Scottish Government

Chapter 5: Retrospective checks and fees

5.1 Introduction

190. This Chapter deals with two related issues: how individuals already in the regulated workforce on go-live become scheme members (retrospective checking); and how fees will be charged to cover the cost of operating the scheme. These issues are related as the volume of individuals joining the scheme will impact on the costs associated with its delivery which in turn will affect the fee level. During the Parliamentary passage of the Act, these two issues were the subject of extensive discussion and debate. Retrospective checking is a particular issue since, although the Scheme will be more streamlined and cost-effective than current arrangements, there will inevitably be an administrative burden for organisations in managing the transition. The issues explored in 5.2 represent the first step in developing a detailed implementation policy in this area. 5.3 explores possible approaches to how fees should be charged, though not, at this stage, the actual fees that will be charged. Draft statutory instruments in respect of both retrospective checks and fees will be the subject of further consultation in 2008.

5.2 Retrospective checking: whether and how?

191. From go-live, new applicants to the regulated workforce will be expected to become scheme members. There are, however, around 800,000 people in Scotland already employed in regulated work. How to ensure they join the Scheme, and over what time period, is the subject of this part of the consultation. The Act makes provision for this to be done in a phased way, including the flexibility for it to be achieved by organisation, type of work or even by geographical area ⁴⁵.

192. As stated earlier, scheme membership is not mandatory. However, it is an offence for an organisation (or personnel supplier) to offer regulated work to an individual barred from that work. ⁴⁶ The only way of establishing that this is not the case is for the organisation to request a scheme membership disclosure. This is the incentive to encourage individuals to become scheme members when they are being offered regulated work. However, it will not become an offence for an organisation to fail to remove a barred individual from their existing workforce until regulations are made making it so. That cannot reasonably be introduced until all organisations have had sufficient time to bring their existing workforce into the scheme.

193. What this means is that until these regulations are made, an organisation that continues to unknowingly employ an individual who has been barred would not be committing an offence. After retrospective checking provisions have been brought into force, the organisation would be committing an offence, because they should have ensured the individual was a scheme member and therefore not barred. Retrospective checking cannot begin until regulations have been laid before, debated and approved by the Scottish Parliament.

194. Three substantive issues are explored in this section:

• whether to have retrospective checking or simply rely entirely on natural turnover of staff to bring people into the new scheme; and, if there is to be retrospective checking:

• in what order to bring individuals onto the Scheme; and
• how long the process should take.

Whether retrospective checking?

195. The choice is essentially between some form of retrospective checking to expedite the transition to the Scheme or allowing natural turnover to take its course. After go-live, there will be three broad categories of people undertaking regulated work:

• Scheme members - i.e. individuals who have joined the workforce, changed post or taken on an additional regulated work role after go-live. For individuals doing several jobs within the scope of regulated work, this category subdivides into:

(a) full participation - individuals who have been checked for all their posts;

and

(b) partial participation - individuals who undertake regulated work in more than one position but have been checked for only some of their posts.

• Individuals with an old disclosure certificate - i.e. individuals who have undergone either a standard or enhanced disclosure check prior to go-live; and
• Unchecked individuals - i.e. individuals who have never been checked under the scheme or through standard or enhanced disclosure.

196. Over time, natural turnover will lead the majority of people in the final two categories to become scheme members and bring individuals in partial participation to full participation.

197. A key consideration in deciding if there should be a process of retrospective checking is to balance the additional administrative burden against risk. The partial Regulatory Impact Assessment attempts to quantify the additional administrative burden, and the qualitative considerations are set out below. There is clearly a risk in having significant numbers of individuals outwith the Scheme, or only partially participating in it. The principal aim of the Act is to improve the protection for vulnerable groups. Organisations with individuals doing regulated work for them outwith the scheme risk being unaware if this person is subsequently determined to be unsuitable, because the Scheme has not registered their ongoing interest in the individual. With this risk in mind, whether or not there is a formal programme of retrospective checking, some organisations may make their own arrangements to quickly introduce their workers into the Scheme.

