Many organisations have been operating a ‘buy now, budget later’ approach to Covid-19, which prioritises the safety of customers and staff over the bottom line.
Whilst some financial relief has been offered by the Government, these emergency funds are a finite resource and will come to an end before the virus has come under control. With the Government focussing on recovery and a transition out of Covid-19 special measures, providers need to consider how they finance these changes in the longer-term and the prospects of recovering their unfunded outlay to date if that is significant.
What are the actual costs?
We know that domiciliary care is more costly as a result of Covid-19 and whilst obvious to those on the front line, it can be harder to convince commissioners of this. Providers should be able to demonstrate the differences in operational costs arising from:
- the price and volume of Personal Protective Equipment (“PPE”);
- the cost of Statutory Sick Pay (“SSP”) or any enhanced payments to compensate staff whilst they isolate;
- the provision of testing kits;
- the higher cost of insurance cover and reserves for uninsurable risks;
- upgrades to new IT systems for digital care records;
- enhanced training for Covid-secure environments;
- cycle to work schemes and workarounds for public transport; and
- increased administrative and management costs.
Local authorities have been encouraged to work in partnership with providers and find ways to ensure that essential services remain financially sustainable. Both local authorities and providers are reminded of the importance of transparency and there is an expectation that providers will work on an open-book basis when applying for financial relief. Now is the time to the evidence the true cost of Covid.
Financing the ‘new normal’
A failure to engage in an open conversation with commissioners now will inevitably mean providers will lose out and it will be assumed that they are able to absorb these costs so a proactive approach is required.
We find that those providers that have kept good records of the changes they have made to their services and the associated costs of meeting their legal requirements, demonstrated an ability to innovate and respond flexibly, and have risen to the challenge of the new ‘best practice’ are in the best position to ensure that the cost of Covid-19, both now and in the future, is apportioned fairly between them and their commissioners.
Sally Warren, director of policy at The King’s Fund, said of the £1 billion offer: "It is unlikely to be enough to address the pressures faced by services across the country, which are likely to require more emergency funding next year. Funding for social care in particular falls a long way short of what is needed to meet the needs of service users, their families and carers, let alone reform the system."