2 November 1994

Dear Colleague

COMMUNITY CARE PLANS: DIRECTIONS ON PURCHASING

Summary

1. This circular advises local authorities of new requirements governing their community care plans. In terms of the Secretary of State's Directions - copy attached - local authorities are required to include in their community care plans statements showing for the main types of care services:

a. the planned volumes to be purchased from each sector (voluntary, private, and local authority, including provision by authorities' own provider units);

b. the estimated expenditure on such purchases from each sector.

The Directions come into effect on 1 December 1994 and apply to plans prepared after that date. This should therefore encompass plans for 1995-96 and beyond.

Background

2. A key objective of the White Paper "Caring for People" is to ensure that people have a real choice of care. To help to achieve this the Government's policy is to promote the development of a flourishing independent sector providing good quality care alongside that provided by public services. The policy envisages local authorities developing their enabling functions. To do this effectively authorities need to make a clearer distinction between their purchasing and providing functions which may involve their separation. It gives them the responsibility for developing the mixed economy by purchasing good quality care from competitive providers in the private and voluntary sectors alongside the services they purchase from their own provider units. This increases the available range of options and widens consumer choice.

To promote the role of independent providers, local authorities should give early indications of expected needs, offer management and operational advice, and facilitate access to training. They may also wish to enter partnership arrangements.

3. The Secretary of State believes that there are real advantages in local authorities making explicit in their community care plans their proposals to purchase services from the independent sector. It will encourage authorities, when developing their plans, to identify more precisely their service needs. This builds on the expected evolution of community care

plans into purchasing strategies discussed in the guidance on planning (Circular SWSG1/91) and in the Department's implementation letter of 7 September 1992. It is also consistent with the change in focus to statements of intended action in community care plans generally, as set out in Circular SWSG14/94.

4. The Secretary of State expects that the inclusion of purchasing proposals in local authorities' Community Care Plans will act as a guide to the size and scope of the market. This will encourage the development of care services in the private and voluntary sectors alongside the continuing provision of local authority services.

Form Of Statements In Community Care Plans

5. Local Authorities should note that the Directions are concerned only with those services that local authorities intend to purchase or provide and not those that individual clients may purchase directly.

6. Typically, local authorities will be the main, or sole 'purchaser' of services. To promote the development of new services and improvements in the quality of provision they must, therefore, be active in seeking out, encouraging new providers and also be willing and able to consider new proposals from providers, both in the independent sector and in-house.

7. Authorities should not assume that there is no demand and no potential supply just because a particular service does not currently exist in their area. Similarly, authorities must be prepared to work with other providers to develop new services. They should nurture and harness specialist expertise.

8. The Directions require that the statement must include, for the main types of care services:

- the planned volumes of services to be purchased from each sector (voluntary, private and local authority including provision by authorities' own provider units);

- the estimated expenditure on these purchases from each sector.

Some of this information can be expressed as ranges. It should cover the same period as the Community Care Plan (3 years) with, for comparison, similar information for the last full year and, if available, that expected for the current year. Authorities may wish to make clear that the information in the statement represents their best estimates and that these may be deviated from in implementation.

9. Local authorities are not required to describe every service that they purchase or provide in this way. The statements should, however, cover the main services such as residential care, residential nursing home care, supported accommodation, day care, respite care, and domiciliary care. Services, such as respite care, that can be provided in a number of settings, should be identified as separate components of the main service.

10. To put the above information into perspective, authorities' statements should also record:

- how they make information available to guide potential providers on the steps they need to take to secure local authority business;

- the basis on which authorities may select providers;

_ the basis on which prices will be negotiated;

_ typical unit prices, by service and sector;

_ how training costs are to be funded.

11. Within that broad framework it is for each authority to determine for itself the precise form the statement should take to meet the objectives outlined above. Statements should, however, be brief and concise. Much of the material sought, i.e. all that in paragraphs 8 and 9 and parts of paragraph 10, lends itself to tabular presentation and we would very much welcome that approach. The residual text is complementary and explanatory, and the need for brevity in that context is re-emphasised.

12. The existing legislation and Direction on Consultations require local authorities to consult widely on their community care plans. This consultation will now include the statements required by these Directions. This will enhance the information available to providers and potential providers to help the development of innovative and flexible services of the kinds and volumes that local authorities will want to purchase. Through continuing dialogue, a good working partnership should develop between local authorities and providers of care services. Early and effective discussion between purchasers and providers will help to ensure that the appropriate services are developed and are available when and where needed.

13. The Secretary of State expects authorities to be willing to consider purchasing any of their community care services from any competent providers that can supply those services cost-effectively and to the appropriate standard of quality. Authorities should not arbitrarily exclude specific services or providers. Authorities should specify, in contracts, the standards they require and the arrangements they will make to check that these standards are achieved. Authorities should give priority to quality of care and value for money. A pre-requisite of this is that local authorities should be aware of the standards and the unit costs of their own services.

Timetable

14. Local authorities will be required to comply with the terms of the Directions and to have regard to the circular of guidance when, after 1 December 1994 they prepare new or revised community care plans under Section 5A of the 1968 Act

Enquiries

15. Please address enquiries on the content of this circular to Neil Rennick, Social Work Services Group, Room 52, James Craig Walk, Edinburgh, EH1 3BA (telephone 0131-244-5389).

Yours faithfully

GAVIN A ANDERSON

COMMUNITY CARE PLANS (PURCHASING) DIRECTIONS 1994

The Secretary of State, in exercise of the powers conferred on him 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 1990 Act] a), and of all other powers enabling him in that behalf, hereby makes the following Directions:

Citation and Commencement

1. These Directions may be cited as the Community Care Plans (Purchasing) Directions 1994 and shall come into force on 1st December 1994.

Interpretation

2. In these Directions -

"community care services" has the meaning given in section 5A(4) of the 1968 Act [ b) Section 5A was inserted by section 52 of the 1990 Act] b);

"independent sector providers" means any providers of community care services other than -

(a) a local authority;

(b) individuals employed by a local authority under a contract of service; or

(c) organisations which are owned, controlled or managed by a local authority or by more than one local authority;

"the 1968 Act" means the Social Work (Scotland) Act 1968;

"the 1990 Act" means the National Health Service and Community Care Act 1990 [ a) 1990 c.19] a).

Details in community care plans: proposals to purchase and to provide services

3. Each local authority shall include in any plan and any modification thereto which they prepare and publish for the provision of community care services in their area [ b) Each local authority is required to prepare and publish plans, and any modifications thereto, for the provision of community care services in their area in terms of section 5A of the 1968 Act, as inserted by section 52 of the 1990 Act] b) details of such proposals as they may have to -

(a) purchase any such services from independent sector providers of such services; and

(b) provide themselves such services,

as part of the authority’s overall provision of community care services for their area.

4. Where including in any plan and any modification thereto details of proposals in terms of paragraph 3 above, a local authority shall provide the following information in relation to each type of service -

(a) the volume which they propose to purchase from each category of independent sector provider and the volume which they propose to provide themselves;

(b) the estimated expenditure on purchasing that service from each category of independent sector provider and the estimated expenditure on the service which they propose to provide themselves.

GAVIN ANDERSON

Assistant Secretary (Grade 4)

The Scottish Office

Edinburgh

31 October 1994