CABINET 14/10/2014 FOR INFORMATION AGENDAITEM9
BOROUGH OF POOLE
HEALTH AND SOCIAL CARE OVERVIEW AND SCRUTINY COMMITTEE
29 SEPTEMBER 2014
REVIEW OF ADULT SOCIAL CARE DAY SERVICES
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1.8 / PURPOSE
The purpose of this report is to:
- Provide an update on the consultation with service users and staff at the Hamworthy Day Centre
- Update Members of the options considered regarding the future Day Service delivery options, including COAST[1], and a recommendation for proceeding, following an independent options appraisal.
Members endorse the decision of the Head of Service (Commissioning and Improvement – People Services) to end the contract at Hamworthy Day Centre.
Members recommend to Cabinet for Officers to progress to the next step in the development of a full business case for the following identified service delivery option;
- Sharing joint ownership of a neighbouring Local Authority Trading Company (LATC), ideally with both Bournemouth and Dorset, if not then individually with one.
BACKGROUND
At the 1 July 2014 report to Health and Social Care Overview and Scrutiny Committee, Members accepted the need to consolidate services and carry out consultation with the small number of remaining service users and staff at the Hamworthy Day Centre.
The report included projections on the reduction of the average cost of day services per client per week advising that consolidation would bring the average cost for older person day services to £133.00 per week, per client.
Members suggested that benchmarking the cost of day sessions would be a more accurate comparator, (currently £78.00 per day) and requested costs to be detailed in the final report to Cabinet and Council, (please refer to Appendix 1 for further details)
Members supported the need for further work to understand the future delivery model for day services. Officers described the work to be undertaken by outside consultants employed through the Better Together programme, assessing Poole’s position in relation to a number of potential service delivery options. This work has now been completed.
DAY SERVICES CONSOLIDATION- UPDATE
The need for further consultation for the small number of services users, together with their carers, who remain at Hamworthy Day Centre, (part of Dorset House Care Home) was acknowledged by Members in July and a meeting was subsequently held on September 4th 2014.
The meeting was held jointly with council officers and Care South staff and outlined the proposed options for the future delivery of day services in Poole. The options included the potential for service users to have a Personal Budget with which to purchase their own services, thus providing them with greater choice. The meeting provided an opportunity for service users and carers to ask any questions they might have, whilst reassuring them that any changes would not affect the amount of care or support they receive and that they would be fully supported through any change process.
The carers stressed the value they placed on the availability of the day care service to provide them with respite for a full day, several times a week, and that they would wish this level of support to continue. To this end, given Care South have indicated they are unlikely to continue with a day service facility, service users funded by Borough of Poole will most likely be supported to transfer to Poole Day Centre.
ALTERNATIVE DAY SERVICES DELIVERY MODELS - OPTIONS APPRAISAL
To assess each of these options, Borough of Poole employed the same outside consultants as Bournemouth and Dorset through the Better Together programme.
The consultants have assessed Poole’s day services position, (including COAST) in relation to the following identified service delivery options:
- Services remain in-house – continuing with a re-modelled provision
- Outsourcing the services to the market
- Creation of a new ‘start up’ Community Interest Company (CIC), a form of social enterprise company
- Creation of a stand-alone Local Authority Trading Company (LATC)
- Sharing joint ownership of a neighbouring Local Authority Trading Company (LATC)
- Contracting with an existing LATC, transferring BoP staff and providing day services
The approach taken involved consideration of the available financial data, officer knowledge as well as drawing upon available local and national information, along with the consultant’s specialist knowledge of alternative business models. There was analysis of each options advantages, disadvantages and risks in relation to the aforementioned criteria.
Table 2 below summarises the results of the assessment of Options 1-6
Table 2 - Implications of the six options
Assessment criteria / Outsourcing / Remodelled in-house provision / CIC / LATC (Options 4,5,6)
Ability to make savings and be sustainable / Will make significant savings but could lose significant control over services / Limited scope to make required changes savings without reducing services / Social Enterprises (SE) have proven track record of becoming more efficient and reducing costs / LATC’s have proven track record of becoming more efficient and reducing costs
Ability to trade and develop new services / 3rd party providers are free to trade / In-house services cannot tradefreely to make a profit / SE’s are free to trade / LATC’s are free to trade
BOP can benefit from services / Contract is only mechanism for BoP. Would not share in additional profits / BoP in full control of all aspects of these services / Asset locks prevent from enjoying all additional profits. Control is not guaranteed / BoP has full control of the Co and can direct reserves to where it decides, but Corporation Tax may reduce full availability
Summary / Any savings/profit not all for BoP / Will not deliver savings / Any savings/profit not all for BoP / Any savings/profit and control for BoP
SUMMARY APPRAISAL
The appraisal has been split into two stages. The first stage considered the acceptability of the all 6 options and has been summarised in Table 3 below in respect to the first 4 options and further on, on page 6 in Table 4 in respect to options 5 and 6, (more in-depth analysis can be found in section 9 of Appendix 2 that accompanies this report).
