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Supporting People - Supporting Independent Living: Folder 2 - Part 3: Operational Guidance and Part 4: Financial Guidance

2 Service Reviews Updated: 07/06/05

2.1 Introduction

2.1.1 Local authorities are required to review all Supporting People services. The original guidance requires that this is completed by 31 March 2006 however this has been extended by one year until 31 March 2007. Local authorities were required to include their programmes for service review in their Strategic Plans submitted to the Scottish Executive by March 2004. The purpose of service reviews is to allow local authorities to acquire in-depth information about the services they grant fund, assess their strategic fit and ensure that they represent value for money as well as good quality services for service users. A detailed knowledge of the services within each local authority area will provide the authority with the information required to ensure that the services provided meet their overall strategic priorities and provide effective and well managed services for those identified as being in greatest need.

This guidance is to assist local authorities in fulfilling their obligation to review services purchased with Supporting People funds. It is to be used for all services. However, separate guidance on Sheltered Housing Service Reviews (Folder 2, Part 3, Section 3) and Community Alarms guidance (Folder 2, Part 3, Section 4) has been issued and should be considered alongside this guidance. Service reviews for these types of services will include additional elements covered or described in this guidance.

2.1.2 The services covered by this guidance are prescribed by the Housing (Scotland) Act 2001 (Housing Support Services) Regulations 2002 and accompanying statutory guidance.

2.1.3 As many services combine housing support and social care as part of an integrated, holistic service, several funding streams may be involved and where this is the case it may be appropriate to review other services provided by the organisation at the same time . The most common situation would involve Supporting People grant alongside Social Work funding for care services, with separate contracts / service level agreements (SLAs) for each funding stream. When conducting Supporting People reviews in such services, local authorities should liaise with the Scottish Commission for the Regulation of Care (the Care Commission), the commissioner for the social care aspect of the service and any further joint funders, for example health boards.(Where authorities have entered into joint contracts for provision of both Supporting People and social care separate accounting will be required).

2.1.4 The service review process should be seen as part of the ongoing process of contract / SLA monitoring and continuous improvement. The review process for all services must take place prior to 31 March 2007 and will determine the future of the service and the nature of any subsequent full contract / SLA.

2.1.5 Service reviews should be approached in a spirit of partnership between providers, authorities and service users as this is more likely to lead to an open and honest appraisal, from which all parties may benefit. Where there is more than one funder of a service, for example social work and/or health authorities, all funders should be given the opportunity to be involved in all stages of the review process.

2.1.6 Carrying out service reviews has resource implications for both the provider and local authority. The process described is intended to strike a balance between the efficient use of resources and the need to gather sufficient information to inform contract / SLA decisions.

2.1.7 Responsibility for administering service reviews lies with the local authority who is party to the contract / SLA, although this may be delegated to a third party, for example, in cross authority funded services where the local authority is a minority commissioner of the service. In this case the host authority may agree to the majority commissioner carrying out the review. This guidance does not apply to any services purchased through direct payments.

2.1.8 Supporting People encourages diversity of provision to increase choice. Some providers may require more help. In particular small, specialist or new providers may need assistance in meeting the requirements of service reviews. Local authorities should make provision for this and assist these providers, both in completing the review and in managing any changes that are highlighted because of a review.

2.1.9 In undertaking service reviews, local authorities will need to have regard to service users' right to privacy as set out in the National Care Standards for Housing Support Services. (The service users must have expressed a willingness to meet with the reviewing authority in their home for the purposes of involving them in a service review, otherwise any Service User involvement must take place out with the home).

2.1.10 This guidance on conducting Supporting People reviews is consistent with best value principles and processes within local authorities, and will be consistent with:

a) the Local Government in Scotland Act 2003 http://www.hmso.gov.uk/legislation/scotland/acts2003/20030001.htm and

b) the accompanying statutory guidance issued under s2(1)(a) of the Local Government in Scotland Act 2003 http://www.scotland.gov.uk/library5/localgov/lgsbvg-00.asp

2.2 Review Cycle

2.2.1 All services receiving Supporting People funding must be subject to a review no later than 31 March 2007. These reviews:

• should be programmed following consultation with providers and users;
• should follow a methodology for conducting reviews that is consistent with this guidance and appropriate to local circumstances;
• should provide a structured and transparent process of managing change where this is necessary to achieve service improvement;
• should balance the need for continuity and stability with the need for quality and Best Value, and where appropriate, broaden the range of services that are available to users;
• are an opportunity for local authorities to work in partnership with the provider to examine ways in which the service delivery might be changed to better reflect the local strategic objectives and / or to improve service to users; and
• should take account of any legislative/policy changes.

2.2.2 Local authorities may have a large number of Supporting People services in their area, and therefore a programme detailing when services will be reviewed will be necessary to manage the task. Local authorities should have planned the initial review cycle setting out the overall basis for structuring the programme of reviews (such as which services or client groups are to be reviewed first). The Care Commission can help in identifying which services should be considered for priority review based on information they hold on the service. The authority should also consider the "Homelessness Priority Need 2012 Planning Pro-Forma" when identifying priority reviews.

2.2.3 In devising the programme the general aim is to prioritise reviews on services that are considered a higher risk. Factors that may make a service a higher risk include those listed below. These factors should be considered jointly - a service that is in one of the categories below may not be a priority for early review if it does not fall within any other categories. Authorities should use their judgement in prioritising services for review, in consultation with regulatory bodies and other stakeholders.

