Finance Committee

Meeting date: Wednesday, May 9, 2012

Official Report 566KB pdf

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Social Care (Self-directed Support) (Scotland) Bill: Financial Memorandum

For item 3, I welcome to the meeting Jean Maclellan, head of the adult care and support division; Jen Willoughby, the bill team policy officer; Iain Pearce from the analytical services division; and Craig Flunkert from the bill team. They are all from the Scottish Government. Good morning. Would you like to make a short opening statement?

Thank you, convener, I am happy to do so. I really enjoyed the earlier witness session.

I am sorry for keeping you waiting, but it was a stimulating session and I did not want to interrupt.

I couldn’t stop smiling. I could not get over the fact that I have brought my children up so badly. They are both creatives; one is a designer and one is a jeweller. I thought that I had failed them in every possible respect. I hope that I am better at this. [Laughter.]

Convener, you have introduced the team, but I will clarify our roles so that you know to whom particular questions should be directed. I head up the division. To put that in context, in addition to dealing with self-directed support policy, the division was set up a few years ago to look at social care policy, although we stray into health policy as well. Mostly we work with the experience of the individual in relation to the support and services that they receive. Other parts of the division are responsible for the policy for people who have a learning disability, people who have autism, and adults who survived being abused when they were children in care but who have problems with life at times and have found it difficult to recover, participate in society and get employment. We aspire to help them in that regard. We are also responsible for carers policy and young carers.

The division does quite a lot of diverse work but, at its heart, it looks at the experience of the individual and their aspirations. Self-directed support is a key component of that. We endeavour to look at how each part of policy impacts on others, and are always looking to improve the quality of life for individuals who use support and services.

11:30

Craig Flunkert is our bill team leader, so questions for him would be about the rationale for the bill and the bill’s content. We also have a wider strategy, which is a 10-year programme, and the bill is only part of what we are trying to achieve, as the committee will have seen from the papers that it has already scrutinised.

Jen Willoughby is Craig’s supporter, but she specialises particularly in the financial aspects of drawing the bill together. She is being ably supported in that by Iain Pearce, who is an economist. He gives us technical and professional detail.

I will give the committee a bit of background about where we think we are. We have general stakeholder support for the bill from users, carers and professionals. The one notable exception to that is the Convention of Scottish Local Authorities, which is of the view that statute is not necessary. Some local authorities also hold that view to a greater or lesser extent.

It would also be fair to say that the difficult fiscal situation that conventional or general service delivery is facing is, to a degree, constraining the pace of our aspirations. Members should make no mistake about the fact that self-directed support is a radical systems change. It is about giving choice and control to the individual. Counterbalancing all that, there is a general willingness across Scotland—a hearts and minds commitment, if you like—to make the policy work. There is also a view that the users of support might well be able to get better value from the resource that they are allocated and better outcomes for themselves if they are truly involved in shaping that support.

A considerable body of qualitative evidence emphasises the positive benefits to individuals. However—and it is a considerable however—the lack of robust quantitative evidence means that estimating costs has been challenging. We have small, microlevel bits of evidence, some of which has come from England, but when we began, we did not have a macrolevel Scottish context.

Our methodology was to consider costs, benefits and impacts as widely as possible. Because of the lack of substantive quantitative evidence, we commissioned a study from David Bell and his team at the University of Stirling on macrolevel costs and the benefits of SDS. That study essentially confirmed for us that it is genuinely difficult to make accurate estimates. It also concluded that self-directed support costs are similar to those of existing conventional social care support. There was no sense that greater expenditure would be required as a result of changing the model.

We used other evidence, such as the Reid report, which dates back to 2003. It looked at a number of local authorities and best estimates of cost for introducing direct payments rather than a whole SDS framework. We looked at our experience in implementing other acts that had local authority costs—the bulk of the burden from this proposed statute will fall on local authorities. We took some of the calculations that we did around adult support and protection legislation because there are some parallels there. We also did some internal modelling of potential shifts such as expected take-up and what that might look like.

Underpinning all that, we have done a considerable amount of consultation with stakeholders. The business regulatory impact assessment shows that we have consulted in two phases. We also consulted with COSLA and local authorities throughout the process. In addition to a bill steering group, for example, we have a wider strategy group of which COSLA has always been a member and to which it has always contributed.

I move briefly to the contents of the financial memorandum. We identified potential costs in various areas around the framework provisions, including what we need to transfer from one method of assessment and delivery of social care services to another; what that means for workforce development; what it means if we are truly putting citizens at the heart of the changes; and what information and advice must be readily available to them and explained to them so that they become, to a degree, advocates of their own destiny. We also recognised potential cost implications in the power to provide support to carers, in relation to the duties to provide direct payments and, a little bit, in joint working with the NHS. The financial memorandum considers whether the costs within each area are directly or indirectly associated with the implementation of the bill.

