Changes to FCOC Calculation
This Message Is from an External Sender
Dear FCOC Users,
Please read the following information carefully – it is vitally important that this is understood as this will have implications for your data return and collection.
A number of updates and improvements were made overnight so please open FCOC this morning to review your location data to see where this may have been impacted. If you have generated any reports, please consider re-running this data to ensure it is reflective of these changes.
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Following feedback from a number of care providers, we’ve taken action to adjust and improve some points on the CareCubed FCOC tool for 65+ Care Homes. These changes are now live in CareCubed FCOC.
Cover costs (on Tab 6 – Direct staff costs)
Calculation of the percentage add on for cover costs has been adjusted so that the total number of working days is reduced in line with the number of non-workdays.
Employer on costs (on Tab 6 – Direct staff costs)
Employer on costs such as employers NI, employer pension contribution, apprenticeship levy, are now applied to the cover costs as well as to the base hourly rate to the employee.
Data entry with decimal places
Some tabs, including Tab 5- staffing hours – allowed a non-integer to be entered e.g., 6.5 hours, but rounded this down to the whole number e.g. 6 hours in subsequent calculations. This has been adjusted so that the full figure (including any decimals) is now used in the calculations.
NEXT STEPS
The changes will be applied to the system and figures for all locations will be re-calculated automatically. In many cases, the resulting change in totals will be very small indeed. Where a location has not yet been submitted to the local authority, the care provider should simply review the figures and make any desired amendments before submitting.
Where providers have already submitted the location data to the local authority, they may wish to adjust and resubmit. To facilitate this, all locations which were in status Submitted or Approved at close of business on Wednesday 6th July have had their status set to “In Query”. Providers have the opportunity to review the figures, make changes if desired, and resubmit to the local authority. If they do not wish to make any changes, they can simply re-submit.
NOTE FOR LOCAL AUTHORITIES
The provider costs have been automatically updated in the Tool and so you don’t need to take any specific action to make this happen. However, you should be aware that:
If you have received and approved provider submissions – You can now see the revised figures in the reports in the Tool and you are advised to should compare these to the figures you previously agreed, in order to understand the cost difference. The status of these homes has been changed from ‘approved’ to ‘in query’ to reflect this and it applies to 20 care homes across the country.
If you have received information from providers and have yet to approve these – You should be aware that some of the figures in these submissions may now have changed and should review be part of any review and clarification process.
If you have not received submissions from providers – These changes will be reflected in any future submissions you receive from providers.
RECENTLY PUBLISHED FAQS
In addition to the above the LGA have recently published these FAQs to assist with the FCOC exercise - https://www.local.gov.uk/our-support/sector-support-offer/care-and-health-improvement/commissioning-and-market-shaping/fair-cost-care-faqs-and-dhsc-guidance
Return on Operations (ROO)
This is a gross profit or surplus number – this is the gross amount before tax. Care Providers can provide this as a % markup on operating costs identified in the expenditure tab OR as a per resident per week value within the FCOC tool. Return on operations can be calculated as a percentage markup on operations and head office costs. These are operating costs excluding Interest, Tax, Depreciation, Amortisation and Rent (ITDAR) which is captured separately as part of Return on Capital. Return on operations will consider operational risks such as drops in occupancy, inflationary pressures, a provision for future investments (where not capitalised) and dividend payments. For Not-for-Profit organisations this should consider a surplus in line with their reserves policy.
Return on Capital (ROC)
Investment by nature involves risk. The cost of capital is the return that investors require to invest in a business. Return on capital is a judgement rather than a hard science. However, return on Capital is an important consideration, as it is one of the main fixed costs in a care home and should include borrowing, interest, depreciation, cashflow funding, and capex etc. It should also include mortgage and rental payments where required. You can, like return on operations, provide this either as a % of a property valuation – as per the DHSC guidance (https://www.gov.uk/government/publications/market-sustainability-and-fair-cost-of-care-fund-2022-to-2023-guidance/annex-e-further-detail-on-return-on-capital-and-return-on-operations) OR as a per resident per week value if the property is rented.
We hope these changes are positively received but appreciate any inconvenience caused by a need to reconfirm your data submissions.
Please let me know if there are any questions on this.
Kind Regards,
Sherif
Sherif Attia
Head of Design
M: 07793 510 885