• Services that have not been subject to a review for 5 years or more.
• Services of which the local authority has little knowledge.
• Size of the service - the greater the number of users generally indicates a higher priority for review.
• Services where there are performance concerns. The local authority should prioritise services where it or a regulatory body has concerns about the provider's performance, for example where it has become aware of complaints and concerns particularly from service users, there are a high number of vacancies or the nomination agencies' nominations have been rejected unreasonably.
• Services that the local authority believes are less cost beneficial than others.
• Services which may have little continuing strategic relevance.

Note: Services referred to as sheltered may not normally be a high priority for service review. Additional guidance on service reviews for sheltered housing forms part of a separate guidance (see Part 3, Section 3).

2.2.4 Local authorities should take cognisance of other programmes for review, such as the Care Commission, Communities Scotland, Homelessness Strategies and other regulatory bodies. It should be noted that where appropriate service reviews may inform the local authority's own Best Value reviews.

Note: Issues regarding transparency and coherence between various review programmes will be considered by the wor king group which has been established to look at duplication issues.

2.2.5 The draft framework which determines the priorities for reviewing all existing provision between 2003 and 2006 was prepared and included in the Strategic Plan. This plan should be updated annually in order to address local strategies. Authorities may also revise their Plan on receipt of notice of future funding.

2.2.6 Once the programme has been finalised the local authority should make the programme available to all stakeholders. Local authorities may also wish to consider making their programme available on their web site while respecting issues of confidentiality, for example omitting service addresses and any personal details of service users.

2.2.7 Although it is vital to establish a programme for service reviews in some circumstances it may be beneficial to the provider, service users and the local authority to carry out all or part of a review before the time that had been previously agreed. For example:

• where the review will inform the authority's own Best Value review;
• where there is an unexpected change in demand for provision;
• where local strategies change.

2.2.8 The local authority will need to allocate and train sufficient staff to undertake the initial service reviews. Service time will need to be allocated for:

• introducing the service review process to providers;
• visiting services for familiarisation;
• responding to queries from providers;
• reviewing providers' responses to the service review and seeking clarification/verification as necessary;
• carrying out the second stage review where appropriate; and
• reporting.

2.2.9 Much of the data required for devising the programme should have been extracted from the mapping supply database or local Supporting People databases. In addition the following information is required:

• the outcomes of other reviews (see paragraph 2.2.4);
• the date the service is subject to future reviews by other bodies (see paragraph 2.2.4);
• is it a cross-authority service;
• is it a service provided by a non Local Authority body, such as health;
• is the service considered short-term for charging purposes; and
• comparable cost data.

2.2.10 After the initial review, subsequent reviews of services should be undertaken at least every five years . Sooner if there is major change in service provided or if the contract monitoring process indicates a need to do so.

2.3 Structure of the Service Review Process

2.3.1 The service review process described below is appropriate to all Supporting People services (see paragraph 2.1.1). However, it may be appropriate to vary the assessment criteria to make it more relevant for particular client groups or types of services (including adapting the Sheltered Housing Self Assessment Schedule for accommodation based services other than sheltered housing).

2.3.2 Consistency in the format of the service review process is desirable as this assists providers who operate across a number of authorities and assists authorities wishing to make comparisons with providers in other authorities. Consistency of format is also useful for strategic decision-makers within a single local authority, seeking to take an overview of the services in their area.

2.3.3 Services are normally required to meet the six criteria listed below in order to continue to receive funding, or be able to demonstrate the potential and willingness to meet them within an agreed time scale. The criteria are that a service must:

• meet the prescribed services in the Housing (Scotland) Act 2001 (Housing Support Services Regulation 2002)
• operate in accordance with the local Supporting People Strategy;
• meet identified current and future demands for services;
• provide a quality service which effectively meets the National Care Standards for Housing Support Services and the needs/preferences of service users and potential users;
• be cost beneficial (see paragraph 2.11);
• be provided by an organisation which can demonstrate competent financial management for the foreseeable future; and
• be registered with the Care Commission.

2.3.4 The service review process adopts a three staged approach; minimising the resources required to carry out the review and effectively targeting resources.

2.3.5 The first stage is largely a desktop review by the local authority, using existing information sources, where possible, such as local performance information, Care Commission inspection reports etc. It may also be possible to include elements of Stage Two, within the initial Stage One review however, this does not preclude direct contact with housing support service providers and service users (see 2.1.9). The purpose of the first stage is to identify areas of strength and weakness in a provider's performance. If a full contract / SLA is to be entered into with no substantial changes to the terms of the interim contract / SLA the review process is complete.

2.3.6 If, however, the first stage identifies the need to make changes to the contract / SLA, where these might be beneficial to the service user or provider, the second stage of the review should be invoked. The following are examples of circumstances where a second stage review may be beneficial:

• decommissioning or reprovisioning of services;
• areas of concern which could result in changes being made to the contract / SLA or to the funding arrangements;
• a service no longer meets the local authority's strategic priorities.

2.3.7 The second stage is a more in depth review involving dialogue between the local authority, service users and providers. Its aim is to identify and agree the actions necessary to achieve changes or improvements to services. This second stage will require greater input from local authorities and providers, particularly in obtaining representative views of service users. Authorities should use their discretion in determining when a service should proceed to a second stage review. They will be expected to demonstrate that they have done so consistently across a number of services.

