So, the north Wales toolkit was agreed in—I think it was 2013. That was initially by the three north-east Wales local authorities, and then the other three came into the fold, effectively, with the transition arrangements around their existing fees. At that point, when it was first established, there was an agreement that, if providers had increased costs over and above that, the local authority wanted that provision, then there could be a level of individual negotiation. And that was because of things like—you know, you might want to keep a rural care home that serves a very specific community, but because of the size of that home, and because of the size of the community, there isn't capacity to expand but you haven't got economies of scale, so you've got greater costs there. We also see some care homes just have a cohort of residents, perhaps because they've got a specialism, that are much higher need than others, and so their costs are higher in terms of staffing input. So, again, people have very different needs, even within a specific category, and if you have a large cohort of higher need residents, your costs are going to be higher. So, there's always been that capacity to do an open-book accounting exercise with the local authority and negotiate a higher fee, provided there's a requirement from the local authority—it wants that care home, it wants those placements and it's prepared to do that.
I think what we've also sometimes seen, and I've had conversations with members, who've said, and I've said, 'Well, you could go down this route if you think you can't provide the service'—. Some of it might be about things like layout of buildings as well, in terms of how you manage staffing. You could go into an individual negotiation. And I think people have been quite nervous about doing that, thinking that they wouldn't necessarily get placements if they negotiated a higher fee. But, actually, what we're seeing increasingly is that the inflationary mechanisms used in the north Wales toolkit, and bits being sliced off in other places, have meant that providers just feel they can't provide care on the fees that the local authorities are offering, and so have gone into those individual negotiations. And I think the bottom line is it's due to the inadequacy of the fee that's paid and the negotiating process that's achieved that.
There was detailed work done with a small group of providers on this year's fees. One local authority has said they will look at honouring the staffing hours in that, but they want to do some more work, so they'll make a decision in June. All the others decided not to take on board that detailed work and just inflate the toolkit as it was. But what the work that was done exposed, in particular, was that staffing ratios in care homes were significantly higher than the care that local authorities were paying for. And because of that, providers feel that, in order to maintain the staffing ratios, they need a higher fee to enable them to do that.