198. It is difficult to estimate the rate at which participation would increase through natural turnover because the labour market is highly complex and it is impossible to obtain definitive information about turnover. There are a number of different statistics available indicating the level of workforce turnover across the Scottish economy. A relatively high turnover rate of 30% per annum, applied uniformly, would result in around 97% of the workforce becoming scheme members after ten years. It is not expected that the presence or absence of retrospective checking would itself influence turnover rates in the regulated workforces.

Challenges with natural turnover

• relying on natural turnover to bring individuals onto the Scheme increases the risk to vulnerable groups because it is slower than retrospective checking;
• some individuals who are aware that relevant information is held about them may deliberately avoid joining the scheme by not changing post; and
• Scotland would be out of step with the rest of the UK which will have a system of retrospective checking (although this is not a cross-border loophole because any individual moving to Scotland to do regulated work would be expected to join the Scheme).

However, natural turnover virtually eliminates any additional administrative burden.

199. In the absence of any planned programme of retrospective checking, there is a risk that the scheme could be overwhelmed by early applications from proactive employers, which would be impossible to plan for. Technically, organisations could be prohibited from doing this by commencing some or all of the provisions in the Act in a phased way, e.g. rolling the Scheme out geographically across Scotland or for particular purposes only ⁴⁷. However, it would not be desirable to discourage employers that were keen to exploit the protections that the Act affords. Instead, it may be possible to prioritise those applications relating to recruitment decisions above those seeking scheme membership disclosure for an existing member of staff. The latter could be held in a queue and processed as and when there was capacity to do so.

Q 17a: Should scheme membership be phased in through:

• natural turnover?
• a managed process of retrospective checking?

Please explain your preference.

Q 17b: If natural turnover was selected as the most appropriate option, would your organisation:

• make arrangements to expedite scheme membership for your staff?
• allow turnover to complete this process over time?

Options for retrospective checking

200. It is obviously not feasible for all individuals doing regulated work to join the scheme on day one, so any retrospective checking would need to be managed over a period. There are a wide range of options for managing the process, which are explored further below. Assuming that the provisions in the Act are to be fully implemented, the registered workforce would need to be introduced to scheme membership in a managed way. The three objectives which need to be balanced are:

• maximising the protection for vulnerable groups;
• minimising the administrative burden for organisations; and
• planning the transition to give the scheme a manageable and predictable workload.

201. The remainder of this section explores three key issues that would need to be resolved to implement a managed programme of retrospective checking:

• when retrospective checking should begin;
• how it should be prioritised; and
• what the duration of the retrospective checking period should be.

When to begin retrospective checking

202. If the scheme were to operate purely on the basis of natural turnover for three years, with a turnover rate of 30%, almost two-thirds of the workforce would have joined the scheme by the end of that time. The administrative burden of a programme of retrospective checking for the remaining third of the workforce would be significantly reduced for both organisations and the scheme itself.

Q 18a: Should the period of retrospective checking be delayed until such time as a proportion of the workforce have joined by natural turnover?

Q 18b: If yes, how long should this delay last and why?

Prioritising retrospective checking

203. Any programme of retrospective checking needs to be managed to allow organisations to plan for, and cope with, the administration of the process. It is anticipated that this could be done by setting a series of deadlines by which particular groups of individuals should become scheme members. This would allow the scheme's workload to be anticipated and managed on a month-by-month basis provided that the size of each group was well known.

204. There are three broad options for managing retrospective checking of the workforce:

Option 1 - By date since last disclosure

205. This option means first considering individuals who have never had a disclosure check followed by date of check for those individuals who have had a disclosure check.

Benefits:

• prioritises individuals on the basis of risk, based on the assumption that individuals whose record has never been disclosed represent an unknown risk;
• good match with existing retrospective checking activity by organisations; and
• matches proposed approach for the scheme covering the rest of the UK.

Challenges:

• could be hard to identify those who have never had a check; and
• workload for the scheme might be difficult to estimate.

Option 2 - By sector or occupation

206. This option means considering individuals by: geographical area (e.g. council area); sector (e.g. social work); employer (especially larger employers), or a combination of factors. For example, a window for all individuals working with children or protected adults in a given council area to apply to become scheme members could be set. This model could also be used to require individuals in the statutory sector to become scheme members before individuals in the voluntary sector.