2.3.8 A third stage review to explore alternative options is invoked when:

• there is evidence of breach of contract / SLA,
• when it is necessary to consider withdrawing funding; or
• if the service no longer has a strategic relevance.

If a third stage review has been invoked then the local authorities should advise the relevant regulatory bodies and funding agents of its concerns, if they have not already done so.

2.4 Encouraging Objectivity

2.4.1 Supporting People service reviews must be transparently objective. This is important, as authorities will be reviewing their own services and services that are in direct competition with their own services. Local Authorities should consider best methods of publication of review outcomes, user satisfaction surveys and links with Best Value. Providers should be given the opportunity to comment on any such report prior to publication.

2.4.2 The review focuses on outcomes, which can be hard to measure. The process breaks this into more manageable stages. For example:

• what does the strategy say about promoting independence?
• to what extent does this service contribute to this aspect of the strategy; and
• what is the evidence to support this assessment?

2.5 First Stage Assessment

2.5.1 The first stage of the review assesses the service in the following areas:

a) strategic relevance (2.6);

b) demand for the service (2.7);

c) quality and effectiveness (2.8);

d) cost of the service (2.11);

e) provider capacity (2.12); and

f) should the review move to second stage? (2.14).

2.6 First Stage: Strategic relevance

2.6.1 Each local authority produces a five-year Supporting People Strategic Plan, updated annually. The local authority can use information from the strategic planning process, regular performance monitoring and other information from the provider to assess the strategic relevance of the service.

2.6.2 The table, below, in column A, gives examples of the criteria that might be used in an assessment. Local authorities may add to these examples. In column B, an assessment is made of the extent to which the service complies with the strategic priorities or objectives in the plan. Column C is used to list evidence available to support the assessment, with specific reference to the relevant sections of the Supporting People Strategic Plan.

2.7 First Stage: Demand for the service

2.7.1 The demand for a service is based on information that the Supporting People team and their partners, for example, Communities Scotland, will have already collected for strategic planning and local performance management.

2.7.2 In cases where there is insufficient demand for a service this will normally be demonstrated and addressed through regular contract / SLA monitoring. For example in-depth monitoring of refusal rates or the inability of a service user to take up a place because of lack of funding if the place was previously self-funded.

2.7.3 The information gathered from the strategic planning process and contract / SLA monitoring is relevant at a service review stage, as it may be necessary to vary the terms of the full contract / SLA to reflect changes that have been agreed.

2.7.4 In assessing demand for a particular service, the relevant factors are set out below:

a) Any statements in the Supporting People Strategic Plan regarding supply and demand, including:

• available needs analysis studies; and
• projected growth or reduction in demand

b) Quantitative and qualitative indicators, including:

• void level over the last 12 months;
• trend in voids in recent years or since last review;
• refusal rates and reasons for refusal;
• characteristics of service users refused or subsequently excluded from the service; and
• reasons for service users leaving the service (for example Direct Payments).

c) Known or forecasted changes in supply (such as pipeline services, planned closures).

d) Feedback from stakeholders, including (where relevant):

• service users (see paragraph 2.10.3)
• other funders;
• referral sources;
• support and care managers;
• other local authority staff (for example environmental health and social work) with an interest in the service; and
• others (such as housing providers, Houses in Multiple Occupation Teams/Officers) with an interest in the service.

e) Any additional information that the provider or authority thinks particularly relevant such as:

f) demand issues relating to particular sections of the community (for example Homelessness Priority Need);

• condition of the building/accommodation (if applicable) in which the service is provided;
• impact of current referral arrangements on performance; and
• any cross authority arrangements.

2.7.5 Using all relevant information an assessment is made to determine if there is a current imbalance of supply and demand and whether the future trend will alleviate or exacerbate any imbalance.

2.7.6 Where there is over demand or decreasing demand for a service and future trends indicate that this is unlikely to be rectified, the Supporting People team should use the matrix below to decide whether to move to a second stage review

Action Matrix

2.8 First Stage: Quality and effectiveness

2.8.1 The criterion of 'quality and effectiveness' tests the service provider's ability to meet the service specification attached to the contract / SLA.

2.8.2 This part of the review process tests two aspects of quality, using local performance information gathered as part of contract / SLA monitoring and the views of key stakeholders. Both of these will be ongoing processes. The purpose of the contract / SLA review is to review past performance and improvements made, which may influence a decision to enter into a full contract / SLA, or the terms on which a contract / SLA is entered into.

2.8.3 The two elements are:

• quality standards and performance; and
• feedback from users and other stakeholders.

2.9 First Stage: Quality Standards and Performance

2.9.1 The local authority should obtain periodic reports on the performance of each service provider including their ability to respond to the needs of individual service users as part of normal contract monitoring procedures. Support providers will be expected, as a minimum, to meet the standards set out in the National Care Standards: Housing Support Services (Folder 3, Part 5 Related Guidance and to demonstrate contract / SLA compliance).

2.9.2 The Supporting People team should liaise with other regulatory bodies and consider copies of relevant reports on the service being reviewed. The Care Commission will also be able to offer an objective assessment in relation to quality, through the inspection process. Some services will be reviewed before they are inspected by the Commission, but in these circumstances the local authority may wish to undertake a more in depth review, and liaise with the Commission throughout.