I will stop there and sum up the issues. There is a difficulty in arriving at figures due to a lack of evidence, which is acknowledged by all parties—it is not as though someone takes a different view from ours about how the costings could be put together. The figures that we have are our best estimates, and we have applied a logic to the process.

The lack of agreement with COSLA is significant, but many local authorities do not hold COSLA’s view. Yesterday, we gave evidence at the Health and Sport Committee and several local authorities were there, three of which—Glasgow City Council, Dumfries and Galloway Council and Highland Council—had participated in test-site pilots and were very supportive of all that has been done to date. It is clear that all local authorities are in different positions and therefore require different levels of support and funding.

We are constrained by the current fiscal situation, but that does not alter our assessment. The accounts provided are estimates. We also think that there are other significant pots that local authorities can go to—the reshaping care for older people change fund, in particular, although there are other change funds. That change fund totals £220 million. Within the guidance for local authorities on applying for money from that pot, specific reference is made to self-directed support being one use of that money. There is another substantial pot for autism, one for learning disability and one for sensory impairment. It is not all about a cumulative self-directed support pot.

There is also the issue of long-term, recurring and short-term costs. Our view is that the proposals would be cost neutral in the long term, and that is supported by the Stirling study.

We face the difficulty of separating out what is required for the bill directly and what is required for the wider strategy. If we are looking at it critically, to implement the bill really requires only specific bill training. The wider funding is to effect what was described at the Health and Sport Committee as the “seismic” culture change that the strategy requires.

I will stop there—it is over to you.

No bother. Thank you very much. I will focus a wee bit on COSLA, as its response is the issue of greatest concern. The explanatory notes state:

“The specific impacts of the Bill provisions themselves are relatively narrow. However, there are a range of costs associated with transforming culture,”—

which you have just touched on—

“systems and approaches to social care provision in response to the Bill and the wider Strategy.”

In its response, COSLA says that

“commissioning arrangements, administrative costs, and dual running costs are partly dependent on the choices individuals make under SDS. That said, the £23m identified falls far short of even councils’ most conservative estimates.”

It says that councils have suggested that the lowest estimate—it has put “lowest” in italics, just in case we have not picked that up—would be just over £50 million. However, COSLA suggests that the cost, over three years, would be £90 million.

Having looked through a number of financial memorandums I am well aware—I am sure that colleagues are too—that Scottish Government officials always seem to err on the side of the lowest possible costs and that many organisations, such as COSLA, always seem to suggest that the costs will be higher. Occasionally, there has been a meeting of minds, but that has not happened as often as we would have liked. Given what you said about local authorities being so supportive—I am well aware that stakeholders other than COSLA are overwhelmingly supportive—and the test work that has been carried out so far, why is there a mismatch between what the bill team is saying and what COSLA is saying?

I will let Jen Willoughby explain how we came to our costings so that the committee can reach a view on whether they are realistic.

COSLA’s estimates are based on a survey that it conducted. At yesterday’s Health and Sport Committee meeting, it committed to providing a collation of that survey rather than the individual authorities’ returns. Our sense is that the survey used a range of methodologies rather than a consistent methodology, so COSLA was provided with very disparate returns, and that the figure that you quoted as the “lowest” is the median or middle of the range that it received.

Jen Willoughby can talk about our calculation of the £20-odd million for transformation.

I reiterate what Jean Maclellan said. We think that the COSLA estimates are overestimates, but I guess that members are used to Government officials saying that to them. We think that its estimates do not include the possibility of any savings that might occur over the three-year period, and we think that there will be savings. In the financial memorandum, I pointed to the example of the Alzheimer Scotland pilot in Ayrshire in which considerable savings were made with only a few people. That is an example of what can be done when money is used more flexibly in an SDS package.

I produced a little table, which is included on page 24 of the financial memorandum and which shows how we came to the £23 million estimate. Jean Maclellan referred to the Direct Payments Scotland “Direct Payments Finance Project Report”, which is one of the sources that we used for that. I think that further information about that was provided to you. That report is from 2003, which is a considerable time ago, but it looked specifically at bridging finance needs in local authorities. The issue of bridging finance is not new; it has been on-going for many years, as members can tell—as I said, the report is from 2003. That project tried to break things down specifically and look at several areas objectively.

We recognise that things have moved on since then. Obviously, it is not 2003 any more and things will be different. Local authorities have received substantial amounts of money from the Government since then to effect transformation, and there has already been substantial transformation in many local authorities. They have moved away from block contracting and building-based services, which will help with bridging finance and the need for dual running costs—or the lack of need for them. We thought that that published report was useful public information on which to base an estimate.

Obviously, we uprated from 2003 prices and scaled up the estimate for the whole of Scotland, and we compared that with a Glasgow estimate. Glasgow City Council is currently rolling out SDS with money that it asked for from its local council committee. As members will see from the table, the figure is £0.5 million per year for three years. That compares quite favourably with the estimates that we upscaled from the Reid report of 2003.

