MINUTES of the meeting of the HOME CARE CONTRACT PROCUREMENT PROCESS TOPIC GROUP held on Thursday 28 and Friday 29 August 2008 at 10.00am on each day
ATTENDANCE
Members of the Topic Group
K J Coleman, T C Heritage, N Hollinghurst, R Mays, P A Ruffles
Other Members present
S M P Newton (Executive Member, Adult Care and Health)
A M R Searing (Chairman of the Overview & Scrutiny Committee)
Also in attendance
Roger Booker, Managing Director, Care UK
Dee Dillistone, Quality Monitoring Officer
Earl Dutton, Assistant Director, EPD
Barbara Fitzsimon, Quality Monitoring Officer
Lyn Gwinn, Team Manager, EPD
John Hawkins, Regional Change Manager, CSCI
John Jasper, Chief Executive, Supporta Care
Catherine Lambie, Director of Quality, Care UK
Mark Lobban, Assistant Director, Community Commissioning
Emma Lund, Democratic Services Officer
Guy Pettengell, Acting Head of Contracts
Kathryn Pettitt, Assistant County Secretary
Natalie Rotherham, Scrutiny Officer
Adeola Sonola, Solicitor
Tony Vockins, Managing Director, Care UK
Bernadette Walsh, Managing Director, Supporta Care Plc
Martin Wigg, Hertfordshire Care Providers’ Association
Ian Williams, Head of Hertfordshire Purchasing
Phyllis Willis, Barbara Norris and Ann Willson, Users and Carers who had been involved in the tender process
1. / APPOINTMENT OF CHAIRMAN1.1 / R Mays was elected Chairman of the Topic Group for the duration of its work.
2. / APPOINTMENT OF VICE-CHAIRMEN
2.1 / T C Heritage and N Hollinghurst were elected Vice-Chairmen of the Topic Group for the duration of its work.
2.2 / N Hollinghurst declared a personal interest as the owner of a shareholding in Care UK. As the interest was non-prejudicial he remained in the meeting and participated in the scrutiny.
3. / REMIT OF THE TOPIC GROUP
3.1 / The Group noted and agreed its remit as set out in the remit report and scoping document circulated with the agenda.
4. / SCRUTINY OF THE HOME CARE CONTRACT PROCUREMENT PROCESS
4.1 / The Chairman opened by explaining the reasons behind the scrutiny, which had been driven by concerns about service delivery arising on the transfer of the home care contracts on 1 April 2008. The Chairman explained that the Group would seek to clarify why the procurement process had not prevented these issues from occurring, and would make recommendations on how similar problems may be avoided in future procurement projects. The Group then undertook its scrutiny by considering the issue in the following three stages: (i) the tender process, (ii) from award to the start of contract, and (iii) from the start of the contract and ongoing.
4.2 / Stage 1 – The Tender
4.2.1 / Acting Head of Contracts Guy Pettengell explained in detail how the tender process had been undertaken and described the background, the legal considerations and legislative changes which had had an impact since the previous tendering process in 2001, the process by which the tenders were evaluated, and the outcomes which had led to the award of contracts. The detail of the presentation is contained within sections 1 – 5 of report 4(d) of the agenda papers.
4.2.2 / The Group also heard from Ian Williams, Head of Hertfordshire Purchasing which had provided assistance in facilitating the tendering process; Kathryn Pettitt, Assistant County Secretary within the County Secretary’s Department which had been involved in providing legal advice; Phyllis Willis, Barbara Norris and Ann Willson - users and carers who had participated in the User and Carer Panel; and Dee Dillistone and Barbara Fitzsimon, Quality Monitoring Officers.