2.9.3 Using the pro-forma below, the Supporting People team will assess the extent to which the provider meets the quality standards in Column A. In Column B an assessment is made, showing how well the provider has met the criteria. Column C is used for comments, for example, about the provider's commitment to continuous improvement.

2.9.4 The need for future change and improvements as well as an assessment of the current situation should be noted. For Example:

2.9.5 Using contractual reporting information, an assessment is made of how well the provider has performed against agreed performance targets.

2.10 First Stage: Feedback from Service Users and other Stakeholders

2.10.1 Providers will be required to involve users appropriately in the course of service delivery and to consult with them and other stakeholders over service provision. How often this user involvement is carried out may vary across client groups and types of service.

2.10.2 Analysis of stakeholder feedback on service quality provides an indication of both:

• service users' opinions of the appropriateness and quality of services; and
• the provider's commitment to consult meaningfully with service users and to act on that information.

2.10.3 Before consulting service users and key stakeholders, providers and local authority teams must be absolutely clear about:

• what they want to find out;
• what they aim to do with the information, and what the limitations are;
• the appropriate time to consult;
• who they want to consult with;
• data protection issues

2.10.4 These factors will inform the method, size and timing of consultation.

2.10.5 In identifying issues for feedback, providers with the help of local authorities will need to identify the key elements of the service on which they want feedback.

2.10.6 Providers will be expected to consult with service users on an ongoing basis and demonstrate how feedback has been used to improve services. From time to time local authorities may decide to undertake evaluations of certain groups of services. This may be done for example on a client group basis. The objectives may be to identify duplication, and improve co-ordination of services. The impact upon and links with other services is vital.

2.10.7 It is important to remember that different service users will need different types of support to be involved and to have their views heard. Different methods of consultation will also be appropriate for different users and in different service types. As a result comparison between providers can be difficult. To address this, information from providers can be gathered on the approaches they have taken to involving and consulting users and also by focusing on how providers have used these opportunities to improve the experiences of service users. This gives a context within which to evaluate the results. The Supporting People team can then take a view on whether the provider should be required to carry out further work in this area.

2.10.8 The existence of a personal housing support plan is a requirement under the National Care Standards for Housing Support Services. Those reviewing services will want to consider any changes to overall service delivery that have resulted from the regular assessment of these plans by providers.

2.10.9 The results can then be analysed in a way that takes account of the different methodologies. The results of such an analysis may be useful for other reviews undertaken by the local authority or other regulatory bodies, for example Best Value reviews.

2.11 First Stage: Cost of the service

2.11.1 This section of the Supporting People review assesses whether a service is cost beneficial. The costs under consideration are the proposed costs of the service, if a full contract / SLA were to be entered into. It will not be necessary to carry out this assessment if, for another reason, it has already been decided that a full contract / SLA will not be entered into.

2.11.2 Some caution needs to be exercised in comparing the cost and cost effectiveness of services. Comparisons should be for similar services, providing similar support, and taking account of all expenditure incurred ¹. Ideally, similarity should be in respect to service quality and outcomes rather than inputs. Similarity of inputs, while not the only consideration, is still relevant and potentially informative. The individual circumstances of each provider and the service provided must be taken into account. It is important to recognise that small and specialist providers encourage diversity of provision and may not benefit from economies of scale (see guidance on Issues For Small, Specialist And New Providers - Folder 1, Part 1, Section 6)

2.11.3 The local authority should only seek to reduce the contractual costs when the costs are considered not reasonable and justifiable. That is, the service is not cost beneficial, or the costs are unreasonably high compared to other similar services. It may be counterproductive to re-negotiate over small differences in costs. The best interests of the service users should also be addressed when considering changes to contracts and /or services.

2.11.4 The table below gives an example of how services could be classified, so that their relative cost and cost effectiveness could be assessed.

2.11.5 Cost analysis is primarily concerned with costs to the Supporting People pot, but should also have regard to the overall costs to the public purse. Some services may be able to provide good value to the Supporting People pot by using other revenue streams, for example charitable funds, to enhance their service provision. Any non-public funding streams should be disregarded for the purpose of this assessment.

2.11.6 Where the costs of a service are unreasonably high, or the service is not cost beneficial, the second stage of the process may be invoked.

2.11.7 Cases where the costs are low may warrant further investigation. Unusually low cost may be an example of a cost beneficial way of providing the service, and is an example of good practice, or alternatively an indicator of poor quality (which should be picked up in the assessment of quality and effectiveness above). Low costs may indicate lack of sustainability of a service (which is dealt with in the assessment of provider capacity).

2.12 First Stage: Provider Capacity

2.12.1 Provider capacity, such as adequacy of staffing arrangements and training, financial viability and security of the provider etc, will be assessed by the Care Commission. The local authority contract managers should liaise closely with the Care Commission and any other agency or regulatory bodies, where available, before agreeing the terms of a full contract / SLA.

2.13 Subsequent Stages of Review

2.13.1 It would be good practice, where possible, for those who undertake the first stage assessment to remain involved throughout the subsequent stages of the review.

2.14 Moving to the Second Stage

2.14.1 Once the first stage review is complete the Supporting People team should assess whether the criteria at paragraph 2.3.3 are met, and whether the assessment should move to the second stage.

2.14.2 Additionally, in the case of sheltered housing, if the self-assessment review submitted by the provider to the Supporting People team (see Part 3, Section 3) raises matters of concern, a second stage review should be performed.