Benefits:

• easy to understand and work out sequencing;
• predictable workload for the scheme based on workforce numbers; and
• highest risk occupations could go first.

Challenges:

• potentially unfair on organisations who go first, since later organisations will benefit from some of their staff already having become scheme members;
• geographical criteria likely to be difficult to apply for larger organisations in particular; and
• offers differential protection to individuals in the same situation across the country during the transition.

Option 3 - By individual characteristic

207. This option means considering individuals by some random personal characteristic, such as month of birth. Month of birth would give a simple means of dividing the total workforce into 12 broadly equal portions without revealing any personal information. Using month of birth would spread the burden evenly across all organisations, but would require each to be in the same state of readiness at the outset of the programme.

Benefits:

• Easy to understand and to check compliance, since date of birth is routinely supplied with applications to join the scheme.
• Fair on organisations since the burden will be evenly spread.
• Predictable workload for Disclosure Scotland and the CBU.

Challenges:

• Relies on individuals and organisations to identify who should join at what time.
• Requires all organisations to participate from the outset.
• Arbitrary process which cannot take any account of different levels of risk.

208. It is possible to combine aspects of each of the three options in many different ways. For example, the statutory sector could be processed by date of last disclosure and the voluntary sector by random characteristics of the individual. Equally, retrospective checking of the statutory sector could begin with immediate effect, whereas there could be a delay before beginning retrospective checking for the voluntary sector. However, the more complex the process becomes the greater the potential for confusion.

Q 19: If retrospective checking is to be undertaken, which of the options for prioritising retrospective checking of individuals do you prefer?

• by date of last disclosure
• by sector
• by random personal characteristic
• other (please specify)

Please explain you preference.

Duration of the retrospective checking period

209. The previous discussion gives an indication of the potential challenges for organisations and the Scheme in managing the process of retrospective checking. One of the most significant factors in the size of the challenge is the time from beginning retrospective checking to completing it. The Financial Memorandum that accompanied the Act assumed a duration of three years because it was believed to be the fastest viable transition which could be managed and there was a desire to maximise the protection for vulnerable groups. However, the three year figure stimulated much debate during the parliamentary passage of the Act, with concerns raised about administrative capacity, particularly by smaller organisations.

210. Three years remains the shortest possible time for the whole workforce to join the Scheme. The issue is how much longer to allow whilst still meeting the objective of maximising protection. After three years of natural turnover around two thirds of the workforce would be scheme members and after 10 years around 97% would be scheme members. Compliance is unlikely to reach 100% in any event so, to be worthwhile, retrospective checking needs to begin and end within 10 years of go-live. Based on evidence given during the passage of the Act, and depending on the option chosen for ordering retrospective checking, the administrative burden should be very modest for periods exceeding six years.

Q 20a: If there is to be a period of retrospective registration of the regulated workforce onto the scheme, which of the following options would you prefer:

• retrospective checking over three years
• retrospective checking over four years
• retrospective checking over five years
• retrospective checking over six years
• three years delay followed by three years retrospective checking
• four years delay followed by two years retrospective checking

Please explain your preference.

Q 20b: What would be the impact of a quick programme of retrospective checking be on your organisation?

Q 20c: What difference would it make if the phasing-in period was significantly extended

5.3 Fees levels and charging regime

Introduction

211. The Act provides flexibility for a wide range of possible charging regimes ⁴⁸. The policy intention is that the overall costs of operating the scheme should be covered in full by the charging of fees. Fees for volunteers in the voluntary sector will continue to be paid by the Scottish Government, as now. Therefore, this consultation is not about how much revenue should be raised (since that is determined by operating costs) but the way it is collected.

212. At present, all types of disclosure - basic, standard and enhanced - attract the same fee of £20 and only one type of disclosure (enhanced) is relevant to the vulnerable groups workforce. But with the creation of a scheme and a number of new types of disclosure, there are new possibilities for charging regimes.

