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3 IMPROVING FINANCIAL MANAGEMENT
PROVISIONS
Background
3.1 The Executive believes that appropriate solutions
should be in place for managing the finances of all adults
with incapacity who are unable to do so for themselves. Our
research indicates that current provisions do meet the
needs of many adults and those who care for them. However,
our research also revealed that certain provisions were not
well designed and some groups of adults have been left
without access to the level of support most appropriate to
their needs.
Current financial provisions
3.2 The range of provisions consists of: joint bank
accounts, continuing powers of attorney, intromission with
funds, financial intervention and guardianship orders.
These provisions or interventions, summarised below, are
designed to be proportionate to the complexity and amount
of funds to be managed.
- The use of a joint 'either or survivor' account, by
one account holder when the other becomes
incapacitated, is the simplest way to proceed. A
mandate for this type of account needs to be in place
whilst both signatories to the account are
competent.
- Individuals can also draw up a continuing power of
attorney and opt for powers granted, relating to
finance and/or property, to continue in the event that
capacity is lost.
- Intromission with funds is a means by which an
individual family member, friend or carer can have the
legal authority to access and manage the day to day
finances of someone who lacks the ability to do so for
themselves, due to mental incapacity or severe
communication difficulties. It is intended for use
where the adult has either moderate means (for example,
an occupational pension in addition to a state pension
and benefits); or whose finances are straightforward to
manage.
- However, where property, stocks and shares or, for
example, business interests are involved, an
application to the sheriff court for a financial
guardianship order may be required.
- An application may be made to the sheriff court for
an intervention order to make a one-off financial
decision. However, this does not enable the ongoing
management of funds.
3.3 Under separate legislation (reserved to the
UK Parliament) individuals or
organisations can apply to the Department for Work and
Pensions (
DWP) to become appointees to claim and
manage
DWP payments and benefits on behalf of
individuals who lack the ability to do so for
themselves.
Financial matters to be covered in a community
care assessment where the adult lacks capacity
3.4 The
AWI Code of Practice for Local
Authorities provides guidance on how the Act fits into
assessment and care management. The section "Matters to be
covered in assessment where the adult lacks capacity"
identifies an assessment of the adult's financial situation
as an essential element of a person-centred approach to
overall needs assessment. Assessment should consider the
following:
- Whether the adult has adequate resources and if so
whether they are being used to his/her benefit. If
resources are not adequate, could incapacity be
preventing the adult from accessing resources, and if
so, is an intervention under the Act necessary?
- Whether there are difficulties in the way the
adult's financial affairs are being managed, impacting
on personal welfare.
- Who, if anyone, has powers over the adult's
property and financial affairs? It could be a serious
infringement of the adult's rights if anyone is
exercising powers over his or her property or financial
affairs without proper authority or in excess of that
authority, even if the adult seems compliant.
Consultation
3.5 Our consultation in relation to financial management
issues is set out in
two parts:
Part 1
- sets out proposals to improve access to
intromission with funds for individuals wishing to provide
support; and for the benefit of those adults who have no
family or friends to act for them.
Part 2
- seeks information to assess the extent
and nature of the need for a 'financial guardian of last
resort'.
Part 1: Intromission with Funds (IwF)
Summary of the application process
3.6 Authority to intromit is granted by the Public
Guardian (
PG) to whom applications have to be
submitted. How the funds are to be spent must be stated on
the application form, along with a three year expenditure
plan. How the money is to be used will include, for
example, daily living expenses, care home charges, utility
bills. The application has to be countersigned by someone
within a specified class
e.g. a councillor, teacher or minister of
religion. The countersignatory has to have known the
applicant for at least two years and must also know the
adult.
3.7 The application must be accompanied by a medical
certificate stating that the adult is incapable of managing
their finances. Before authority is granted the
PG informs the adult and others with an
interest, for example, family members, to ask if there are
any objections. Once approved, the
PG issues a certificate of authority.
The person authorised to act is referred to as the
'withdrawer'.
3.8 The withdrawer takes the certificate to a bank or
building society to open a designated account. An agreed
sum is transferred on a regular basis from the adult's bank
account (referred to as the specified account) into the
designated account. The withdrawer must keep basic
financial records (
e.g. bank statements). These records are
subject to a random review by the
PG.
