SWSG Guidance Package, Index Ref F.19

12 August 1991

Dear Colleague

COMMUNITY CARE: REVIEW OF LOCAL AUTHORITY RESIDENTIAL ESTABLISHMENTS

Summary

1. This Circular advises local authorities of matters which they should consider when reviewing their policy on the provision of residential care for adults. It is issued under section 5 of the Social Work (Scotland) Act 1968. Attached at Annex A is the Secretary of State’s direction on the financial responsibility for existing residents in any homes which local authorities transfer to other forms of ownership or management.

Background

2. The guidance builds on the references in the White Paper "Caring for People" to the need for local authorities to review their residential homes provision. It forms part of a package of measures which the Government is introducing in the light of its decision to phase implementation of its community care proposals. The guidance draws attention to the range of matters to which authorities should have regard in considering any such changes.

3. Detailed application of policy on the provision of residential homes is for individual authorities to decide in the light of their own circumstances after satisfying themselves that any changes they intend are consistent with their auditable obligations in respect of probity, efficiency and effectiveness, as well as the law.

White Paper and Policy Guidance

4. The Government’s policy on residential care is an integral part of its policy for community care generally, as set out in "Caring for People". This seeks to promote choice and independence, to improve and safeguard the quality of services, to make better use of resources and to provide care in a homely environment in the local community. One of the Government’s key objectives is to promote the development of a flourishing independent sector alongside good quality public services. To achieve this local authorities should increasingly become "enabling" agencies rather than providers of services, making the maximum possible use of private and voluntary providers to increase the available range of service options and widen consumer choice. Local authorities will, of course, continue to play a valuable role in the provision of services, but in those cases where they are still the main or sole providers of services they will be expected to take all reasonable steps to secure diversity of provision. Where direct provision may continue to be needed the White Paper

stated that the Government will expect local authorities to retain the ability to act as direct service providers, if other forms of service provision are not forthcoming or are unsuitable. One of the key elements in authorities’ community care plans will be their proposals for stimulating the private and voluntary sectors in their areas.

Duties of Local Authorities

5. Local authorities in Scotland have a general duty under section 12 of the Social Work (Scotland) Act 1968 to promote social welfare for persons in their area. Under section 59 of the same Act they have a duty to provide residential or other establishments, either at their own hand or by arrangement with another authority, or to secure the provision by voluntary organisations or other persons. Section 13B of the 1968 Act and section 7 of the Mental Health (Scotland) Act 1984 empower authorities to provide, amongst other things, residential care in particular circumstances. In the White Paper it was stated that the Government expected local authorities to remain providers of care facilities but should move further towards an enabling role.

6. From 1 April 1993, when section 57 of the NHS and Community Care Act 1990 is due to be brought into force, authorities will not be able to provide accommodation to people ordinarily resident in private or voluntary homes immediately before that date. New section 86A of the 1968 Act, inserted by section 57 of the 1990 Act, gives the Secretary of State power to make exceptions by regulation. In taking this power Ministers had in mind its use, for example, to exempt people who would be homeless if a home were to close.

Local Authorities’ Review of their Residential Home Provision

7. In the light of the White Paper, it is right for authorities to review the total provision in their areas of residential care (public, voluntary and private) for all client groups in the context of their estimates of the needs of their population in the medium and long term. They will need to take account of the range of residential care provision likely to be needed and determine the balance of provision between the statutory, private and voluntary sectors so as to ensure that a full range of care is provided, that this offers maximum choice to consumers and achieves best value for money. In conducting their reviews, authorities should give full weight to the advantages of moving in a considered and purposeful way towards greater diversity of residential home ownership and provision, while continuing to fulfil their statutory duties. The Government believes that these are matters which need to be considered thoroughly as part of the planning and delivery of community care: authorities should not put the objectives referred to previously at risk by making hasty decisions, possibly for the wrong reasons. They must also have full regard, particularly at the transitional stage of ownership change, to the welfare and wishes of the residents in any homes to be transferred.