Table 3 - Options 1-4 Summary of First Stage Appraisal
Option 1-4 / Continue in-house / Outsource / CIC / Stand alone LATC
Qualitative assessment / Quality / Viable but with risks / Viable but with significant risks / Viable / Viable
Cost / Not viable / Viable but with significant risks / Not viable / Not viable
Governance and flexibility / Not viable / Viable but with significant risks / Viable but with significant risks / Viable
Acceptability to stakeholders / Viable / Viable but with significant risks / Viable / Viable
Financial implications / Not viable / Viable but with significant risks / Viable but with significant risks / Not viable
Overall / Not viable / Available but with significant risk due to market conditions / Meets some criteria but not viable / Meets some criteria but not viable
Summary of First Stage Appraisal
Having considered the merits of options 1-4 the consultant’s findings echo officers concerns.
Whilst one of the benefits of day services remaining in-house would be the continuation of ‘business as usual’, financial and demographic pressures as well as Government policy means this is not a realistic option. It does not provide enough flexibility for the service to develop further to meet need, or provide value for money in the future.
Outsourcing is seen as a viable option and this can be seen in the current number of independently provided adult services across the country. However, it is an option not without significant risks, and although the private sector is often able to reduce costs, these can be at the expense of quality of service and a risk that the Borough may not always directly profit from these savings. Securing the right provision would also be a challenge in light of Poole’s currently under established market place for this type of service.
The Community Interest Company (CIC) option would have the same opportunities as a LATC to generate income and would be able to make efficiencies to generate some savings. However, these would be small scale and unlikely to cover the overall cost of running the CIC in the first place. In all likelihood the organisation would require additional income to sustain itself in the long term and would have significant limitations as to what savings and income it could be pass back to the Council.
From a governance perspective the Council will be restricted by how much control it has over the CIC on how it is delivered and might limit the scope for services in the future. This option is further discussed later on in section 8 of this report in recognition that there has been an approach from staff in Poole to set up such a service.
The last option considered at this early stage to be impracticable is the creation of a stand alone Local Authority Trading Company. Just like the CIC, the sole LATC is not viable, as it does not generate sufficient savings and income to pay its own governance, management costs and then provide value to Borough of Poole.
As stated there were six options that were appraised, having appraised the first four, the last two options are LATC related:
5. Sharing joint ownership of a neighbouring Local Authority Trading Company (LATC)
6. Contracting with an existing LATC transferring Borough of Poole staff and providing day services
Table 4 below shows that at the first stage appraisal both of these options are viable and require further exploring.
Table 4 - Options 5-6 Summary of First Stage Appraisal
Option 5-6 / Joint Ownership LATC / Contracting with an existing LATC
Qualitative assessment / Quality / Viable / Viable but with risks
Cost / Viable / Viable but with risks
Governance and flexibility / Viable / Viable but with significant risks
Acceptability to stakeholders / Viable / Viable but with risks
Financial Implications / Viable / Viable but with risks
Overall / Meets all criteria as a single LATC and viable / Viable but with significant risk due to lack of control and the tender process
SECOND STAGE APPRAISAL
Option 5 - Sharing joint ownership of a neighbouring Local Authority Trading Company (LATC)
The Borough of Poole is in the unusual position of having neighbouring authorities, namely Dorset County Council (DCC) and Bournemouth Borough Council (BBC), who are both interested in finding an alternative workable service model to deliver their future in-house services.
Dorset County Council has already accepted an LATC is a viable option for their services and is aiming to launch their LATC in April 2015 if their business case is accepted by Members. Bournemouth is exploring the viability of its own LATC, and the opportunity of joining with Dorset in a jointly owned vehicle under the ‘Better Together Programme’ agenda, confirming the view that a Pan-Dorset approach should be fully explored as potentially the best option for all three authorities.
At present, Borough of Poole Members have the option of joining three possible LATC’s:
- Pan Dorset LATC with all three authorities
- Borough of Poole and Bournemouth Borough Council LATC
- Borough of Poole and Dorset County Council LATC
There are a number of benefits associated with the creation of an LATC with both or either neighbouring authorities, just some of these are:
- A model that is financially viable with the potential to deliver efficiencies and savings to the Council as part of a much larger LATC, by sharing overall costs.
- Bournemouth, Poole and the surrounding parts of Dorset are geographically and demographically similar and so management integration and further cost saving could be possible.
- Service users and self-funders would be able to access a wider range of services through a jointly owned LATC.
- A jointly owned LATC is Teckal compliant, so neither participating authority would have to enter a competitive tender process.