4.2.3 / The Group heard from contributors about the following issues which had affected the process:
· Users and carers involved in the tender process had felt that the agencies had only disclosed what they had wanted to in response to questions asked by them at interview and that there was a lack of objective data to support the answers given. They also felt that they did not have sufficient time to question providers in depth;
· Users and carers co-opted to question provider representatives did not receive training in interview techniques;
· The lack of a CSCI aggregate grading meant that it had been difficult to obtain data on a provider as a whole, although more information could have been obtained if all CSCI area reports on each provider had been examined. (The new CSCI process of making corporate reports available should facilitate this in future);
· The Group queried whether Members had been involved in the tender process, and were advised that there had not been Member representation on the tender panel. In response to a question as to why Members did not make the price/quality weighting decision, the Group was informed that this was because the contract had been let under delegated authority by the Director of Adult Care Services;
· The Group heard that ‘cost of change’ could be taken into account if the gap between incumbent providers and other bidders had not been so great;
· The Group heard that 11 out of 16 incumbent providers were unsuccessful in their re-tenders. Whilst it was highlighted that this had not solely been due to their price increases, the Group questioned whether further consideration should have been made to the weighting towards incumbent providers, and also whether the incumbent providers had been led to become ‘over-confident’;
· In the absence of published accounts the Group agreed that the comment in 4.2 of the report that incumbent contractors were making a ‘comfortable and very fair living out of the contracts at the current rates’ should be disregarded;
· ‘Punitive damages’ clauses in relation to breaches within the contract would not have been lawful: however, financial penalties for breaches are capped at 1% of a provider’s profits, and as these are linked to efficiency savings relating to key performance indicators these losses may be re-couped if performance improves over the course of a year. Whilst too high an efficiency penalty may deter providers from tendering for a contract, is 1% the optimal amount;
· Consideration could be given to whether the’1 star’ CSCI rating as a minimum tender requirement should be raised to ‘2 star’.
4.3 / Stage Two – From Award of Contract to Start of Contract
4.3.1 / The Group received a detailed account of the transfer process from the Acting Head of Contracts, together with information on the requirements of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) (which permit staff to automatically transfer to a new employer on their existing terms and conditions where a transfer of business takes place) from the Assistant County Secretary. The Group also heard about the specifics of the Supporta Care and Care UK transfers, as detailed in sections 6 – 7 of report 4(d) of the agenda papers.
4.3.2 / The following issues were identified:
· TUPE is a matter between transferring organisations, and as such ACS had not been able to become involved directly in this aspect of the process or communicate directly with staff of the outgoing provider. ACS had, however, offered to act as a facilitator to smooth the transfer process and this assistance had been accepted by all but one of the out-going providers. A ‘data handover day’ where information could be exchanged between providers in the presence of ACS at a specific time had been used by ACS and should continue to be used in the future. Consideration should also be given to amending contracts to require an out-going provider pass information concerning TUPE directly to their care staff;
· The risk associated with the reluctance of an outgoing provider to facilitate the transfer process should be fully considered.
4.4 / Stage Three – From the Start of the Contract and Ongoing
4.4.1 / The Group received detailed information on the issues which had arisen in the cases of Supporta Care and Care UK following the transfer of the contracts (to be found in sections 8 – 9 of report 4(d) of the agenda papers), and the actions which had been undertaken in response – both by the companies themselves and by Adult Care Services. In advance of the meeting the Group had also received figures on the number of concerns received pre- and post-transfer.
4.4.2 / The Group heard from representatives of Supporta Care that the company has extensive experience in dealing with TUPE transfers; however in this case it had felt that the process had been severely frustrated by the outgoing provider not complying with the spirit of the regulations. Supporta Care had not been allowed access to care worker staff, and therefore had not been able to present its case for encouraging existing staff to transfer across: the outgoing provider had also paid staff to retain them for a further two months after 1 April, even though the work would have by then transferred to Supporta Care. The Group heard that at the initial tender stage the outgoing provider had stated that 54 workers would be eligible to transfer; on 17 March it confirmed that only 27 were eligible to transfer ‘or were considering the possibility’; by the TUPE deadline this had reduced to 11, and on the contract start date 3 of these had been given annual leave and 4 had reported as sick – leaving a minimal number of staff available to work. Supporta Care outlined the actions which had been taken in response, which had included an extensive programme of advertising and recruitment, although this had been hindered by the length of time required for Criminal Records Bureau checks to be completed. Staff were also backfilled from St Albans to Three Rivers, although it was acknowledged that this had worsened the problems for St Albans service users. The Group heard that the Supporta Care contract has now resumed following suspension earlier in the year, and the company is confident that the issues have been largely resolved.