213. Whatever charging regime emerges from this consultation exercise, no final determination can be made about fee levels until the costs of the Scheme are known to a greater accuracy than at present. These will be influenced by a number of factors set out in this consultation paper, including the determination process ( chapter 3) and the approach to retrospective checking (chapter 5.2), as well as by decisions on the staffing levels and IT solution to support the Scheme. Attempting to give a definitive fee level now would be unwise, but the Scottish Government must take account of a number of factors set out in legislation when setting fees. ⁴⁹ A draft statutory instrument setting out the charging regime and actual fees will be consulted on in 2008. Furthermore, after go-live, the Scottish Government will have to report annually to the Scottish Parliament on the Scheme ⁵⁰. This will include discussion on the charging regime and fee levels.

214. The purpose of this section is to seek views on the most appropriate charging regime. Whatever charging regime is ultimately adopted, it must:

• cover the costs of the scheme;
• be simple to understand;
• be fair and considered to be fair;
• prevent unnecessary over-use of the scheme by employers;
• be consistent with encouraging volunteering;
• not place a barrier to work, especially for the low paid; and
• offer good value, especially for frequent users.

Stakeholders are asked to consider what follows against these objectives and their own particular needs.

Charging regimes

215. Two principal charging regimes are explored:

• Option 1 - Two Tier - fees payable per disclosure
• Option 2 - Annual Subscription - fees payable for membership

These options are mutually exclusive when used in combination but would be too difficult to manage if individuals moved between employers using different approaches.

216. It is not proposed that the fee levels for basic, standard or the residual enhanced disclosures will be affected by the introduction of the scheme.

Option 1 - Two Tier - fees payable per disclosure

217. In this option, fees are charged for statements of scheme membership and all types of scheme disclosure ( see chapter 1) but not for anything else. Two variations on this option are summarised below:

• (1a) fees depend on the type of disclosure check; or
• (1b) high fee for joining/first check and lower fee thereafter.

Option 1a - fees depend on type of disclosure check

General rules

218. Fees will be charged as follows:

Higher tier:

• all initial applications to the scheme
• scheme record disclosure.

Lower tier:

• short scheme record disclosure; and
• disclosure of scheme membership (assuming that the individual is already a scheme member).

219. The fees would be the same regardless of whether the individual is applying to join one or both workforces. However, an individual who is a member of one workforce then subsequently applies to join the other would need to pay the full fee again as any information held about them would only have been considered against the workforce they were in.

220. Scheme membership will last for 10 years as a means of ensuring that identity information is up-to-date. It will be renewed every time a higher tier fee is paid and the applicant confirms that basic identity information is still current.

Exceptions and special provisions

221. The following exceptions and special provisions apply:

• the fees for voluntary sector organisations requesting checks in respect of volunteers will continue to be paid by the Scottish Government ;
• a request for a scheme record disclosure as a result of a short scheme record disclosure revealing the fact of new information will only attract the fee to make up the difference between the higher tier and lower tier; and
• individuals who are already members of the SVG scheme (to do regulated activity in England, Wales or Northern Ireland) will be charged the lower tier fee for joining the Scottish scheme but will receive a scheme record disclosure.

Figure 1 illustrates this charging regime graphically.

Figure 1. Summary of two tier charging regime (option 1a)

Fee levels

222. The levels for the higher and lower level tier depend on:

• the number of requests for each type of check;
• the costs of operating the Scheme and, consequently, the amount of revenue which needs to be raised through fees; and
• the policy choice as to the differential between the levels.

223. It is proposed that a modest differential in the range of £5 to £20 should be set between the tiers and initial estimates and modelling suggest this would mean:

• a higher tier fee in the range £20-£30; and
• a lower tier fee in the range £10-£15.

Use of short scheme record disclosures

224. Short scheme record disclosure is designed to be made available on-line, supported by appropriate security measures, thus offering the benefit of immediate confirmation that the individual is a scheme member. In the vast majority of cases, the short scheme record disclosure will indicate that there is no new information and no further steps will be necessary. But where the fact of new information is revealed through short scheme record disclosure, most employers will want access to that information. Employers requesting a scheme record disclosure after having accessed a short scheme record disclosure that indicates new information would only pay the difference, so the total cost would be the same as a full scheme record disclosure. As around 90% of records will contain no information, this means that most disclosure checks would be significantly cheaper than at present.

