read in the recent NAO report The Adult Social Care Market in England that DHSC “acknowledges that most local authorities pay care providers below a sustainable rate but does not use this analysis to challenge local authorities directly.”


  1. Currently there exists significant variations between what local areas are willing to pay for care. Fees paid by local authorities to providers are neither consistent nor reflect the reality and true cost of the care provided in a home. If the Government decides to increase public funding, it is more important than ever that it ensures this money flows through to providers in a consistent manner.

Market Oversight Body

  1. The establishment of an independent body to oversee and support planning and commissioning at a council level in England as recommended by the Competition and Markets Authority (CMA) in their 2017 care homes market study would be an appropriate solution. The CMA notes that such a body would help local authorities and the industry negotiate sustainable rates for care.


  1. We note with optimism the Minister for Care’s letter to the Health and Social Care Select Committee of the 10th March. The Care Quality Commission (CQC), with their accountability for oversight of social care quality, would be a good home for such a system to operate from.


  1. We would also welcome an extension to this approach. While the proposal set out in the Minister for Care’s letter of 10th March is a step in the right direction, we would welcome a more substantial body along the lines of the one proposed in the Social Market Foundation’s (SMF) 2020 paper A Market for Residential Care Services.
  2. The SMF paper outlines four areas for an oversight body to have powers: providing guidelines on funding; forecasting cost and demand for the future; holding local authorities to account; monitoring levels of competition and market power. While aspects of the final two are included in the Minister’s letter, we would welcome the expansion of the remit of the body proposed within the CQC, in line with the recommendations in the SMF report.
  3. Furthermore, such a body must be empowered to assess the relative fairness of local authority internal quality reviews and ensure that they are not only fair on their own terms, but that there is also a degree of equity between local authorities’ assessments. Likewise, given the shift towards a more integrated system with the Government’s new Health and Care White Paper, such a body would be well placed to assess the regional variation between local authority and CCG decisions regarding nursing care described above.

Impact of COVID on Social Care

  1. While COVID-19 has not had an impact on our sustainability as a business, we have seen substantially increased costs and the impact the pandemic has had on the wider sector.
  2. ASC providers have seen staffing costs increase, alongside substantially higher costs for infection prevention and control measures. Many, though not all, of these costs have been met by new funding from central government, such as the Infection Control Fund and the Rapid Testing Fund. This comes alongside a significant drop in occupancy.
  3. It is likely that these additional funding burdens will extend beyond the pandemic itself. Residents, commissioners, the Government, and the public will all rightly expect the sector to continue to put safety at the heart of everything we do. Therefore, the expectation of increased infection control procedures will be one that the sector needs to address over coming years, not months. As such, it is important that these sources of funding are not cut off prematurely. To do so would risk a further blow to the sector’s stability.
  4. Given the serious financial impact of the pandemic, it is not surprising that a July 2020 study by ADASS of its members found that:
  1. Alongside the direct additional costs of the pandemic there have been reforms introduced in the crisis which look set to continue beyond COVID-19. The Health and Care White Paper proposes a substantial increase in data sharing between providers and both local and central government in the future. This has already started to take shape during the pandemic with innovations such as the Capacity Tracker being introduced and regularly expanded although often with limited notice or consultation.
  2. We welcome the increased focus on digital and data both in the White Paper and more generally; however, if these proposals are to be effectively implemented, they will require additional funding to be found from non-COVID funding streams. It would not be reasonable to expect providers to incur the additional cost of these measures in the longer term, given the already precarious financial position of the sector.
  3. As the sector emerges from the pandemic, there is a recognition that the services we provide will change and that we must innovate to continue to meet the needs of our residents and communities. We recognise the need to increase support for those with more demanding nursing needs.
  4. An example of how Bupa has already responded to this need to innovate is by opening our first Dementia Village in Willaston, Cheshire. A purpose-built care village it has been carefully designed to support those living with dementia. It is inspired by the approach to dementia care from the Netherlands which aims to support people to live as independently as possible for as long as possible. This model is quite different from traditional dementia care settings. For those with more advanced needs there is a 35 bed care home at the heart of the village.
  5. We have invested in technology at Willaston to provide the best care for residents. For example, we have installed acoustic monitoring to help care for residents through the night. Acoustic monitoring uses a sensor which picks up sounds in residents' rooms. When a sound indicating that a resident may need support is detected an alert is sent to the team who can then act immediately. This means residents won't be disturbed or woken up by regular in room checks through the night, ensuring good quality sleep, which is the foundation for better health and wellbeing.
  6. This is part of a wider programme of adaptation and investment in new technology which we are undertaking to better meet the changing needs of society and the changing health profile of those entering care. We are seeing increasing numbers of residents needing support for conditions like dementia and are integrating this kind of specialist support throughout many of our services.
  7. We also recognise that COVID itself may have long term effects on the health of the community and are regularly assessing the impact of this on the services we provide and the care we offer. We are also working with local commissioners to ensure that the value of innovative services, and their role in supporting the wider health and care system is recognised and properly funded.


  1. The ASC market is an exceptionally broad one which encompasses a range of providers from large corporate entities to single home family run providers. While generalising across such a large variety of providers and models of provision is challenging, one recurring theme is the disparity between local authority funding.
  2. This comes both as a disparity between what neighbouring local authorities will pay for the same service and more broadly in the gap between local authority funding and the actual cost of care. Indeed, recent research by Care England found that a week of care funding in some local authorities was less than the cost of a week in a budget hotel in that local authority area.
  3. Given the sector’s reliance on this funding stream a body which oversees both providers and commissioners would be a welcome and vital prerequisite to addressing the challenges faced by the ASC market.
  4. COVID-19 has caused a deterioration in the sustainability of the ASC market, however it has merely exacerbated pre-existing conditions which have failed to be addressed by Governments of all parties for decades.
  5. We welcome the Prime Minister’s commitment to undertake meaningful social care reform, however it must be a reform programme which encompass the broad range of challenges the sector faces, on sustainability, market oversight and funding as discussed above, alongside the workforce and other challenges that the sector faces more broadly.
  6. It must do this while respecting the mixed-economy of provision within the sector and both raising awareness of the costs of aged-care among the general public and finding a method of raising the necessary public funds for investment in the sector in a manner which is intergenerationally equitable.


April 2021