2.15 Second Stage Assessment

2.15.1 The second stage of the Supporting People review process is invoked for the reasons such as those set out in paragraph 2.3.6. It is important to incorporate service user feedback at this stage.

2.15.2 The second stage moves from a desktop assessment and will involve both the local authority and the provider working together in the assessment and in agreeing any plan to make changes.

2.15.3 The second stage review may look at any or all of the criteria listed in paragraph 2.3.3. For example, if the first stage review has shown a clear strategic need for a service it may not be necessary to consider the strategic relevance at the second stage.

2.16 Second Stage: Strategy

2.16.1 The local authority should record the changes required and their importance, on a scale of 1-5, before exploring the provider's ability and willingness to make changes. For example:

2.16.2 The local authority should record the outcomes of the discussions with the provider and any actions agreed.

2.17 Second Stage: Demand for the Service

2.17.1 Having established that there is an imbalance in supply and demand, the second stage looks at the reasons for the imbalance. For example, in authority A there is a strategic need for a housing support service for people with a physical disability. However there may appear to be a low demand for such services because, for example, its location or affordability,is inappropriate.

2.17.2 The assessment at this stage depends upon the available data, but could include analysing the following:

• feedback from current service users on reasons for taking up a service or place in a service (and whether positive or negative);
• whether voids /unfilled capacity relate to particular units or unit types (particularly relevant for residential services);
• waiting lists;
• reasons for refusals;
• re-let periods and reasons for delays in letting (or equivalent for non-residential services);
• the range of referral sources used and their efficiency;
• follow-up to comments from stakeholders from first stage assessment and
• a reduction in the level of floating support required (more capacity to allocate support hours to another service user).

2.17.3 The following checklist may be useful for considering the reasons for the apparent lack of demand, before going on to specify the changes required and their feasibility:

• overly restrictive criteria for service users;
• poor performance by referral sources;
• delays elsewhere in process of selecting new service users;
• demand exists but poor reputation;
• demographic changes;
• expectation changes on part of service users;
• changes in needs of potential service users;
• service or criteria for new service users inadequately described; or
• demand exists but service is located in the wrong place
• uptake of Direct Payments by service users.

2.17.4 A second stage review of demand may lead either to changes in the service provided, changes in the contract / SLA, changes in policy or to procedural changes of either party involved.

2.17.5 If significant changes to the service are required, then the local authority, with the provider, should evaluate the provider's ability and willingness to change. The table below gives examples of the factors to be considered:

2.17.6 The local authority should record the agreed outcomes of the discussions with the provider and any actions agreed using the following tool:

2.18 Second Stage: Quality and Effectiveness

2.18.1 The second stage assessment of quality and effectiveness involves a more in-depth investigation of the ways in which a provider's performance could improve the service's quality and effectiveness.

2.18.2 As part of the second stage assessment the Supporting People team may need further information, for example:

• asking the provider for evidence of performance in particular areas;
• conducting interviews with a selection of service users
• following up on the initial feedback provided by stakeholders;
• auditing the provider's self assessments in particular areas;
• visiting the service; or
• liaison with and/or reports from other regulators, where available.

2.18.3 Possible changes should be discussed and negotiated by the local authority and the provider. If changes are required to the service, then the following pro-forma may be used:

2.18.4 The agreed changes should be documented, as shown in the table below:

2.19 Second Stage: Cost of the Service

2.19.1 The aim of the second stage assessment of cost is to investigate why costs of services appear high compared to similar services and to identify possible savings.

2.19.2 If the costs are unreasonably high, then the provider should be asked to identify ways in which costs can be brought more in line with comparable services (if they exist) including any outwith the local authority area. Some providers, particularly new, specialist or small ones, may need to work in partnership with the local authority to identify savings.

2.19.3 The local authority should work with the provider to document its assessment and agree the action required. The table below shows an example:

2.20 Second Stage: Provider Capacity

2.20.1 The second stage of the assessment identifies the reasons for inadequate capacity and will establish targets for remedying this and identifies resources that may be required in order to achieve targets. Generally it is the responsibility of the Commission to ensure providers have capacity to deliver services in the appropriate manner. However if the service has not yet undergone inspection the authority may ask the Commission to prioritise the service for inspection and/or jointly investigate further.

2.21 Moving to the Third Stage

2.21.1 Once the second stage of the review process has been completed the local authority will need to decide whether the review should move to the third stage. The third stage considers the withdrawal of funding and the implications of this decision.

2.21.2 It may be appropriate to invoke the third stage in the following circumstances:

• the service does not meet the strategic aims of Supporting People and the provider is unwilling or unable to make the changes necessary for the service to meet the strategic aims;
• demand for the service is low, and is likely to remain low and the provider is unwilling or unable to make any changes that would increase demand for the service;
• the quality of the service (and if applicable the accommodation) is below the acceptable standard as required by various regulatory bodies and agencies, and the provider is unwilling or unable to make changes to bring the service to an acceptable standard;
• the cost of the service is unreasonably high, and the provider is unwilling or unable to reduce costs to a reasonable amount.

2.21.3 The decision to move to a third stage review may arise because of any one or more of the above factors. Local authorities will need to exercise discretion, before moving to the third stage.

2.21.4 The table below lists a number of factors to help in deciding whether to move to the third stage. Not all the factors will be relevant in all circumstances.