4.4.3 / The Group heard from representatives of Care UK that its transfer had initially gone well, although there had been some difficulties with staff who were resistant to the changes. Problems had emerged after 2/3 weeks when several key members of staff had left, so that immediate relationship problems and the loss of key members of staff had been significant factors in the problems experienced. There had also been issues with pay (some staff had been put on emergency tax or had their holiday entitlement incorrectly calculated so that they did not receive their full pay entitlement); issues with care visits being inadvertently ‘deleted’; a failure to complete all service user visits within the required timescales; a lack of staff capacity, and staff engagement issues. Care-workers had been brought in from other offices: however, they had been unfamiliar with the Hertfordshire area and so this had not resolved the problem. Catherine Lambie, Director of Quality, advised the Group that Care UK feels that most issues have now been addressed – a new management team has been put in place which will remain until services are delivered at the quality outlined in the contract, an audit carried out of office procedures and processes, an action plan completed and a Customer Services Manager appointed to look into complaints. The contract remains suspended, but Care UK is confident they will be able to demonstrate that progress has been made on improvement points at a forthcoming review meeting, and that the service in the future will be of a high quality.
4.4.4 / The Group heard about the steps taken by Adult Care Services to resolve the issues, including the increased visits by Quality Monitoring Officers to resolve problems locally and the support of the Emergency Response Team to cover shortfall in capacity. The Group also sought additional information on how data relating to concerns/complaints is managed and co-ordinated between ACS and providers, how easy it is for elderly and vulnerable users to reach the correct route for help in case of missed visits, etc. and the consistency of information provided to users. It was suggested that users could be invited to complain direct to the County Council rather than individual providers, to ensure that the County Council retains oversight over the number and types of complaint, and to avoid users having to use two different contact numbers. John Hawkins, Regional Change Manager at CSCI, spoke to the Group about the way in which CSCI works with providers in relation to regulation and inspection, the star rating system and inspection regime, and actions which may be taken against failing providers.
4.4.5 / The following issues were identified:
· Initial investigations have not found any TUPE breaches during the transfer process by either incumbent or incoming providers, albeit that the ‘spirit’ of the regulations was not adhered to by all outgoing providers;
· Poor attendance at open days, a high proportion of staff ringing in sick and/or reluctance by an outgoing provider to provide information in a timely manner should ‘ring alarm bells’ at an early stage;
· There is a need to ensure that contingency plans are in place from an early stage, and a need for incoming providers to consider the possibility that very few/no staff may transfer from the outgoing provider;
· TUPE only provides for staff information to be given 14 days prior to the transfer. Whilst this may be adequate in some industries/service sectors it may not be sufficient where it involves the provision of care for elderly or vulnerable people, and a longer period (one month suggested) to allow for transfer would be beneficial;
· A ‘staggered’ approach to transfer, for example transferring areas on an individual basis or applying built-in transition periods, would merit consideration and all agencies should be made aware of their responsibilities in ensuring a smooth transfer. A positive response was received from the companies present to suggestions that existing contracts could be amended to allow for future phased transfers;
· There seems to be no compensation or remedy available to users where a family member has provided care in the case of a missed visit;
· The County Council is the statutory provider of social care and all information provided to users should reference the County Council’s responsibilities in this respect;
· User packs should be consistent across all providers;
· The process for obtaining assistance in case of a missed visit, etc. should be made as easy for elderly/vulnerable users as possible, and consideration should be given to improving methods of contact in relation to complaints, especially during out-of-hours or when the call-centre is closed;
· Information on numbers of complaints about home care providers in their areas should be circulated to Members on a regular basis;
· Consideration should be given to strengthening the clauses in the contracts to better protect private fee-paying users – for example by requiring electronic monitoring.
4.4.6 / The Executive Member for Adult Care and Health advised the Group that consideration is already being given to a number of changes which are compatible with the findings of the Group (e.g. phased transition, additional information on providers, physical handover of data and IT compatibility between agencies/ACS).
5. / FINDINGS AND RECOMMENDATIONS
5.1 / It was agreed that the Scrutiny Officer would draft a series of recommendations based on the conclusions of the Group outlined in section 4 above; the wording to be agreed in consultation with all Members of the Group and set out within the separate report of the scrutiny. / Natalie Rotherham
5.2 / The final report and recommendations will be passed to the relevant Chief Officer and Executive Member, for them to respond. Further monitoring may be undertaken by the Overview & Scrutiny Committee.
Emma Lund