That is the reasoning behind our £23 million estimate. As Jean Maclellan said, the COSLA estimates have not been published—they are not in the public domain. We have worked with COSLA quite extensively and tried to work through the estimates with it, but we think that its estimates are overestimates and that it has not taken into account other factors, including the savings that could be made.

There is concern that the

“potential saving has perhaps been over-emphasised.”

I think that that is really about the long-term savings. How robust are the data on the potential for long-term savings?

11:45

The case for long-term savings and cost neutrality in the long term is quite robust. The Stirling report found that, in the long term, the costs were not different to those of what might be called a traditional package. That backs up findings from the individual budgets evaluation network—IBSEN—survey of personal budget pilots in England. It came to a similar conclusion about cost neutrality, so that is the academic view.

Obviously, we need to keep an eye on the issue, which we will do in the long term as part of the monitoring process around the bill and the strategy.

Jean Maclellan mentioned the change fund. What will be the long-term impact of the legislation with regard to the change fund? Is that a pot that local authorities should be able to dip into in the short term, or will they have to rely on it, if the figures are not as robust as is hoped?

The change fund is specifically for the term of this Administration. At the moment, it is not clear whether it will continue thereafter. It is particularly focused on older people’s issues and carers’ issues. It is not SDS-specific.

I think that all committee members are aware of that. If the change fund was not continued beyond this session, would there be a need to consider additional sources of funding, or would the SDS budget be completely neutral by that time, so there would be no need to access additional funds?

The Stirling report talks about cost neutrality in the long term. What is meant by the long term differs between local authorities, because they are all in very different places. As I said, some of them have moved away from block contracts entirely and now use spot contracting, which is far easier to align with what we are doing under SDS. It is difficult to say where we will be after the end of the current spending review and whether any further transformational money will be needed.

We expect transformation to be a fairly rapid process and to be able to get things in place quickly. The idea of the transformation funding is to push the strategy forward quickly, in line with the bill, and to make the two things happen at the same time. We expect that, in some local authorities at least, there will be no further need for funding after the end of the spending review period.

I can give two small illustrations of what we are talking about. John Alexander, the director of social work in Dumfries and Galloway, said yesterday that he has only spot purchasing now and that, on that basis, he can get much better value for the £20 that a client spends than he can get by spending it for them. You can set that against the Glasgow experience. There, traditional care packages had not been reviewed for a number of years. Some of those packages, concerning people who were placed in the community when long-stay learning disability hospitals were closed, amounted to five or six figures. Those are the complexities of the system that we are working with.

I am playing devil’s advocate, to an extent, as I have seen some of the significant savings that have been suggested.

I take it that you want full roll-out and full implementation by the end of this session.

Obviously, if the bill is passed by the Parliament, we would expect enactment to take place around the end of next year. At that point, any new clients presenting to social work will be assessed along the lines of SDS and will be given the options that they would be entitled to under the act. When existing clients enter their review process—that should take place every year, but, for various reasons, it can take longer in various local authorities—they will be offered the options and choices that will exist under the act.

We are in negotiations with the Association of Directors of Social Work and the Convention of Scottish Local Authorities about how long we might require that process to take, to ensure that everyone is offered the choices. We are looking at three to five years after the enactment of the bill before the system is in place for everyone.

The wider strategy is 10 years.

Yes. I will open up the discussion to colleagues.

Jean Maclellan mentioned that Dumfries and Galloway was one of the pilot sites, and that John Alexander, the director of social work, gave evidence to the Health and Sport Committee yesterday.

With regard to the bridging costs, the public reaction to what was happening in Dumfries and Galloway was, unfortunately, that the changes were perceived as a smokescreen for the closure of day centres and adult resource centres. There was a significant backlash against the concept of personalisation, which is most unfortunate and very sad.

The backlash occurred to such an extent that the two parties most likely to form the administration in Dumfries and Galloway both said in their manifestos that they would keep the day centres open. Where there has been such a degree of public reaction, and where many people in receipt of services would choose to buy into the building-space services—as they are called—there will not, in the immediate future, be any savings from the cost of the buildings.

If that experience is replicated throughout Scotland, the transitional costs for local authorities could be significantly higher than estimated.

A lot of the bridging finance estimates involve double-running costs. We are having to run the building-based services for those people who want to remain with them while other people move away, and having to liquefy resources so that people can take a direct payment to go and purchase a service elsewhere.

We are not imposing any choices on people, or saying that building-based services or day centres are wrong. If there is a demand for those services, they will remain and flourish because people want to use them, and people will direct their resources to those places.

If a local authority has day centres for which there is a demand, there is no reason why those day centres would have to be closed at all.