3.9 Withdrawers are not allowed to claim payment for
administering the adult's funds. However, costs associated
with making the application and out-of-pocket expenses may
be paid from the adult's funds if they have been included
in the application to the
PG. The current application fee is £35.
Medical practitioners can charge a fee for carrying out an
assessment and providing the certificate of incapacity.
3.10 The
OPG provides information, help and
advice to individuals wishing to make applications under
the Act. The
OPG also holds training days on
financial management interventions and will extend these to
support any changes which may be made to the parts of the
Act for which it has a duty.
Why are changes needed?
3.11 It had been estimated that possibly as many as
20,000 people per annum might benefit from intromission
with funds, but uptake is less than 200 people per year. We
have looked into the reasons for this. A number of barriers
have been identified by key stakeholders through the
Learning from Experience consultancy, a
stakeholders' day held by the Office of the Public Guardian
earlier this year, and other forums. It is unclear how the
original estimate was constructed. However, with only 200
applications per year, there must be many adults who are
not benefiting currently from this option, and who could do
so, which strongly suggests the need for change. We believe
that with some changes to the legislation and procedures,
IwF will offer the envisaged simple yet effective measure
to access and manage an adult's funds, while at the same
time safeguarding their interests.
3.12 There is general agreement on the issues to be
addressed. We have considered carefully the potential
solutions, some of which would require changes to the
legislation, whilst others could be achieved by
improvements to procedures. Procedural changes to improve
the smooth working of the scheme are being taken forward by
the Public Guardian.
Proposed changes to IwF
3.13 This part of the consultation paper builds on the
outcomes of the very positive meetings held earlier with
representatives from service users and carers'
organisations, local authorities, solicitors, banking
institutions and other bodies. These proposals form a
'package', designed to widen access to intromission with
funds.
3.14 Discussion and questions for consultation are split
into two parts:
- changes to make it easier for private individuals
to apply;
- changes to enable access to help individuals who
have no family or friends to act for them by allowing
organisations to apply.
3.15 We invite your views on any or all the questions
covered in this section. We also welcome views on whether
the term 'Intromission with Funds' should be changed to
something simpler. Whilst this technical term accurately
describes the provision, stakeholders have told us that it
is meaningless to the lay person. To confuse matters
further, the scheme is sometimes referred to as 'access to
funds' or as the 'withdrawer scheme' and at other times as
'Part 3'.
Proposed changes to make it easier for private
individuals to apply
3.16 Our consultations with key stakeholders, including
organisations representing the interests of service users
and carers, local authorities, solicitors, banking
institutions and others, identified the following issues
facing potential applicants.
Countersignatory issues
3.17 Three issues were identified as potential barriers
to uptake in relation to countersignatory requirements for
making an application.
Who should be able to be a countersignatory?
- One of the issues identified is that the existing
range of countersignatories is too narrow and not
accessible to many people
8. It may be that the current list of classes of
countersignatories is based on an outdated perception
of the attributes which attach to a member of these
classes. It is also not clear how members of these
classes can be assumed to have sufficient information
about an applicant to vouch for his/her suitability. We
understand that the original intention was that
individuals in the prescribed classes would hold
positions of responsibility and would have something to
lose, if they countersigned an inappropriate
application.
In any event, the classes, as defined, are not proving
to be accessible to individuals who might want to use this
part of the Act. There will also be examples of people who
would have sufficient information to countersign, but who
do not fall within the prescribed classes.
We therefore propose to make changes to the legislation
to alter how countersignatories are defined and the
requirements attaching to them. We propose that an
applicant will be able to ask
anyone they have known for at least 6 months to
countersign that he/she is a suitable person to act on
behalf of the adult. Prescribed classes would be discarded.
The person countersigning will have to state how they know
the applicant and for how long.
The rules relating to those
not allowed to countersign will stay the
same: a relative of the person residing with the applicant
or adult; or a director or employee of the applicant; or a
solicitor acting on behalf of the adult; or the medical
practitioner who has issued the certificate of
incapacity.