- Greater opportunity in the future for Poole to consider other areas of service being delivered through the LATC
- As Bournemouth run a similar employment service already to COAST, amalgamating these services under a LATC model would be of benefit
- The level of control and influence available to Borough of Poole Members and Officers
- The level of acceptability to Borough of Poole Members, Officers and other stakeholders
- How additional savings/net profits are allocated across all shareholder groups
- Governance and corporate structures available
- Timescales and implementation and delivery are delayed by negotiations between two or three sets of Members and Officers
- Final governance structures may disadvantage Borough of Poole as negotiation leverage is limited due to the size of services transferrable
The options appraisal report outlines how a jointly owned LATC could be managed by creating a ‘Shareholder Monitoring Group’ (SMG) whose purpose is to review and control performance and the strategic direction of the LATC. The SMG would meet quarterly with the executive board of the LATC and would typically include:
- The Member for Adult Social Care
- Members with commercial experience in managing SMEs
- The Chief Financial Officer
- A Commissioner of social care services
- The contracts manager for the LATC
The recommended option is the jointly owned LATC with both Dorset and Bournemouth. This option has some associated dependencies and risks, but would be the only LATC option that involved shared ownership as Bournemouth and Dorset would both be together, leaving the Borough with no neighbouring single LATC as a potential co-owner. However, the potential benefits described earlier, in particular the opportunity for wider service provision through this option; make this the best option at this stage.
If the Pan-Dorset LATC is not possible, either Dorset CC or Bournemouth BC would be likely to offer a form of LATC share ownership, but would need to be further assessed to identify which offered the best opportunity for Poole.
Option 6 - Contracting with an existing LATC transferring Borough of Poole staff and providing day services
Finally option 6, whilst this was considered by the consultants as a viable option to be further explored, the principle of this option is similar to that of outsourcing, the vehicle being a Commissioner- Provider type arrangement. This approach is not without inherent difficulties, some of which are listed below:
- The process of tendering and all related costs and timescales
- A loss of control and no guaranteed level of input into the strategic future of services
- Contract negotiation and monitoring will require resources
- Risk that through tendering the LATC may not be successful.
SEAVIEW COMMUNITY INTEREST COMPANY BID
Members will be aware that staff from Sea View Centre presented a business case to officers after gaining Cabinet Office funding and support to create a Community Interest Company (CIC) with Social Enterprise status.
An initial appraisal of the business case raised some concerns about the financial viability of this model; this has resonated with the recent independent options appraisal.
However, the localism act supports local authority employees in taking over the running of local authority services and following a further meeting with staff from Sea View Centre and Senior Managers, an opportunity to further develop the CIC business case has been agreed.
Although, this is not the recommended option, It is the intention to consider the amended business case alongside the proposed business case for a LATC and report back to Members in due course.
NEXT STEPS
In light of this report and the findings presented by the outside consultants, officers’ recommendation is to proceed with the development of a full business case for Option 5; a jointly owned LATC with both or either neighbouring authorities.
To support this Members support is required to engage with the same consultants to comprehensively explore this option, to confirm its viability for Borough of Poole, taking into full consideration Bournemouth and Dorset’s future plans, decisions and associated timescales.
End of Report
Contact Officers:
Phil Hornsby, Head of Service, Commissioning and Improvement - People Services
Telephone: 261030 email:
Shelley Bambrey, Project Manager, Commissioning and Improvement - People Services. Telephone: 261012 email:
Jonathan O’Connell, Principal Officer Joint Commissioning, Commissioning and Improvement - People Services Telephone: 261144 email: J.o’
Appendix 1
Understanding the Cost of Current Services
The £78 cost per day of day services, (or £39 per half day session), referred to by Members at the July committee was originally calculated as part of the charging policy for council services back in 2010/11, and has not been changed since.
This figure was calculated by understanding the total cost of day services within the Borough of Poole, (in-house and external) and dividing this by the number of sessions provided.
The actual costs of our two in-house day services last year were higher than £78 when calculating the cost of services against the sessions delivered.
Figures have been received from two other authorities that were willing to share their day service costs. Each authority calculates their costs in different ways, e.g. client support need levels and age ranges, but these have been adjusted as far as possible to allow some form of comparison to be made, (see Table 1 below).
Unfortunately, Local Authority B was unable to separate costs by age range or client group and where based on total capacity as opposed to actual delivered and so these figures are potentially misleading. However, they were one of the lowest authorities identified in the benchmarking exercise in the July report using the national figures and so their figures do have some validity.
Table 1
Day Centre / Poole Day Centre – Pre consolidation / Poole Day Centre - Post consolidation / Seaview Day Centre / Local Authority
A / Local Authority B
£ cost per day
Older peoples day care (65+) / 101.04 / 86.56 / NA / 75.20 / 70.48
Adults Working Age day care / NA / NA / 95.3 / 91.29 / 70.48
As per the previous report, Poole Day Centre costs appear at the higher end of the scale whereas Seaview are more in line when compared with elsewhere.
By taking into consideration the consolidation of older people day services, the estimated cost per day based on sessions to be delivered in the future at Poole Day Centre, now that service users from Garland Road have transferred over, will have reduced from £101.04 to £86.56. The calculation is showing full year effect of the transfer in order to provide clarity in understanding forecast cost decrease.
This is in line with previously supplied information in respect to the expected movement of average weekly cost of day care per client (from £164 to £133).
Appendix 2
Care and Health Solutions – V6 Report. (separate doc)
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