My point is that if a slightly smaller number of people are using the centres and perhaps using the personalisation moneys to buy into services in such centres, but other people are choosing to go elsewhere, local authorities will not be able to make savings from the day centres that one might assume would be made over a transitional period.

Yes—there is a case for some rationalisation within those services if there is some spare capacity. One example is South Lanarkshire, which has invested quite heavily in its building-based services to create flexible resource centres. Day centres within buildings have been expanded to include other services.

If a local authority finds that it has spare capacity and spaces, it might use those in more creative and flexible ways to provide other services that people want.

At present, many local authorities have excess property that they are not able to use and are trying to dispose of. However, in the current economic climate it can be quite difficult for them to sell the buildings and put the services in with a day centre or whatever. The transitional costs may therefore be a bit higher than you were anticipating.

A lot of things that are laid at the door of the self-directed support policy are about much wider social care issues. The closure of day centres is part of another policy that is largely related to the needs and wishes of people with learning disabilities. It dates back to the same as you initiative from 10 years ago, which involved a consultation in which the vast majority of people with learning disabilities who contributed said that they did not want building-based activities.

That flies in the face of what other client groups might say. People on the autistic spectrum—please forgive my gross generalisation—prefer being in a building where they know the environment, the lighting, the seating and the routine.

The SDS framework allows people to choose whether they want a direct payment, an individual service fund, conventional services or a combination of all those elements. It is not about being dogmatic, but about trying to enable choice and a degree of control.

To expand on what Jen Willoughby and Jean Maclellan have said, committee members may have seen the recent Audit Scotland report on “Commissioning social care”, which relates to the way in which good-quality strategic commissioning of services and procuring of particular services on the back of that come into play.

One of the report’s main findings is that councils need to put longer-term strategies in place to improve how they do that. As Jean Maclellan said, SDS is a driver for getting commissioning to shape up a bit more, but it is one of many drivers.

Another thing that it is important to stress is that the concern around double-running costs that the personalisation agenda has given rise to tends to relate to the fact that local authorities are concerned that people who are offered self-directed support will move away from building-based services, but the buildings will have to be kept open for the smaller number of people who still wish to use those services.

It is important to stress that the fact that someone goes on to self-directed support does not mean that they will stop using building-based services. We know from the experience in England that people tend not to make very radical changes to the services that they use, even if they are moved on to a more personalised regime. The most recent statistics from England show that although there has been a higher than expected take-up of individual budgets—35 per cent of users have been transferred across to individual budgets—the vast majority of people in that subsection are still not choosing to take direct payment-style options and move away from building-based services. Overall, only 9 per cent of the total number of clients have taken such options. Even when they are offered the choice, the vast majority of service users will continue to consume the more traditional council-organised services, so although there will be a large cultural shift in how services are designed and delivered, there will not necessarily be a move away from the traditional locations and buildings that they have been delivered in to the degree that is feared.

Just to give some ballpark statistics, only 2 per cent of those who get services at the moment are using an SDS equivalent, so we are far from reaching a tipping point of any sort.

From my experience locally of people who engage with the local authority in determining their support needs, managing their expectations appears to be crucial when it comes to the amount of money that the local authority ends up spending on the services that are delivered.

To go back to the convener’s culinary experiences of burgers and Egon Ronay food, people will expect the best that they can get, but what is put to them by the local authority is often way short of their expectations. Is that the type of dialogue that we get into in trying to meet the demands set out in the financial memorandum? Is it the case that, at the lower end, people will be dining on burgers rather than on steaks?

There are many ways to answer that question. Some of the interventions that people are looking for in their lives are very small. For example, they might want to be a member of a leisure centre; such a membership could make a major impact on their health and wellbeing.

I can think of an illustration of an intervention that was fairly controversial in its day—it dates back a couple of years. A local authority had provided traditional respite for an adult with learning disability and his mother, which meant that she had a rest when he was away. He would go into a traditional residential unit, which he did not particularly enjoy. Through SDS, the local authority bought a caravan and a motorbike, which meant that the mother and the adult child could get respite in the caravan whenever they chose. There was not much social work involvement and the cost was less over a relatively short period of time than the cost of continuing to provide an arrangement that neither party benefited from.

As Jen Willoughby mentioned, using Scottish Government funding, Alzheimer Scotland undertook a pilot in the Ayrshire council areas that produced some stark figures.

There were six people with dementia in the pilot, and the total combined cost of direct payments with self-directed support packages for them was £880 per week. Alzheimer Scotland estimates that the total equivalent cost of residential accommodation, which was seen as the primary alternative for those individuals, was £2,845. In that instance—

12:00

—the potential annual saving is £102,180, as you state in paragraph 82. You are obviously keen on that example.

We like it. It demonstrates something.