- Another issue affecting uptake is that the
countersignatory has to have known the applicant for at
least 2 years. This may not be realistic. For example,
the applicant may have moved in that time. We believe
that having known the person for at least 6 months
should be enough, if this is in a capacity whereby they
can vouch for his/her honesty, reliability and
competence to manage basic finances.
- That the countersignatory is required to 'know the
adult' has also posed a problem. This seems to serve no
useful purpose because the requirement for the adult's
doctor to assess the incapacity of the adult to manage
their finances should be sufficient.
The proposed 'package' of changes in relation
to countersignatories would mean that:
- an applicant would be able to ask anyone they have
known for at least 6 months to countersign that he/she
is a suitable person to act on behalf of the adult. The
person countersigning will have to state how they know
the applicant and for how long.
- the person countersigning would not need to know
the adult for whom the application is being made. This
is because an application must be accompanied by a
certificate of incapacity from a medical
practitioner.
3.18 It should be noted that the requirement for the
application to be countersigned is just one safeguard
amongst several others to protect the adult. The
PG must notify the nearest relative,
primary carer and others with an interest, about the
application and request their views on the appropriateness
of the type of application being made (as opposed to other
options under the Act), and the suitability of the
applicant. Any objections raised are heard formally before
a decision to grant or refuse the application is made. The
decision of the
PG can be appealed to the sheriff. The
PG is able to investigate where abuse
may be suspected.
Your views
1 Do you support the countersignatory proposals? If you
disagree with any of the proposals please say why.
Appointment of substitute or joint
withdrawers
3.19 Currently only one person may apply and act. If
he/she is unable to continue either temporarily or
permanently, there may be a lack of continuity, to the
detriment of the adult. Other provisions, such as
guardianship, do recognise this need and allow for the
appointment of a substitute or joint representative.
We are proposing that an application should be
able to include the naming of a substitute or joint
withdrawer, and that these could also be added at a
later stage.
Your views
2 Do you support the proposal to allow for the
appointment of substitute and joint withdrawers?
Management of a joint account where both
account holders have lost capacity
3.20 The IwF scheme is framed on the basis that an
account will be managed in the name of a sole account
holder only. Where there is a joint account and the second
signatory becomes incapable, then the withdrawer is unable
to act for both.
We propose to amend the Act to allow
intromission with a joint account, on behalf of both
account holders, where the second account holder has
become incapable and the first is already incapable of
managing their finances.
Your views
3 Do you support a change to allow for intromission with
a joint account on behalf of both account holders, in
circumstances where one and then the other becomes
incapable?
Managing accounts
3.21 Several issues have arisen relating to limitations
on: the setting up of a specified account; the management
of any saving type account that the adult may have; and the
transfer of funds between accounts. Whilst the scheme is
intended to help those of moderate means, its original
design did not take into account the range of circumstances
which may arise for adults whose affairs could be
classified as such. In reality it is not unusual for people
to keep their money in several small accounts and/or to
have a savings type account in which to deposit funds and
from which to withdraw funds.
We are proposing to change arrangements to allow
funds to be managed more flexibly, while maintaining
existing safeguards.
3.22 Current arrangements preclude the use of IwF where
the adult has multiple smaller accounts and has been using
these to meet living expenses. The Act allows access to
only one specified account at a time, which is untenable
where the adult's finances are spread over multiple
accounts
. We propose a change which would enable the
PG to authorise the consolidation of two
or more accounts into a single specified account at the
time the application is being made, or later if necessary
with the permission of the
PG.
3.23 It is not uncommon for adults to have a
pre-existing savings type account as well as a current
account. The Act does not allow money from a savings type
account to be moved into the specified account and accessed
through the designated account. There is an arrangement
which allows an application to the Public Guardian for
authority to use an existing account, or open a new
account, for putting money in
from the specified account, but not for
moving money
into the specified account. This does not
facilitate compliance with the Part 1 principles, in terms
of benefit to the adult, or recognition of their past and
present wishes where they had elected to have other
accounts in addition to their current account.