Status of Existing Residents in Transferred Homes

8. The transfer of the management or ownership of a local authority home to the private or voluntary sectors does not in itself alter the status of the existing residents. They were placed in the home by the local authority and must be regarded as continuing to be resident in the home under arrangements made by the authority. This will be the case unless there has been a change in the residents’ circumstances so that the duty under sections 12 and 59 of the 1968 Act no longer applies. This may occur, for example, because a resident’s condition improves and residential care is no longer needed. The Secretary of State has made a direction (reproduced at Annex A) under section 5 of the Social Work (Scotland) Act 1968 requiring authorities to continue to make arrangements for the care of people resident in a home at the time of transfer to another body and continuing to reside in that home. The direction extends to any transfer of ownership or responsibility for the management of an establishment after the date of its coming into effect and applies to persons normally resident in the establishment, including those temporarily absent through, for example, admission to hospital or other circumstances. It does not extend to persons temporarily resident in the establishment, eg for a period of respite care.

9. The direction complements an amendment to the Income Support Regulations (see below) to ensure that the present financial arrangements for existing residents are retained following the transfer of a local authority home to the private or voluntary sectors. Both the direction and regulations are effective from 12 August 1991. Neither has retrospective effect.

Social Security Regulations

10. The Income Support (General) Amendment (No 5) Regulations 1991 (SI 1991 No 1656) provide that existing residents of (or who are temporarily absent from) a local authority home at the time it is transferred to an independent body will continue to be treated as being in local authority residential accommodation for Income Support purposes, so long as they remain in the accommodation and the local authority is under a duty to make arrangements for providing accommodation for them. Neither these regulations nor the Secretary of State’s direction removes the medium-term financial incentive to changes of ownership in suitable circumstances.

Statutory Obligations

11. The selling or disposal of certain assets by local authorities and their ability to assist organisations providing social work services are governed by a number of measures. The main provisions are described in the Annex B. Authorities are reminded that they will need to obtain their own legal advice on any proposals they may be considering.

Action

12. Local authorities are accordingly invited to review, in terms of the circular, the provision of residential care for adults and should they consider transferring the management or ownership of any homes to other parties to note the requirements of the Secretary of State’s direction on the financial support of existing residents in such homes.

Enquiries

13. Please direct any enquiries about the substance of this circular addressed to Mr Trevor Hall, Social Work Services Group, Room 44, James Craig Walk, Edinburgh EH1 3BA (telephone: 0131-244-5455).

Yours faithfully

GAVIN ANDERSON

ANNEX B

SALE OR DISPOSAL OF ASSETS BY LOCAL AUTHORITIES ASSISTANCE TO VOLUNTARY ORGANISATIONS

Disposal of Land or Buildings

1. Under section 74 of the Local Government (Scotland) Act 1973, authorities may, subject to Part II of the Town and Country Planning (Scotland) Act 1959, dispose of land and buildings held by them in any manner they wish. They are required, however, to obtain the consent of the Secretary of State where the disposal would be for a consideration less than the best that could reasonably be obtained.

Assistance to Voluntary Organisations

2. Authorities planning to offer assistance to a voluntary organisation taking over a home should have regard to the provisions contained in section 10(3) and (4) of the Social Work (Scotland) Act 1968. Section 10(3) enables authorities to make contributions by way of grant or loan to any voluntary organisation the sole or primary object of which is to promote social welfare. Section 10(4) enables local authorities to make available to a voluntary organisation the use of the local authority’s premises, equipment and the services of its staff in such premises. It is for local authorities to consider the scope of any limitations placed on these powers but while the provisions of section 10(3) would enable local authorities to give grants to organisations providing social work services there is doubt that they could be used to fund specific placements in a residential home.

Transfer of Staff of Homes

3. Authorities should also consider carefully the position of the staff of homes to be transferred and should seek legal advice on their ability to transfer staff with the homes, second them, or reach some other arrangement for their employment. In this context authorities will wish to have regard to the provisions in section (10(4) of the 1968 Act (as it applies to staff) and section 1 of the Local Authorities (Goods and Services) Act 1970 which govern the assistance authorities can give to voluntary and other organisations.