Option 1b - all subsequent checks at lower tier

225. A variation on the two tier regime described above is to charge the higher tier fee only for joining the scheme and to charge all subsequent disclosures at the lower tier. An unintended consequence of this could be to generate additional demand for full scheme record disclosures since there would be no price difference between the short scheme record disclosure and scheme record disclosure. Stakeholders' views on this potential variant would be welcome.

226. This variation could be taken to the extreme of a single upfront fee for scheme membership with no subsequent fees for disclosures. However, there are some significant disadvantages:

• the joining fee could be quite high, possibly up to £70, which could be difficult to manage for individuals and organisations;
• almost the entire scheme's revenue comes during the transition period with only new entrants providing revenue after that; and
• there is no financial disincentive to limit excessive requests for disclosure from organisations.

For these reasons it is not proposed to pursue this as a viable option.

Option 2 - Annual Subscription

227. In this option, scheme membership is funded through an annual subscription, paid either by the individual or employer, with all disclosure checks being provided at no further cost. The fees for an annual subscription are proportionately higher than the two tier regime. The reason for this is that the costs for operating the scheme are substantially front loaded, i.e. checking identity, establishing a scheme record and matching the individual against any vetting information. In the two tier charging regime, this is compensated for by the higher tier fee being charged to join the scheme and lower tier fees being available for up to 10 years following. However, in the annual subscription charging regime with a fixed annual fee, it has to be recognised that some individuals will leave the scheme and stop paying a subscription at some point within the ten year period.

228. There are also additional costs associated with collecting the annual subscription, e.g. managing 800,000 direct debits and handling non-payment of subscriptions, that are not present in the two tier charging regime.

229. Based on current best estimates, the subscription would be likely to be around £10-£15 per year. But with all disclosure checks being free, there could be higher volumes of disclosure requests which would act to raise costs and push the subscription fee higher.

230. Subscriptions for individuals doing regulated work solely as volunteers in the voluntary sector would be paid by the Scottish Government (see below) but those who were also in paid employment would need to pay their subscription.

231. The principal benefits of an annual subscription are that

• the costs are predictable for individuals and organisations;
• the revenue for the scheme is smoother and more predictable;
• it avoids any upfront costs acting as a barrier to entry to regulated work; and
• as there is a continuing relationship with the individual, there is no need to set a time limit for scheme membership.

232. There are some significant challenges to a subscription model:

• who pays (reimburses the individual) in cases where there are multiple employers with a policy of meeting the costs of disclosure;
• complexity of processing annual payments for 800,000 scheme members, including handling non-payment; and
• no disincentive for excessive requests for disclosures.

Q 21a: Which of the charging regimes do you prefer?

• Two Tier
• All subsequent checks at lower tier
• Annual Subscription
• Other (please specify)

Please explain your preference.

Q 21b: What do you feel the maximum acceptable level for the higher tier fee should be (to keep the lower tier as low as possible or free)?

Q 21c: To what extent does the level of fee affect your answer? (E.g. you prefer a subscription model if it's less than £x / year.)

Free checks for volunteers

233. Currently the fees for enhanced disclosures for volunteers working in the voluntary sector are paid by the Scottish Government. This arrangement will continue under the new scheme. However, this opens a potential loophole. Individuals or organisations who do not qualify for free checks could obtain free scheme membership through volunteering prior to the deadline for retrospective checking. While this might have the real benefit of encouraging genuine volunteering, it could equally well be abused, with the disclosure being obtained but no real volunteering activity taking place. Either way, it would reduce the overall revenue to the Scheme which would need to be met through higher fees for everyone and/or increased subsidy from the Scottish Government.

234. It is proposed that in the two tier regime, the higher fee would be charged for an individual who is a scheme member through voluntary activity entering paid regulated work for the first time. Similarly, on entering paid employment in the annual subscription regime, the exemption for volunteering in the voluntary sector would cease to apply.

Q 22: Should individuals who become scheme members through volunteering be required to pay a fee for joining the scheme if and when they join the paid workforce?