3.24
We propose to change arrangements to allow the
movement of funds between a savings type account, which
might be called the 'nominated' account, and the specified
account. This would, for example, enable the
specified account to be topped-up on a regular basis so
that the designated account does not 'run dry' (the
designated and specified accounts must not be allowed to
become overdrawn). 'Top-up' might be achieved through a
standing order arrangement with prior authorisation from
the Public Guardian at the point of application, or at some
later point, should it become necessary. Our proposal would
also enable lump sums to be moved from the nominated
account (or another account if appropriate) into the
specified account or the designated account. This would
require permission from the Public Guardian. To provide
further flexibility, the transfer of funds
from the specified account to another
account in the adult's name would no longer require the
express authority of the Public Guardian on each occasion -
a general authority to do this as appropriate would be part
of the IwF authority.
We propose allowing the Public Guardian to
authorise :
- the consolidation of two or more accounts into a
single specified account at the time an application is
being made or later if necessary with the permission of
the Public Guardian;
- the use of a pre-existing account, or setting up of
a new account, which might be called the 'nominated
account' from which money may be moved into the
specified account. This could include:
- the setting up of a arrangements to enable regular
payments from the 'nominated' account to the specified
account;
- lump sums to be moved from the 'nominated' account
or another account in the adult's name to the specified
account or the designated account to meet unanticipated
expenditure.
- the transfer of funds from the specified account
into another account in the adult's name as part of the
authority to IwF.
Your views
4 Do you support proposals to increase flexibility in
the management of accounts under IwF? If not, please give
your reasons.
Authorisation to open a bank account to
intromit with funds
3.25 Current provisions only enable IwF to be accessed
where there is a pre-existing bank account. This excludes
many adults who might otherwise benefit. For example, there
are a large number of young adults with learning
disabilities whose funds have been held for them 'in trust'
whilst they were children, but this arrangement ceases when
they reach the age of 16 years. Adults who have spent many
years in
NHS long-stay hospital care, now
discharged to supported accommodation in the community, may
also have no bank accounts. Another group may be older
people who have developed dementia. Individuals within
these groups often have modest incomes, and IwF would be
the most appropriate way to support their financial
management needs if a bank account was in place. The only
way the opening of a bank account can be achieved at
present is if an application is made to the sheriff court
for an intervention order to do so. This is considered
disproportionate to the action needed.
We propose allowing the Public Guardian to
permit the applicant, once authorised, to open a bank
account in the name of the adult for the purpose of
managing the adult's funds under the IwF
scheme.
Your views
5 Do you agree that the Public Guardian should be
empowered to authorise the opening of a bank account in the
name of the adult, so that the applicant can intromit with
funds?
Access to confidential financial
information
3.26 The applicant requires specific information about
the adult's financial affairs before the application form
can be completed. He/she has to draw up and submit details
of a three-year financial plan, and provide details of the
adult's account from which funds are to be transferred to
the designated account. In many cases family members will
have this information and there will be no problem
completing the application form. But this is not always the
case. One of the barriers to uptake is that there is
currently no means of authorising potential applicants to
access the necessary financial data from the adult's bank
or building society. The current wording of Part 3 of the
Act assumes that the person applying for authority knows
where and what account/s are held in the name of the adult
for which authority to intromit is sought, and about the
funds held.
3.27 The Act does not authorise financial institutions
to disclose information about an adult's account/s to
someone wanting to complete an application. In terms of the
Data Protection Act 1998 and the case "Tournier v National
Provincial and Union Bank of England (1924)", a bank is not
able to divulge information about a customer's account
without either the customer's consent or a court order.
We propose to amend the Act to empower the
Public Guardian to authorise:
- applicants to request the necessary information
from the adult's bank or banks;
- banks to release the requested information.
3.28 Where the applicant needs authority to access
banking data, the authorisation process would be designed
to protect adults from potential financial abuse. This
would be achieved by the creation of a two stage
application process described below.
Stage one
3.29 In stage one the
PG would make all the necessary checks
to ensure that the applicant is a suitable person to
intromit. This means:
- checking all the necessary details are completed on
the application form;
- checking from the medical certificate that the
adult concerned lacks capacity to manage their
finances;
- informing others, including the adult, about the
application and allowing three weeks for any objections
to be made.
3.30 Once the
PG is satisfied that everything is in
order and no objections have been made (or those that have
been made have been heard and settled) the
PG would give authorisation to the
applicant to request access to the adult's financial data
from the banking institutions used by the adult. This would
enable the applicant to progress to stage two.