2.22 Third Stage: the Decision to Withdraw Supporting People Funding

2.22.1 The third stage applies only to support services that are not sheltered housing (for the purposes of Supporting People). It does apply, for example, to temporary accommodation, rehabilitation and support services. The third stage applies normally after the first two stages have been completed.

2.22.2 Where the Commission cancel registration, or the provider applies for de-registration, the third stage procedures described below will not apply.

2.22.3 The third stage, will, however, apply for example when a decision to withdraw funding follows a Best Value review or no longer meets strategic priorities.

2.22.4 The decision to cease funding a service is a serious decision that will impact on service users, other stakeholders and the service provider. Withdrawing the funding of one service may threaten the financial viability of a provider. The decision may also impact on other providers who are expected to absorb increased demand, as a result of the loss of a service. Normally, at the end of the review process there will need to be a lead-in time of up to 6 months where a new service is commissioned or an existing service is to be remodeled.

2.22.5 If a service receives funding from another funder, such as social work and/or Health authorities, withdrawal of funding will affect the other commissioner(s) of that service. Other funding agencies should be involved in the decision making process leading to withdrawal of Supporting People funding.

2.22.6 Once the decision to cease funding a service has been made the local authority should continue to work with the provider to minimise the impact on service users and other stakeholders.

2.22.7 There are a number of possible options that may be considered. These may be considered either before the decision to withdraw funding, and may affect that decision, or after the decision to withdraw funding, depending on the circumstances:

• securing alternative funding so that the service may continue;
• changing the provider of the service;
• remodeling the service - any planned alteration to a service which will result in changes to the physical layout (for accommodation based services) and/or will impact on residents, staff, and revenue funding;
• reprovisioning the service - providing a new service on a different basis;
• reshaping the service - changes to the support service provided, such as increasing or decreasing support provided or changing the client group; or
• stop using the service.

2.22.8 These options are considered in greater detail below.

2.23 Third Stage: Ceasing Funding

2.23.1 Before ceasing funding, stages one and two of the service review must be completed, and any appeal by the provider has been considered (see below).

2.23.2 Other than for strategic reasons, ceasing funding a service should generally be considered as a last resort, and even then other options may be explored.

2.23.3 In some cases the transfer of support provision to another provider is appropriate. If negotiations to transfer the support provision to an alternative provider have been unsuccessful then consideration may be given to discontinue funding the service.

2.24 Third Stage: Who Makes the Decision

2.24.1 To ensure transparency and consistency, there must be a clear, agreed process stating how the decision to discontinue funding is made and who is involved. The decision should be ratified either by elected members or a senior officer designated by the local authority.

2.24.2 The reasons for withdrawing funding from a service should be based on the findings of the review and recorded.

2.24.3 Withdrawing funding from a local authority service may require a different process to ensure that they are treated equitably to other providers. Also, some changes to local authority services may require approval of elected members in any event.

2.25 Third Stage: Cross Authority Services

2.25.1 In cross authority services the decision to cease funding should be made by the host local authority. It is good practice for all authorities that are affected by the closure to be involved in the review process and consulted on closure.

2.26 Third Stage: Risk Assessment

2.26.1 Before the final decision to withdraw funding, a number of factors will need to be taken into account:

2.26.2 A risk assessment should be carried out of the impact of the decision on:

• service users - what will be the impact of the withdrawal of funding;
• availability of viable alternative services to service users in the local area;
• the wider community - for example, the decision to close a service for violent ex-offenders may impact upon wider community safety issues;
• the effect on other providers and their ability to meet increased demand for services;
• other strategies - how will the decision impact upon other strategies, for example abolition of Homelessness Priority Need;
• other statutory agencies - will the decision have an impact on other agencies - for example, a service that is jointly funded by Community Care & Supporting People funding should only be closed by agreement with both funders;
• the closure of a service for people with mental health problems may impact upon the Health service, even if the only revenue is from Supporting People;
• elected members - if members are not the final decision makers on service closure, they should be advised and consulted prior to closure;
• the financial viability of the provider must be considered, particularly if the local authority wishes them to continue to provide other services in their area.

2.26.3 The factors listed above are not exhaustive and the decision to withdraw funding should be based on a careful balancing act of all relevant factors.

2.27 Third Stage: Challenge to the Decision

2.27.1 Where the Care Commission has withdrawn registration from a provider the provider may appeal to the Commission. Providers to whom stage three applies have the right to challenge any decision, which may have serious affect on the service including the withdrawal of funding and local authorities should have an appeal mechanism. A right to review gives providers the right to present their case, and ensures that all relevant matters have been given consideration and so avoid expensive judicial proceedings.

2.27.2 To avoid Judicial Review, by the provider, or service users affected by the decision, it is imperative that all stages of the review process have been followed, that all relevant factors have been considered and that the reasons for the decision have been documented.

2.27.3 In a cross authority service review, the host authority will undertake reviews unless otherwise agreed. Local authorities may also consider using existing arbitration services if considered appropriate.

2.28 Third Stage: Action Planning

2.28.1 After the provider has been notified that funding will cease, the local authority and the provider should agree an action plan for the service. Where the local authority is the provider the lead officer for Supporting People and the manager of the service should agree the actions.

2.28.2 The action plan should cover the matters listed below and should identify who is responsible for completing tasks and the time scales. Normally one person or a team will be appointed to oversee the implementation of the plan.

