SWSG Guidance Package Index Ref: F4

12 March 1997

Directors of Social Work/Chief Social Work Officers of Councils

Copy to: Chief Executives of Councils

Association of Directors of Social Work

Convention of Scottish Local Authorities

Holders of SWSG Guidance Package

Dear Colleague

COMMUNITY CARE PLANS: DIRECTIONS ON INFORMATION

Summary

1. This Circular advises local authorities of new requirements governing their community care plans. The Secretary of State has made Directions requiring local authorities to ensure that key decision makers in Councils have the full range of financial information for effective planning of community care services.

Statutory Background

2. Section 5A of the Social Work (Scotland) Act 1968 (as inserted by Section 52 of the NHS and Community Care Act 1990) requires Councils to prepare and review as appropriate community care plans. Plans are to be published at 3 yearly intervals and reviewed annually. Guidance on the general contents of plans is set out in Circular SWSG14/94. The Community Care Plans (Purchasing) Directions 1994 require authorities to include in their plans and any modifications thereto, details of proposals to purchase services from independent sector providers and of these they propose to provide themselves. The Directions and Guidance in Circulars SWSG13/94 and SWSG18/96 specify the form of the information.

3. Under Section 5A of the 1968 Act local authorities are also required to consult on their plans (or revisions to plans); the Community Care Plans (Consultation) Directions 1993 require that consultation includes organisations representing the independent sector and that the plans indicate the method of consultation. These requirements still stand.

4. Residential care for the elderly is one of the largest blocks of local authorities’ social work expenditure. It costs around £150m annually and changes at the margin can have significant cost benefits. Considerable new resources have been and continue to be provided

to implement the policy of community care and it is important that these resources are used to the best effect. Recent analyses have shown that Councils are able to make better use of their resources if the proportion of residential care (particularly for older people) which they purchase from the independent sector is increased. Ministers believe that greater awareness of the financial effects of decisions as to who provides services would lead to more cost effective purchasing. Accordingly, they consider that it is necessary for members of the decision making committees of Councils to have the key indications of costs by sector before them when considering plans.

5. Ministers recognise that safeguarding the quality of care is paramount but that authorities already have in place both registration standards and conditions of contracts which define quality requirements.

Description of Financial Information in Plans

6. The Direction on Purchasing already requires authorities to set out their purchasing intentions in their Community Care Plans. The new Directions aim to draw out from the wide range of information contained in Plans, the key elements relevant to budget decisions. The new requirements are described more fully below.

7. The information on the costs of residential care for older people which should be made available to Committees of the Council will allow a comparison of the cost to the Council of caring for the people in more costly Council homes with the cost to the Council if these people were being cared for in independent sector homes. The Schedule to the Directions comprises a table which will show the average gross cost to the Council per person per week in Council Homes and Independent Sector Homes. In the case of Council homes that will be the actual cost per resident; in the case of independent sector homes it will be gross price the Council pays these homes. Since persons who pay for their own care in Council Homes are charged full economic rates they should impose no net costs on the Council and are not included in the table. If the Council’s own provision includes homes with costs which exceed the average price paid to the independent sector, the Council should quantify the gross level of savings that it would achieve if it did not provide residential care for older people in these homes, but purchased such care from independent sector homes.

8. It is recognised that the Council may not immediately be able to make the level of savings shown in the summary on the Schedule and that managing any substantial changes in services for vulnerable people requires great care on the part of the Councils. Councillors would however find useful an explanation of the extent of, and timescales during which the following factors might inhibit the realisation of savings:-

1. overhead and capital costs which cannot be saved;

2. if the homes are transferred with existing staff to the independent sector, the Transfer of Undertakings (Protection of Employment) Regulations 1981 would apply;

3. if the staff are made redundant, the staff would be eligible to receive redundancy payments.

9. The table should be formally put before members of the Committee responsible for Social Work when general resourcing of residential care of the elderly is on the agenda, and to the Finance Committee when Social Work expenditure is on the agenda. It may also be circulated to other interested parties at the Council’s discretion, and should be made available, on request, at the Council’s offices.

Action

10. These Directions come into force immediately. All authorities should send copies of their statements or response to the Directions to Neil Rennick in Room 48C at the above address.

Contact Point

11. Queries on this Guidance or that on the Directions on Purchasing should be addressed to Neil Rennick (Tel: 0131 244 5389) and on planning generally to, Jenny McNeill (0131 244 5424) at the above address.

Yours faithfully

G A ANDERSON