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Introduction
5.1 Under our community care policy, an increasing number of people who are incapable of managing their own financial affairs now live in residential care homes or nursing homes. Their numbers run into several thousands. Others are cared for in long-stay hospitals, although their numbers are decreasing as community care provision increases. Some will already have arrangements in place for managing their financial affairs, but for many, there is no one else to act on their behalf and their income and savings are not large enough to warrant the appointment of a financial guardian (see chapter 7). We therefore intend to put on a statutory basis the management by care establishments of the funds and property of residents who are unable to carry out this function themselves. We shall provide for a robust system of authorisation, control and regulation of these arrangements, all aimed at protecting the interests of the adults concerned.
5.2 We have been assisted in developing this approach by the Association of Directors of Social Work (ADSW), the Mental Welfare Commission and Alzheimer Scotland.
Policy objectives
5.3 Our proposals will give managers of NHS and private hospitals, residential care establishments and nursing homes the power to manage the finances and property of residents who do not have the capacity to do this for themselves.
5.4 These powers will replace those that currently allow NHS hospital managers to look after patients' funds (section 94 of the Mental Health (Scotland) Act 1984). Such powers are currently restricted to patients detained under the 1984 Act or receiving treatment for mental disorder in the hospital. This new power will cover any patient in hospital who cannot manage his or her own funds. The Mental Welfare Commission will retain its general protective functions in relation to people with mental disorder and as part of those functions will be able to continue to monitor how hospital managers look after the funds of such patients. We shall also provide that hospital managers may continue to look after funds for a transitional period, for people who have transferred to another hospital or to a care home. Hospital managers will also be able to manage funds for people who have been discharged, until other suitable arrangements can be made. These provisions will go further than the Mental Health (Amendment) (Scotland) Bill. That private member's Bill currently before the Westminster Parliament addresses the problem of patients' funds being "trapped" when they leave hospital. The effect of the proposed change in the private member's Bill will be to allow hospital managers to continue to use personal funds for the benefit of the individual, when cared for in the community.
5.5 Managers of establishments providing residential care in both the private and voluntary sectors, private hospitals and nursing homes will gain the right to manage residents' funds through their registration by the relevant local authority or NHS body. This will require the criteria for registration to be extended, to ensure that establishments have proper systems in place to safeguard the interests of residents in this respect. Care establishments managing funds will be subject to regular inspection and monitoring of the performance of this task by the registering authorities. As in other areas of provision, their registration will be cancelled if they do not perform their duties satisfactorily.
5.6 A small number of establishments that do not provide personal care as a whole or substantial part of their service, will need to apply for a new form of registration for the limited purpose of managing the funds of residents with incapacity. This will apply, for example, to some organisations offering supported accommodation.
5.7 We shall prepare a statutory Code of Practice about the exercise of their functions by hospital managers and managers of registered establishments. This will set out detailed aspects of good practice. In the interim period, until our legislation can be implemented, we are issuing guidance to hospitals and care establishments updating and extending the guidance and safeguards set out in the 1985 Crosby Report on the management of patients' funds.
5.8 We shall be taking forward the proposal in the White Paper Aiming for Excellence published in March 1999 to create a Scottish Commission for the Regulation of Care. That body will be responsible for the registration, inspection and enforcement of standards relating to all forms of residential and nursing care in the community. The new Commission will bring together the functions of the current Registration and Inspection teams in local authorities and health boards and will, in particular, ensure that national standards governing the management of residents' funds are properly enforced.
5.9 Our legislation will provide appropriate safeguards and restrictions governing the management of funds by managers of hospitals and care establishments. These will include:
Alternative approaches
5.10 The Scottish Law Commission recommended a different arrangement for management of residents' funds, whereby managers of NHS and private hospitals, residential care homes and nursing homes would have applied to the Public Guardian for authority to manage residents' financial affairs if no other suitable person was available. The Public Guardian would have monitored how funds were used and investigated any complaints.
5.11 The 1997 consultation paper, however, pointed out that this proposed role of the Public Guardian would be costly and difficult to carry out effectively, and said that the Scottish Law Commission proposals failed to acknowledge the existing responsibilities of local authorities and health boards for registering and inspecting care establishments. The paper set out the alternative framework outlined above for local authorities and health boards to approve and monitor the management of residents' finances by care establishments. It asked whether voluntary organisations might be involved in managing funds of people living in non-registered establishments. The paper went on to endorse most of the Scottish Law Commission's detailed proposals for defining and limiting managers' responsibilities.
Consultation
5.12 Most of the comments on this part of the 1997 consultation paper supported its proposals. There was also overwhelming support for legislation in the consultation exercise in 1998 on the draft interim guidance. Some concerns have been expressed about whether local authorities, and to a lesser extent health boards, are adequately resourced for their new responsibilities, and in particular whether the relevant authorities will have the necessary financial expertise. The need for national standards was emphasised and this has since been reinforced by comments from the Millan Committee. There has been universal acceptance of the need for a Code of Practice and for the issue of interim guidance. Each of these concerns has been addressed: we do not expect these proposals to generate significant additional costs for local authorities which cannot be met from within existing resources; a national care standards committee has been set up; and interim guidance is being issued.
5.13 There was some support for the idea of voluntary organisations becoming involved in managing the finances of people living in non-registered supported accommodation. However, there were major concerns about enforcing standards and also about the costs of this approach. We therefore prefer to create a new limited form of registration to cover management of funds by these establishments.
5.14 Several comments were received about the need to avoid conflicts of interest between the financial management of a care establishment and the function of managing residents' resources. There have been comments about appropriate safeguards and the vast majority of these have been taken on board in our proposals. For example, we are clear that management by the hospital or care establishment should be a last resort where no appropriate alternative is available. This approach is consistent with that of DSS appointeeship.
5.15 We have given careful consideration to the suggestion that the Mental Welfare Commission, rather than the registering authority, should authorise management of resources over the £5,000 limit for care home residents, as it currently does for patients with mental disorder. We do not think it would be appropriate to extend the Mental Welfare Commission's authority in this way. We are aware that the Millan Committee is reviewing the role of the Commission in general, and we do not propose change at present.
5.16 We have responded in our proposals to comments received about accounting and auditing, preventing direct charges to residents for managing their funds and the need to provide various restrictions on the purposes for which managers may use funds. For example, the approval of the registering authority will be required to purchase items shared between a number of residents.
5.17 We have looked at the process of identifying residents who are unable to manage their own finances. The 1997 consultation paper proposed that certificates of incapacity should be signed by a doctor qualified to assess capacity and countersigned by a Mental Health Officer. The responses to the proposal suggested that it would be unnecessarily cumbersome to involve the Mental Health Officer, and we have therefore built in other safeguards, to ensure an independent medical opinion, intimations to the resident and family and the possibility of seeking a determination from a sheriff of the resident's capacity to manage his or her own affairs. We shall provide in the Code of Practice for regular reviews of the need for care home managers to manage funds.
Conclusion
5.18 We consider that the above approach to the management of residents' funds by hospitals and care establishments will provide the best possible framework to ensure that residents' interests are protected and that their resources are used for their benefit. Our proposals will replace the current arrangements and provide a regulated and transparent structure for these important matters.
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