• Notifying and involving service users, and potential service users of the service;
• Liaison with other relevant stakeholders, including statutory bodies, voluntary organisations and other providers who will be affected;
• Seeking alternative revenue streams, where appropriate;
• Alternative service provider, where appropriate;
• Decanting procedure, where appropriate;
• Communications strategy, to include press, service users, members and other stakeholders.

2.28.3 The responsibility for re-housing residents, where necessary will rest with the local authority within which the residents reside, or in the case of cross authority services, the placing authority.

2.29 Third Stage: Communications

2.29.1 Effective implementation of change requires good communicators and good technical expertise and resources.

2.29.2 Changes to a service need to be appropriately communicated to the service users, their carers and advocates and also to people who may be indirectly involved in the changes, for example staff, local media, members and other providers.

2.29.3 Generally, service users should be informed sooner rather than later of any proposed changes to the service.

2.29.4 Service users should receive:

• an explanation of the reasons for the change or closure of the service;
• an outline of relevant legislation relating to their security of tenure;
• information on home loss and disturbance payments (if applicable);
• information about any offers of alternative accommodation (unless a floating support service);
• an outline of the process and time scale of the process; and
• the name of a contact person for further information.

2.30 Third Stage: Seeking Alternative Revenue Funding

2.30.1 The provider may attempt to secure alternative revenue funding to continue providing non-accommodation based services as before. For example, an advisory service which may also be eligible for social work or health funding.

2.31 Third Stage: Remodeling/Reprovisioning/Reshaping the Service

2.31.1 In some cases the service may continue, without Supporting People funding but will need to change the nature of the service to do so. For example, a service may be viable providing intensive housing management and care instead of housing-related support, or the service may seek to serve a client group with lower support needs.

2.32 Third Stage: Service Closure

2.32.1 Sometimes service closure is the only or best option. This may be a temporary closure whilst the service is improved or remodeled, or a permanent closure.

2.32.2 The closure of a service may result in a requirement to decant or transfer tenants from the property, either temporarily or permanently whilst a service is remodeled or reprovisioned.

2.32.3 Many providers, who are also housing managers, already have a process for decanting, in which case that procedure is used.

2.32.4 Each decant needs a plan that is specific to that service. The plan takes into account a number of factors including the service users Tenancy Agreement as well as issues specific to the service being provided:

• security of tenure of the residents - having regard to the minimum lawful notice that must be served;
• the clients' vulnerability/dependency, and the effect of decanting on the their welfare. For example, the effect of closure of a short stay direct access hostel, a rehabilitation service, or support provided on a longer basis;
• the resident's length of stay in a service -for some people a temporary residence may have been their most secure accommodation for some time;alternative arrangements for provision of the service are in place;
• if applicable, consideration should be given to what assistance can be given to the resident in securing alternative accommodation and in resettlement; and
• residents' views on the proposed changes.

2.33 Third Stage: Compensation for Home Loss and Disturbance

2.33.1 Tenants who are decanted may be entitled to compensation, for example under the Land Compensation (Scotland) Act 1973, as amended by the Planning and Compensation Act 1991. Communities Scotland has issued guidance for RSLs - SHGN 2000/05 Home Loss Compensation Payments. The authority should ensure that users who may be decanted are provided with up to date advise on help and legal advise available to them.

SUPPORTING PEOPLE SERVICE REVIEWS: CONTEXT PAPER

Overview of Supporting People - no change in policy aims or strategic prioritie

1. Supporting People was introduced in April 2003-04 as the new integrated policy and funding framework for housing support services. Previously housing support services were funded from a number of sources including Housing Benefit, Special Needs Allowance Package and the Resettlement Grant. Supporting People offers funding for 21 defined services with the aim of helping people to move into accommodation and maintain independent living. Although the programme has sought to target resources on specific client groups (see below), any individual moving into a tenancy or maintaining a tenancy is eligible for assistance through Supporting People funding. Services are subject to registration and inspection by the Scottish Commission for the Registration of Care.

2. The Price Waterhouse Coopers report indicated that at least 84,000 places of support were being funded at the start of Supporting People in 2003-04. The management information returns for 2003-04 show that at least 140,000 clients benefited from the funding in that year. The programme seeks to offer these clients a better quality life and long term savings through reducing the number of vulnerable clients cycling in and out of the housing system and by reducing the need for high cost institutional care for those clients with relatively low housing support needs. Work has been done in England to track the benefits realised by Supporting People funding, but more work is needed in Scotland to effectively record and understand the benefits obtained from the programme at the national level and ensure greater transparency on outcomes from the funding invested. Major change to the programme, however, is not envisaged at this stage. Any significant change would be subject to extensive consultation.

Housing support services will continue to fulfil a range of different functions covering transitional, on-going and combined services

3. The 21 different services funded through Supporting People fall into 3 main categories - transitional, on-going and combined services. Transitional services assist with homelessness, women fleeing domestic violence, people recovering from substance misuse, refugees, and support for vulnerable young people or those at risk of re-offending. On-going support is provided through sheltered housing for the frail elderly, while Supporting People assists with the cost of combined support packages for people with learning or physical disabilities, mental health problems etc where clients may have higher needs beyond those that can be addressed purely through housing support.