Stage two
3.31 Stage two would require the completion of the
financial section of the application, following agreement
of which a certificate of authorisation would be issued.
This two stage process is likely to extend the overall
process by about four weeks. However, its purpose would be
to benefit many adults who cannot have their finances
managed in this way at the moment.
3.32 The stage two process would only be needed by
applicants who don't have access to all the financial
information they need to meet the requirements straight
away.
Your views
6a Do you support the proposal for the Public Guardian
to be able to: authorise applicants to request confidential
financial data from the adult's bank/building society for
the purpose of completing the IwF application; and
authorise banks to release the requested information?
6b Do you consider that the two stage process provides
an adequate safeguard to protect the adult from potential
abuse?
Proposed changes to enable funds to be managed
by an organisation where the adult has no family member
or friend available to manage.
3.33 Local authorities and care provider agencies have
reported that there are a significant number of individuals
who lack the capacity to manage their own finances, but
either have no family member or friend to manage for them
or anyone willing or able to do so. These groups include:
people with learning disabilities; people with mental
health problems who have been long-term residents in
NHS hospitals and recently transferred
to supported accommodation under community care
legislation; and older people with dementia living in their
own homes.
3.34 It was reported to the
Learning from Experience project that the majority
of these adults have only moderate incomes, normally from
small occupational pensions or supported employment,
therapeutic earnings, and
DWP benefits. Intromission with funds
would be the most appropriate intervention to support the
management of their funds, but under current arrangements
this can only be carried out by individuals.
Financial management support currently provide by
voluntary sector providers.
3.35 We understand that some voluntary organisations
have been providing financial management support as part of
the 'person-centred' service they offer. In the past, it
has been possible for 'in trust' accounts and other such
arrangements to be put in place to manage the funds of
these service users. Interventions under the Act were
intended to replace these practices. However, as already
noted, the lowest level of intervention provided by the
Act, IwF, has not necessarily been accessible for this
group. This can mean local authorities have to exercise
their duty to apply for a financial guardianship order. We
are aware that some local authorities, their voluntary
sector partners and other bodies providing financial
management support, are unhappy with this position because
(apart from cost) it contravenes the Part 1 principles: it
is not the minimum intervention necessary to benefit the
adult; and is viewed as disempowering for the adult, who is
no longer able to hold an account in his/her own name.
We propose extending the intromission with
funds scheme to local authorities and other
organisations to enable the management of funds for
adults living in the community who have no private
individual available to act. Our intention is to enable
maximum access whilst at the same time safeguarding the
adult. Applications by organisations would be subject
to all the same requirements and checks as individual
applicants.
Conflicts of interest and safeguards
3.36 It will be fundamental that a conflict of interest
should be avoided by organisations seeking to intromit, and
that even the appearance of a potential conflict should be
avoided as far as possible. A conflict of interest might
potentially arise where an organisation has multiple roles
in relation to the service user, for example, where the
agency: assesses need; carries out financial assessments;
provides services; makes a direct charge for services; has
a commercial interest in the provision of services.
3.37 The Act does not permit local authorities to
nominate themselves as financial guardians. However, local
authorities are allowed to become corporate appointees for
DWP payments. A few local authorities
have established or are developing 'arms-length' corporate
appointeeship schemes for the purposes of managing
DWP benefits, and for the management of
direct payments for community care services. We think this
type of arrangement is worth considering for the corporate
management of IwF.
3.38 Voluntary sector community care providers are often
contracted by local authorities to provide financial
management support to service users. As such, these
organisations don't normally have any involvement in
charging adults for services provided, thus eliminating one
potential cause of conflicting interests. Some voluntary
organisations also act as
DWP corporate appointees for service
users. Established practice and accountability systems are
therefore in place, which it may be appropriate to build on
for the management of IwF.
3.39 Similarly, those private care agencies contracted
by local authorities to provide health and community care
services could also be in a position to IwF, for those
particular clients.
3.40 A key question is whether private care agencies or
other commercial bodies should be able to IwF for adults
where the service is not part of a contract with a local
authority. In this situation the agency would be paying
itself for services from the adult's funds.