That is a positive example. Jean Maclellan mentioned that Glasgow City Council is undertaking a large review programme and in many cases it is reviewing the support of individuals who have not had a review for a long time—much longer than the yearly reviews that the guidance recommends. Some individuals’ needs reduce in time and the level of support to which they are entitled also reduces. That can be a difficult discussion for the social work practitioner and the individual to have. The review is not necessarily prompted by self-directed support; it happens in order to offer the individual greater choice, but it can still be difficult. Discussions are often easier with newly presenting clients. That is the other side of the issue.

To come back to the point about whether people are eating McDonald’s or steaks, it is worth looking at the experiences of people on self-directed support. We have seen from the test sites where self-directed support is being piloted in Scotland, and also from the evidence from where individual budgets have been introduced in England, that people who choose to go on to individual budgets or self-directed support report that they are happier with the services that they receive and that they feel that they have a better quality of life and better outcomes. The outcomes are positive when such support is introduced.

We want the best value for the public pound. There is an issue of equity across Scotland, because provision varies between local authorities and people with similar needs are not necessarily getting the same care packages, whether they are traditional or innovative. Part of what self-directed support does, through reviews and so on, is to release some funds that can be given to other people who might not have had their outcomes met if it were not for the initiative pushing or driving forward the agenda. Equity is an important aspect of the work.

That is helpful.

I want to give the witnesses an opportunity to address a couple of points on page 34 of the Scottish Parliament information centre briefing, on the main issues for local authorities, service providers, SDS users and family carers. I would have asked about building-based solutions, but that has largely been dealt with. However, I ask the witnesses to comment and give their views on a couple of points.

The paragraph on the main issues for service providers mentions

“the risk of investing in staff training and infrastructure if services are destabilised (e.g. by SDS users changing contracts at short notice).”

I appreciate that there is only a limited evidence base so far, but is there any validity in that statement or are you happy that such things can be addressed?

Craig Flunkert is the best person to answer that. Perhaps Iain Pearce can help, too.

Some of this comes back to the way in which the bill frames the four options that are available to individuals. Sometimes there is an assumption, which feeds through to some of the findings from the Stirling study as well, that 100 per cent of people will move on to direct payments and take their business elsewhere.

Although the bill will make a big difference by enshrining people’s right to choose, and if they want to get the direct payment and take their business elsewhere they will be able to do that, it sets out four options, including the option to choose arranged services, where there is already investment in professional care managers. It is sometimes easy to overstate the impact that the bill will have. As policy officials, we obviously want to emphasise the difference that it will make, but the idea that there will be an overnight destabilising of the situation is probably a red herring.

Currently, only 3 per cent of service users access services through direct payments. Even with a large increase in that number, such as a 100 per cent increase, we will still end up with somewhere in the region of only 5 or 6 per cent of services being delivered in that way. There are challenges for service providers, but they need to be viewed in the context of the changes that are occurring in local authorities. There is already a shift in local authorities away from the traditional block contract towards the use of spot contracts. As local authorities move towards spot contracts, the differences between having a spot contract with a local authority and a spot contract with a self-directed support individual will be smaller than the differences between having a block contract with a local authority and a spot contract with an individual who has self-directed support. Some of the differences will disappear over time anyway, as councils change the way in which they procure services.

We are investing in providers in the next three years. We allocated £1 million last year, and there is £6 million in the next three years, to invest in transformation among providers and to help them to come to terms with and prepare for the changes. Some of the money has gone to Community Care Providers Scotland, which represents providers. Its role is to troubleshoot for providers, to consider where the issues are and to come up with solutions, and then to feed back to the Government to tell us what is going on in the sector. Lots of innovative projects are going on to grow capacity and to help service providers to move on and to become more streamlined and efficient.

That is helpful.

My second point, which is in a similar vein, is that there is a risk that the cost of the increased flexibility in SDS will fall on SDS users and family carers. Will you respond to that and say whether the costs are included in the financial memorandum and whether you are happy that you have dealt with that risk?

We recognise that, as people take more control, they take on certain costs because of the time and effort that are involved in organising their own package. There will be monitoring costs. If someone decides to take a direct payment, the council will require returns at various intervals, so that will involve the costs of the personal time and effort that the person puts into that. The evidence from users who are already on direct payments and self-directed support packages is that, despite those costs, they still see the value of the packages that they receive and they do not consider those costs to be a barrier to uptake of the packages.

I should put it on record that I support the policy, so do not take my questions the wrong way.

There is also a suggestion that independent advocacy might need to be beefed up a bit for those individuals. Has that issue been taken into account?

Support, advice and information are key aspects of the agenda. It is important to ensure that people make an informed choice rather than just any old choice. That has been flagged up in every piece of research that has been done on self-directed support. We are investing in advice and support services in the next three years to try to grow capacity. There are many advice and support services out there, but we need to ensure that they are networked, that they are in the right areas and that they can move into other areas if necessary to provide the support that people need.

