Important deadlines loom for local authorities wanting to make use of the £1.05 billion allocated for adult social care. The Market Sustainability and Improvement Fund (the Fund) can be used by local authorities to build capacity and improve market sustainability in the adult social care market by:

• increasing fee rates paid to adult social care providers in local areas;
• increasing adult social care workforce capacity and retention; and
• reducing adult social care waiting times.

Local authorities can choose how they focus their allocation of the grant, distributing it across the three target areas above to support the most pressing needs in their local area. When choosing which of the target areas they want to focus on, recipient authorities should provide assurance that other target areas not selected have not worsened. 

The Department of Health and Social Care's (DHSC) guidance confirms 'If choosing fee rates as one of the target areas for 2024 to 2025, the government expects local authorities to seek fee rate increases beyond planned National Living Wage and inflationary fee uplifts, in addition to maintaining improvement from 2023 to 2024 as set out above… when setting fee rates for 2024 to 2025, local authorities should work with providers to ensure increased fee rates lead to improvements to providers’ operations, such as:

• staff pay, benefits and retention;
• payment of travel time in domiciliary care;
• improvements to service quality, such as eliminating call-cramming, and the ability to invest in estates and technology.'

At the same time, DHSC recognises the three areas of improvement are closely linked and interdependent. 

For example, ‘to increase adult social care capacity and reduce waiting times, it may be necessary to recruit additional staff and retain the existing social care workforce. The primary mechanism by which local authorities can support their providers to retain staff and recruit new staff is often by increasing fee rates paid to them, and managing their contracts with providers well, to ensure fee uplifts are being used to improve workforce pay and conditions.’ 

Social care providers who can easily report on their activities and metrics, demonstrating improvements in the relevant target area(s), will likely find themselves at the front of the queue for fee uplifts.

There are also certain grant conditions that local authorities must meet. For example, local authorities must spend their allocation of the previous 2022 to 2023 Market Sustainability and Fair Cost of Care Fund and maintain these previously increased fee rates paid to adult social care providers. The £888 million element of the Fund must then be used to maintain improvements made from 2023 to 2024. 

Local authorities must provide DHSC with an initial and final 2024 to 2025 report to demonstrate that the conditions and expectations of the grant have been met. Local authorities must also submit an MSIF capacity plan, reporting on expected activity and capacity in long-term care services and templates have now been published. 

Fund allocations to local authorities 2024-25 can be found here. 

To assess whether improvement has been made in increasing fee rates beyond planned rises, local authorities must include their local average fee rates in the initial and final 2024 to 2025 reports to be shared with DHSC in May 2024 and May 2025. As with previous years, fee rate data will be published.

Local authorities must submit the following documents to: msifcorrespondence@dhsc.gov.uk:

• initial report by 11:59pm on 22 May 2024;
• MSIF capacity plan by 11:59pm on 10 June 2024; 
• final report by 11:59pm on 21 May 2025.