3.41 Any organisation seeking to intromit would need to
demonstrate that mechanisms are in place that minimise
risks which may emerge from a potential conflict of
interests
i.e. to ensure accountability and transparency
in relation to accounts held in respect of each
individual.
3.42 Further consideration would be needed of the
detailed operation of the scheme and of the measures
required to ensure safeguards are in place and
maintained.
Your views
7a) Do you support the proposal that organisations
should be allowed to intromit with funds? If not, please
state your reasons.
7b) Are there any considerations which would make
certain types of organisation unsuitable to IwF? If so,
please state what you think these would be.
Costs of an enhanced IwF scheme
3.44 If all the above proposals were to be implemented
additional costs would inevitably be incurred.
Office of the Public Guardian - IwF application
fee
3.45 The current IwF application fee has remained at £35
since it was introduced several years ago (the renewal fee
is also £35). An enhanced scheme would incur additional
administrative costs for the
OPG and an increase in the fee would be
necessary to maintain progress towards meeting the
objective that the scheme should be self financing. While
the uptake of IwF has been far lower than anticipated, this
has been offset in relation to the workload of the
OPG by a far greater number of powers of
attorney being submitted for registration. This is a
particularly welcome development, because it is the means
by which people can choose who looks after their affairs if
they become unable to do so themselves. However, it does
mean that additional staff would have to be recruited by
the
OPG if there is an expansion of the IwF
scheme. While the scale of expansion is uncertain, it would
have to pay for itself in a relatively short space of time.
Financial modelling by the
OPG suggests a likely future fee level
of around £60 would be necessary to cover the costs of an
improved, expanded scheme. It is important to remember that
it would cover a three year period. It is also likely that
the renewal fee at the end of the three year period would
be pitched at around £30, recognising that, whilst some
cases would not present many changes in circumstance,
others would.
Withdrawers' expenses
3.46 The scheme does not allow withdrawers to be paid
for administering the adult's funds. This is because the
scheme was designed to help family members and friends to
provide support for an adult whose assets are not
substantial. However, out-of-pocket expenses (
e.g. to pay for transport to visit the adult)
may be paid from the adult's funds if they have been
anticipated in the application to the
PG, and may include costs associated
with making the application.
We are not minded to change these arrangements
given that the scheme is designed to support those on low
incomes.
Proposal to change the title from 'Intromission
with Funds'
3.47 Carers and other stakeholders have told us that the
name, "intromission with funds" is not user friendly and
suggested that uptake may be low, partly because people
don't know what it means. It does not describe what the
provision is for. People authorised to IwF are currently
referred to as 'withdrawers' or 'intromitters.' We need a
better name for these supporters and invite your views.
We propose a change of title of the
intromission with funds scheme if a suitable
alternative can be found, and invite your
suggestions.
Your views
8a Please suggest an alternative name for 'intromission
with funds'
8b What do you suggest the name/title of someone
authorised to manage funds under IwF should be?
Part 2 - Financial guardian of last resort -
assessing the need
Introduction
3.48 This section discusses the potential gap in
provision of a financial guardian that arises where there
is no means - under the current legislation and existing
provider market - of meeting the assessed needs of an adult
with incapacity for financial management. The discussion
and questions in this section should be considered
alongside the proposals to improve access to intromission
with funds set out in the preceding paragraphs.
Current arrangements
3.49 Under Part 6 of the Act, an application can be made
to the sheriff for an
intervention or guardianshiporder. Intervention orders are usually
concerned with a one-off or time-limited action or decision
to be made on behalf of an adult. Guardianship orders are
intended for longer-term help or continuing management.
Guardianship and intervention orders are granted by a
sheriff following a court hearing.
Who can apply?
3.50 Private individuals and professionals, such as
solicitors, can apply for and be nominated as guardians or
interveners but local authorities also have statutory roles
and responsibilities. In particular, local authorities must
apply for a guardianship or intervention order where it is
felt to be necessary and there is no one else doing so. The
local authority, in the form of the Chief Social Work
Officer, can be nominated as the welfare guardian or
welfare or financial intervener. However, the local
authority is not allowed under the Act to exercise powers
of guardianship in respect of property or financial
affairs. Therefore, where it considers it necessary to
apply for financial guardianship, it must nominate someone
other than the Chief Social Work Officer, for example,
local solicitor. It is not always possible to find someone
to nominate.