The approach applies not only to the self-directed support agenda. We have a carer information strategy. Carers can go to places to receive advice and support, which can include stuff about SDS. We also have one-stop shops that can provide advice and support for people with sensory impairment. There is a large network out there. We need to bring the services together and ensure that the coverage is sufficient and that services have the right information to give to people to help them understand their choices.

I will focus on the financial memorandum. There is a degree of support for the bill, but the flashpoint is around the estimates of the transformational costs to local authorities and the time that it might take for transformation to happen.

You referred to table 2, which is the main basis for your estimates. Am I correct in thinking that the table is based on data from only three local authorities?

Yes.

Why did you not seek data from the other 29 local authorities?

We consulted twice on the bill, which included consulting on a business and regulatory impact assessment and asking local authorities for their views on the finances. At every stage of consultation, local authorities have told us that there will be costs but that they do not know what the costs will be. The costs are uncertain because of the nature of the proposed changes. The costs will depend on what individuals choose to do, so it is difficult for local authorities to estimate the costs and think about them quantitatively. Local authorities found it difficult to tell us what the costs will be.

COSLA wrote to local authorities to survey them, and even it found it difficult to reach any firm conclusions. Local authorities could quantify some costs but not others, and different methodologies were used to find costs in different areas. We decided that the most sensible way forward was to use sources that were in the public domain.

As Jen Willoughby said, we tried to develop a set of costs by taking a bottom-up approach and putting costs against individual items, because finding evidence on what the costs will be has been difficult. When we began to produce the financial memorandum, one of the first things that we did was a literature review to try to find sources of evidence that could inform the financial memorandum. Most of the studies on self-directed support, individual budgets or other such forms of support tend to look at the outcomes that people experience rather than the costs to local authorities of providing services.

The University of Kent conducted a study of the pilots on and the introduction of individual budgets in England and looked at the set-up costs and transformation costs to 12 local authorities, which was a relatively small sample size. The study found that local authorities experienced a range of set-up costs and that the average came to about £270,000 per year per local authority.

That study was anonymised, so we do not know the sizes of the local authorities involved. That makes it difficult to translate the costs accurately to Scottish local authorities, particularly because local authorities in Scotland tend to be smaller than those in England. However, if we scaled the average across the 32 local authorities in Scotland, the cost would come to a little over £8 million a year. Such figures are very much in line with the estimates that we have calculated for the financial memorandum.

The study in England looked at how long local authorities believed that set-up costs or transformation costs would be incurred for. The answer from most local authorities was at least two years; some local authorities said that the period would be three years. That closely matches the allowances for costs that we have included in the financial memorandum.

What we have included in the financial memorandum is similar to what was experienced when individual budgets were introduced in England.

Does your approach have a risk? You are scaling up on the basis of three local authorities’ figures. Jen Willoughby said that all the councils are in slightly different places. What is the degree of risk? Would it be safer to have a range of estimates as opposed to one specific figure?

There is a degree of risk, and all the figures are estimates. Even producing estimates has been quite difficult in the first place. We thought carefully about how to divide the £23 million among local authorities, because we know that they are at different stages—some will need more, some will need less and some will do different things from others with their transformation funding.

We talked through that approach with COSLA and it asked us to divide the money in the way that we have. Members have the breakdown of that division. We recognise that local authorities are all at different stages so we will keep an eye on things. If, by the end of three years, some local authorities have not achieved what they need to achieve and there is more to do, we will need to reconsider what funding can be applied.

12:15

The Finance Committee put out a call for evidence on the bill and we have reviewed the responses. Have you had the opportunity to review those responses?

Yes.

Yes.

We had one response from COSLA and, by my reckoning, eight responses from local authorities. Although the local authorities did not give many specific figures, there seemed to be a broad consensus about the level of funding.

Angus Council stated that the funding

“falls short of even our most conservative estimates”.

Dundee Council stated that costs beyond 2014-15 “should be acknowledged”. East Ayrshire Council stated:

“The savings ... are concerning as there is”

no

“evidence to support this.”

Glasgow City Council—one of the local authorities that you based your figures on—stated that

“costs and timescale are under estimated”.

Perth and Kinross Council stated that costs will be “significantly higher” than estimates. Scottish Borders Council stated that

“training costs will be double”

and

“the bridging ... costs will be higher”.

West Lothian Council stated that

“the memorandum ... very significantly underestimates the costs”.

Those are the views of only eight local authorities, but they were the only ones that submitted evidence, so theirs are the only written submissions that we have. However, there seems to be a consensus among those local authorities that the costs that you put forward are not high enough. How do you respond to eight local authorities all saying that?

In its response, East Ayrshire Council lists estimated costs and compares them to the amounts that it will be getting from the Government, which are more than the council’s estimates. However, it says that there are other costs that it does not know about yet and which it has not been able to estimate. That is the problem. There are a lot of costs that people are not sure about yet. They suspect that there might be further costs, but they cannot quantify them. Despite the absence of that quantifiable information, we have tried to make the best estimates that we can.