The key client groups

4. The programme therefore provides support for a wide range of vulnerable people. No people are specifically excluded from assistance through Supporting People funding, and it is anticipated that eligibility for assistance will continue to be assessed locally. Local authorities will continue to be expected to focus resources on the following key client groups:

• the frail elderly
• the homeless
• those with physical or learning disabilities, or mental health problems
• those vulnerable due to young age or risk of re-offending
• those recovering from substance misuse or domestic violence
• refugees

Greater moves towards prioritisation based on need and risk

5. While the key client groups for the programme will remain unchanged, local authorities will be expected to ensure that resources are targeted on those most in need and most at risk. Local authorities will be expected to ensure, for example, that moves into supported accommodation, with service assistance from Supporting People funding, are only made where the individual's needs requires that level of support. In assessing those at risk without support, local authorities will be expected to take account of the availability of alternative funding from Social Work and other budgets in assessing the level of support required from Supporting People. Further guidance on risk assessment will be developed in partnership with external stakeholders.

Funding background - need to improve efficiencies

6. Reviews of the Supporting People programme in Scotland and England concluded that significant efficiency savings were possible. This was reflected in the baseline provided by Treasury for Scotland, although Scottish Executive Ministers agreed to provide significant additional resources to ensure that the level of efficiency savings required was manageable. The final 2004 Spending Review settlement for Supporting People provided funding of £407/399/401m between 2005-06 and 2007-08. This amounts to efficiency savings of 6% in the overall budget, although the redistribution of resources across Scotland means that some councils face greater funding reductions than that.

7. Comparisons on the unit costs of services in Scotland and England appear to suggest that unit costs for services to many client groups are considerably higher in Scotland than in England. There are many potential reasons for this disparity, including the possibility that more hours of support and better quality support are provided in Scotland. More work will therefore be done by the Scottish Executive to review the reasons for these apparent disparities. But Scottish Executive Ministers will expect to see evidence of improved efficiencies in Scotland in all councils, including those gaining resources as a result of the redistribution process.

8. The service review process will be crucial to the process of delivering improved efficiencies, both through ensuring that only strategically relevant services are funded and in ensuring best value for money from those services which are strategically relevant.

Monitoring and tracking

9. The programme needs to demonstrate improved efficiency before the next Spending Review in summer 2006. Failure to demonstrate improved efficiencies will inevitably affect the level of funding that the programme is likely to secure in Spending Review 2006. There is therefore a shared interest for local authorities, providers and the Scottish Executive in demonstrating improved efficiencies.

10. Effective monitoring arrangements are required to ensure that the impact of the funding adjustments are accurately recorded. Where councils gain resources, improved outputs will be expected in terms of numbers of clients assisted or levels of support provided. Where councils face funding reductions it is expected that these can be accommodated through improved efficiencies in terms of administrative and management overheads, securing better value for money on contracts and the closure or remodelling of services that are no longer judged strategically necessary. However if there is any adverse impact on the provision of useful strategically necessary front line services, including any reduction in the hours of service provided to clients, this should be recorded.

11. Local authorities will be expected to provide data to the Scottish Executive before the next Spending Review on:

• The level of efficiencies generated, including :
• • reductions in their own management / administrative overheads
  • remodelling or closure of non strategically relevant services
  • efficiencies generated in the services operated by the local authority directly and in those contracted out
• Impact on front line services
• Impact on service users
• Impact on levels of unmet need in the area

Key principles of review process

12. The Scottish Executive expects the following key principles to be at the heart of the review process:

SUPPORTING PEOPLE SERVICE REVIEW AND BUDGET CHANGE IMPACT MONITORING TEMPLATE

SECTION 1

BUDGET MANAGEMENT AND SERVICE PLANNING (INCLUDING REVIEW OF IMPACT ON SERVICE CAPACITY)

Section 1 to be completed twice a year (by 31 October and 31 March)

Please answer the following questions as comprehensively and accurately as possible

[All figures to be in £m, to three decimal places]

NARRATIVE ON IMPACT ON SERVICE CAPACITY

SECTION 2

REPORT ON PROGRESS WITH SERVICE REVIEW PROCESS

To be completed once a year (by 31 March).

Key review principles

Partnerships are asked to show they have followed the key principles in the Scottish Executive's guidance for the conduct of rigorous but fair reviews of local services:

• Strategic relevance and usefulness of every service objectively assessed
• Best value obtained
• Fairness and objectivity - improved efficiencies sought in a similar way, internally and externally by local authorities, for all services and administrative processes
• Transparency - in decision making and recording of decisions
• Good communication - decisions based on good information, with appropriate opportunities for providers to state their case and appeal ³, and kept fully informed of progress. Requests for information from providers should always be relevant and reasonable in terms of detail and time required to provide material.
• Sensitivity to impact on service users throughout process - review process must objectively review the relevance and usefulness of every service and its real impact on service users, but be sensitive to the concerns this process may raise for service users

Section 1 should be returned by 31 October 2005.

Section 2 (with an updated Section 1) should be returned by 31 March 2006.

Reports should be returned to:

John Somers
Regeneration, Fuel Poverty and Supporting People Division
Scottish Executive
1 G Victoria Quay
Edinburgh
EH6 6QQ
[Tel 0131 244 5524]

Footnotes

1 Community Care Providers Scotland (CCPS) publish an aid-memoir listing the various costs to be taken into account [CCPS March 2004: Service Costs2004-05]

2 See Supporting People Folder 2, Part Three: Section 2.27 - Challenge to the Decision.

3 See Supporting People Folder 2 Part Three Section 2.27 - Challenge to Decision

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