There is therefore no statutory provision for a
financial guardian of last resort.
Background: financial manager of last
resort
3.51 The Scottish Law Commission (
SLC) report on incapable adults (1995)
9, which led to the 2000 Act, identified the need for
a financial manager of last resort for adults with no
family member or friend to act for them, and recommended
that the Public Guardian should have this function. The
government rejected this analysis on the grounds that "the
policy of the Scottish Court Service is to recover costs in
full, and it would not be possible to sufficiently recover
full costs in every case of modest means, which would be
inconsistent with a low cost or no cost scheme".
3.52 The government also considered at that time that
the package of financial interventions would be
comprehensive and there would therefore not be a need for
financial guardian of last resort.
Findings from the
Learning from Experience study and
response
3.53 The "Learning from Experience" report documented
limitations in Parts 3 and 6 of the Act. The issues which
emerged were: the low uptake of IwF by private individuals;
the restriction of the scheme to private individuals; and
the lack of an appropriate financial manager of last
resort, particularly for adults with modest means. The
available interventions have not adequately addressed the
needs of adults who have no individual family member or
friend to act for them, or for whom financial guardianship
has not been possible or appropriate. This is partly due to
changes in the culture and context for the delivery of
community care services since the inception of the
legislation; and partly due to 'design faults' in the
available financial interventions, particularly in relation
to IwF.
3.54 Hugh Henry, Deputy Minister for Justice, in his
response to the findings, announced the appointment of an
AWI National Practice Co-ordinator, to
take forward work on these issues. An early priority was to
convene a working group representing key stakeholders, to
look at the issue of lack of financial manger of last
resort and to assess the feasibility of various options.
The group was in touch with parallel work, led by the
Public Guardian, charged with identifying what improvements
would be needed to increase uptake of Part 3.
Outcome from the working group
3.55 The remit of the working group was to consider
three options for the provision of a 'financial manager of
last resort service' which had emerged from the
Learning from Experience consultancy. The group
was asked to advise on the feasibility of each. These
options comprised: the Office of the Public
Guardian/Accountant of Court; local authorities; and
specialist voluntary organisations. Each was considered
against the following framework for assessment:
- equity of access to service across Scotland
- efficient and effective use of resources
- budgetary implications
- setting and meeting standards of practice -
capacity to provide support and training
- conflicts of interest and whether/how they might be
minimised and managed
- delivery on principles
- legislative burden
- burden on statutory agencies
- sustainability.
3.56 The
OPG/Accountant of Court emerged with the
highest score, compared with local authorities and the
voluntary sector. Key factors in favour of the
OPG/Accountant of Court were:
familiarity with the management of funds for adults with
incapacity through the Accountant of Court's curatory
service and infrastructure; the
OPG's well established policies,
standards, procedures, training and expertise in this area
through supervision of financial guardianship since 2002.
The risk of a potential conflict of interest was seen to be
lower than for other agencies as the
OPG/Accountant of Court has no vested
interest in the funds to be managed, and has no role in
providing care services. At the same time, however, it has
to be recognised that
OPG was not designed as a service
provider but as a regulator; and that its entry into the
role of financial manager of last resort would represent a
significant departure, bringing with it the challenge of
separating the interests attaching to two very different
functions.
Next Steps
3.57 This work, which was mainly concerned with the
"who" element of any possible last resort service, was very
useful and will be returned to. However, what the task
group could not do was look at what the demand for a last
resort financial guardian would be, if the proposed changes
to improve access to Part 3 were to go ahead. Nor could it
look widely across the provider market to assess the extent
of possible failure in supply, the reasons for this, and
possible remedies.
3.58 We now need to assess not only the likely scale of
any residual need for a financial guardian of last resort
but also the nature of the cases which would be involved.
Information on this latter aspect will inform an assessment
of the skills, logistical arrangements, etc which the
provider of any last resort service would need to deliver.
The question of "who" can then be revisited.
Assessing residual need for financial
guardianship of last resort
3.59 We believe that the proposed improvements to
intromission with funds, and in particular the extension of
this to local authorities and other organisations, will
address the needs of many adults with modest resources.