I will take Angus Council—just because it is first alphabetically—as an example. It states that the funding

“falls short of even our most conservative estimates”.

After reading that, does the Government then liaise with Angus Council to ask what its estimates are and what they are based on, to try to work out why there is a difference? If the Government says £24 million and COSLA says £90 million—the figures at the two extremes—does the Government follow up with individual authorities to find out what their figures are based on and try to flush out where the differences lie in order to work out what the real picture might be?

We have had a limited amount of time to look at the detailed responses from councils to the committee. There was more detail in the responses to the committee—although, as you said, there is not 100 per cent detail on the estimates and the explanations of how councils arrived at them—than there was in the responses to the two phases of Scottish Government consultation. We certainly wish to follow up with the ADSW, COSLA and, as necessary, individual councils, to ask them to share a bit more information about their estimates, particularly with respect to the point beyond this current spending review period.

At the Health and Sport Committee meeting yesterday, the director of social work at Dumfries and Galloway Council mentioned the need to constantly monitor and review the costs. Some of the councils’ concerns might well be tied to a concern that ministers will impose a deadline by which councils should have reviewed all existing clients. We wonder whether the length of time allowed for reviews of existing clients might make a big difference to the level of costs and the time period during which costs would be incurred for transforming how councils do things. The difficulty for ministers and the Finance Committee is that that time period has not been decided yet—it could be three, five or eight years. We suspect that if a longer time is taken to review existing clients, that should lead to a spreading of costs, with costs perhaps being at the lower end of the estimates.

While we are on the subject, perhaps it would be helpful for Craig Flunkert to talk about the wider work that he has been involved in to consider regulations, guidance and commencement dates, which are all part of our collaborative work.

The bill steering group has involved stakeholders including COSLA, the ADSW and Glasgow City Council officials, and it has been very useful to have their input. That group recently agreed to continue to meet as a programme board throughout the parliamentary process and beyond to enactment, to discuss the issues again.

In its response, COSLA was relatively measured in owning up—as we have done—to the uncertainties around costs. At yesterday’s meeting, a COSLA official used the word “generous” to describe the amount of money that is being provided for transformation compared with the minimal compliance approach that is taken in respect of some bills. Councils are often supported to provide some training for practitioners on their duties and powers, but a constant criticism is that investment is needed to deliver practical change on the ground. The £23 million is being provided to enable local authorities to make that investment. Nevertheless, we plan to follow the matter up with the ADSW, COSLA and councils now that—perhaps because of the point that we have reached in the legislative process—they are starting to be a bit more specific about where the costs lie.

The committee is asked to take a view on the financial memorandum. The bill team says that £24 million is about right—it may be generous or slightly above what is required. COSLA says that the cost will be £90 million. All the local authorities that have contributed evidence—although not all have given specific figures—say that that is an undervaluation or a significant undervaluation. Whose estimate is correct? I simply do not know from the evidence before me, and the disparity is very big. There will always be slight differences of opinion, but the disparity between a £24 million cost and a £90 million cost is pretty substantial. I do not think that it is satisfactory that the committee has to take a view on the financial memorandum on the basis of the figures that we have.

What would your normal practice be in relation to local authorities that have not responded? Would you note the position of COSLA and eight local authorities out of a larger number of councils?

My understanding—the clerks or the convener may correct me—is that we write to all local authorities and COSLA and make judgments on the basis of the evidence that is put before us. However, I think that, because we review a number of financial memorandums every week, we do not approach every local authority. I stand to be corrected by the convener on that.

Sorry—the clerk was speaking to me and I did not catch what you just said. We wrote to all 32 local authorities—was that the point that you were making?

The question was about what we do when councils do not respond.

We do not get back to all local authorities.

No, of course we do not. It is a matter for them. If they want to raise concerns, they are fully able to do so. We will often raise concerns, as Gavin Brown is doing at present.

The position is the same for us.

We assume that you do not have any concerns.

Through extensive consultation, we have tried to give people the opportunity to contribute to the position that we find ourselves in.

We can only guess because we have not seen the detail of the responses, which are coming in quite late, but I suspect that some of the disparity may be to do with the fact that, as I mentioned, there is an assumption in some local authorities that the change that will be imposed by the bill will have a much more radical and quicker effect than the effect that we understand the provisions will have. Perhaps councils assume that a very high percentage of individuals will be required to take a direct payment and have made modelling assumptions about the choices that those individuals will make.

It is impossible for us to know the basis on which councils’ assumptions are made, because we have not seen the detail that shows where they are coming from. Although we have asked for the information a number of times, we have not been provided with it. We acknowledge that any forecasting on the matter is imperfect, but the table on page 24 is based on a published report—we can provide more detail about how the Reid report came up with the estimates in the table—that looked in quite a lot of detail at what the cost might be if 3 per cent or 5 per cent of people went for option 1 in the bill and then chose to take their custom away from the local authority. The issue was generally around bridge financing.