4. The liability of authorities to make redundancy payments to any staff transferred with the homes in which they currently work will also need to be considered. The individual circumstances of each home (for instance, whether the home is considered to be a commercial undertaking), whether the transfer will be the sale of a business or the sale of an asset, and the provisions of section 94 of the Employment Protection (Consolidation) Act 1978, can all be relevant. Authorities are strongly advised to consult their legal advisers on these matters.

Promotion of Bodies to Acquire Homes

5. Section 59(1) of the Housing Associations Act 1985 enables a district or regional council to promote the formation or extension of or, subject to section 60 (assistance restricted to registered housing associations), assist a housing association whose objects include the erection, improvement or management of housing accommodation.

Compulsory Competitive Tendering

6. A local authority must comply with certain requirements in Part I of the Local Government Act 1988 before it can enter into an agreement which involves the provision by that authority to another body of a service which falls within the definition of a "defined activity". Detailed definitions of "defined activity" are contained in section 2 of, and Schedule 1 to the 1988 Act. This means that the provision of, for example, catering services by a local authority to a home which has been transferred would constitute a "works contract", as defined in section 3 of the 1988 Act, and that an authority could not enter into such a contract unless the conditions specified in section 4 of that Act had been fulfilled. It would be for the transferred home to decide in the first place whether it wished to invite the local authority to bid for the work. Authorities should also note that building cleaning work carried out in residential establishments as they are defined in the Social Work (Scotland) Act 1968 does not fall within the defined activity of building cleaning. The provisions of Part III of the Local Government Planning and Land Act 1980 regulate maintenance work carried out by local authorities for other bodies and should also be taken into account where appropriate.

Restrictive Trade Practices

7. Transfer arrangements might involve local authorities imposing conditions on the body taking over control of the residential care home (for instance the authority may insist on having first option on placing residents) and vice-versa (for instance authorities may be restricted from operating a residential care home within a certain distance of the transferred home). Authorities are advised to consult their legal advisers on how such circumstances may be affected by the Restrictive Trade Practices Acts 1976 and 1977.

ANNEX A

RESIDENTIAL ACCOMMODATION PROVIDED BY LOCAL AUTHORITIES: DIRECTION

The Secretary of State, in exercise of the powers conferred by section 5(1A) of the Social Work (Scotland) Act 1968 [ a) 1968 c.49. Section 5(1A) was inserted by section 51 of the National Health Service and Community Care Act 1990 (c.19).] a) , and all other powers enabling him in that behalf, hereby gives the following direction to local authorities.

1. This direction shall apply to cases in which a local authority makes arrangements for providing residential accommodation for any person, other than for a child, in accordance with their functions under section 12 (as read with section 59) or Section 13B of the 1968 Act, or section 7 of the Mental Health (Scotland) Act 1984 [ b) 1984 c.36.] b) and -

(1) the residential accommodation is local authority accommodation provided pursuant to section 12 (as read with section 59) or section 13B of the 1968 Act, or section 7 of the 1984 Act.

(2) the person is accommodated in the residential accommodation immediately before the transfer to which sub-paragraph (3) of this paragraph applies;

(3) the local authority transfer the management and provision of the residential accommodation on or after 12 August 1991 to a voluntary organisation or any other person or body who

(a) operates or manages it as a residential establishment within the meaning of the 1968 Act, and

(b) is registered in respect of that establishment under Part IV of the 1968 Act;

(4) the person is accommodated in the residential accommodation immediately after the transfer.

2. In any case to which this direction applies a local authority shall remain under a duty to make arrangements to provide accommodation after any transfer to which paragraph 1(3) of this direction refers has effect while the person remains accommodated in the residential accommodation.

3. For the purposes of paragraph 1(2) and (4) of this direction a person shall be regarded as accommodated in residential accommodation even if he/she is temporarily absent from such accommodation (including circumstances in which he/she is in a hospital or on holiday).

4. This direction shall came into force on 12 August 1991.

DAVID WISHART

Signed on behalf of the

Secretary of State