Financial guardianship will, however, remain necessary
where an adult's needs cannot be met through other
interventions.
3.60 We have been considering the overall demand for and
supply of financial guardians in order to assess the
potential need for a 'last resort' service. It is useful to
think about cases as falling into three categories:
(i) Cases which are non-problematic in terms of securing
a nominated guardian, whether an individual or a
professional. These need no further attention in this
document.
(ii) Cases in which the estate is of moderate, or
greater, means but for which there is no private individual
willing or able to be nominated as guardian, and the local
authority has been unable to identify an appropriate
professional nominee such as a solicitor. The estate could
however support professional management if it could be
found. The problem in such cases is essentially one of
inadequate, or poorly distributed, supply of service
providers.
(iii) Cases in which the estate is modest but
guardianship is assessed as necessary nonetheless, due to
the complexity or severity of needs and where there is no
private individual willing or able to be nominated;
and in addition the estate value is such that it
is unlikely to be commercially viable for a professional
guardian to manage it. Such cases may suffer from multiple
difficulties: deficit in the provider market, poor
viability in terms of remunerating any provider, and
challenging requirements in terms of the skills required to
support the adult.
3.61 The second and third categories both reflect system
failures, but of different kinds. We think it is important
to distinguish between cases where unsatisfied need
reflects a deficit in "universal" provision (point (ii)
above); and cases where unsatisfied need reflects the
complexity of the case combined with the inadequate
purchasing power within normal market mechanisms - pointing
to some kind of "last resort" service (point (iii)
above).
3.62 If a last resort service is established, without
also addressing local deficits in the provider market (eg
in rural areas), there could be a risk of "drift" into the
last resort service of cases which are not intrinsically
commercially unviable but which, in the absence of any
alternative, are inclined to make a claim on the last
resort service.
3.63 Since cost recovery is obviously difficult in cases
where the estate cannot support market fees for
professional management, a last resort service would pose a
net cost to the
AWI system overall. To protect other
services under
AWI and to avoid escalation in the fees
charged for these, it would be imperative to minimise the
cases falling to any 'last resort' service and costs on the
public purse arising from such a service. All stakeholders
will therefore be keen to develop options for remedying
deficits in the supplier market (the second category above)
and to ensure the widest possible coverage of the
'universal' or market-based service. We believe that
universal provision is a good goal in its own right because
it is more likely to be achievable locally, whereas a last
resort service might have to be centralised.
3.64 We hope that through this consultation we will have
a much clearer view of the need for a "last resort"
service, which would help us design it appropriately.
Your views
9a Do you agree that, in considering the need for a
financial guardian of last resort, it is important to draw
a distinction between:
- cases where the challenge is to
identify a willing nominee and supply
is restricted or absent;
- cases where the
nature of the case makes it difficult
to attract a nominee on any commercial basis (supply
side constraints may also be present in such
cases)?
9b Do you think there is a gap in the 'universal'
provider market for guardianship at the moment,
i.e. are there cases which would have
supported the payment of a professional fee but where no
professional was available to administer the guardianship?
If so, please say why you think this gap arises.
9c Do you have any information on the scale of the gap?
(If so please state)
9d Would it be helpful to see any such gap in terms of
the market for wider community legal services? (The
Executive is currently consulting on publicly funded legal
assistance in Scotland. The consultation paper "Advice for
All: Publicly Funded Legal Assistance in Scotland - The Way
Forward" is available at
www.scotland.gov.uk;
e-mail orders:
business.edinburgh@blackwell.co.uk;
Fax orders 0131 557 8149; Telephone orders: 0131 622 8283
or 0131 622 8258.)
9e Do you have ideas about how the gap in the provision
of professional financial guardians in such situations
could be met? For example, would it be helpful to have a
central referral system for the allocation of a suitable
professional from a panel? Would that ensure a suitable
service even in remote areas?
9f What are the key features of cases which, even if a
referral and panel system were to be in place, would
require a guardian of last resort?
9g What would be the likely annual demand for a last
resort service for such cases?
9h Taking into account the nature and volume of last
resort cases, what kind of skills and organisational
arrangements would the provider of a last resort service
have to have?
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