We can provide more information, if you feel that more information to back up where our estimates have come from would be helpful, and local authorities could be invited to provide much more detail about the modelling and assumptions that lie behind their figures, so that those are evidence based, rather than a statement being made that the cost will be £90 million. We did not see a huge amount of detail behind how councils arrived at the figures. An itemised list with detailed modelling would be useful to all parties.

The committee should be clear that there has been no lack of effort on our part; our effort has been sustained and considerable.

Thank you.

To be fair, nine local authorities actually responded, plus COSLA. You are right that, although the local authorities that have given evidence have raised concerns, they have not provided the same level of detail about why they have specific concerns. That is understandable, as they perhaps do not have the capacity or ability to do so, but it is important for them to ensure that their concerns are brought to our attention so that we can raise them on their behalf.

Like everybody else, I am supportive of the concept of self-directed support and of individuals making choices rather than just being put in boxes and so on. In the big picture, Ms Maclellan said that there is no sense that greater expense will result from changing the model. I find that a wee bit strange because, if you put six people who are in a centre with two staff servicing them out into the community, the same two staff—assuming that they continue to service the same six people—will spend less time with them. I presume that, for the cost to stay the same, each of the six people gets less time from the staff.

Not necessarily, because in a day centre the staff ratio will vary from place to place and the number of personal assistants that people require vary. Some people may require only one personal assistant, if the level and type of support required is not substantial. There are huge variations.

I accept that there are huge variations but, if you provide a service in one place, it requires fewer staff and would appear, at least on the surface, to be cheaper than spreading provision out. You mentioned the hospitals that have been closed. We had Lennox Castle and Gartloch near Glasgow. Individuals I used to visit in those hospitals, where they were with friends and staff 24 hours a day, were moved into flats where they were very isolated and received one visit a day.

You are talking about quality of life as well as the cost. In some places, people were put out into the community with substantial care packages and those were not reviewed. Not everyone has been isolated as a result of going into the community. Some people have had rich and fulfilling lives that are much better than those that they had in long-stay hospitals. They have made friendships and have the same circles of support that you and I have, which do not necessarily involve money changing hands.

You mentioned friendships. You probably know that the Accord Centre is in my constituency. It caused something of a stir when Iain Gray was chased into Subway. The First Minister has been out to the centre a number of times. The matter has been extremely insensitively handled by Glasgow City Council because, whereas the picture that is being presented in the bill is that people will have a choice about whether they carry on in a day centre or do something else with the money that might be available, exactly the opposite has happened in Glasgow. Even before people get their hands on the budget, Glasgow City Council has announced that the day centre is closing.

People’s great fear is that they will lose friendships and be isolated. Parents come to me and tell me that they do not want their adult with learning disability child just wandering around Argos every day—they cannot store all the catalogues that get brought back—or going to the same college course year after year.

I suggest that the situation has been badly handled in Glasgow. If the costs that Glasgow is proposing are as low as they are but, under pressure, the council has had to create a new centre, where does that leave all the costs in this?

12:30

My sense is that there is not a new centre. Modification to the Tollcross centre has been offered in relation to the Accord Centre.

Your points about quality of life for people with learning disability generally are recognised for some people. The impact that the 10-year “The same as you?” programme, which was completed in 2010, has had on the lives of people with a learning disability has just been evaluated with a view to having a second major strategy for those people. It will address many of the points that you have made.

But is it the case that the weight is against the day centres, even if people want them, because, as Elaine Murray suggested, if the number of people going to them reduces, the natural conclusion is that, sooner or later, they will close?

People said in the consultation on “The same as you?” that they did not want building-based services. A number of authorities have gone down the road of not having such services, but not all have done so. For example, it is recognised in Glasgow that people with autism would prefer a building-based service, which they have in the form of the number 6 service for adults who choose to spend their time there. Some of those adults want to spend some of their time outwith that building, but at least they have that building to go to. Local policies on building-based services vary a lot, though.

You have obviously studied, consulted and all the rest of it, but my impression is that certainly the social work department in Glasgow is very much pushing against ghettos—I agree with that policy—but the resistance is coming from the users and the carers. Another issue is the extent to which councils have consulted both the users and the carers. Certainly, it has been my gut feeling at times that the carer and the user have had a different agenda. I wonder whether the money that we are talking about for advocacy is really going out for that. Are all users getting the opportunity of an advocate, even if the carer thinks that they do not need it?

Some users and carers have very good relationships and understand and are respectful of each other’s positions. Part of our consideration in relation to the current exceptional circumstance for a family member to be the employee centres on what you are alluding to, which is whether there is any potential for abuse in the relationship. A simple example is that, if you are my relative and you are caring from me and I want you to do something in your employee capacity at 10 in the morning but you fancy doing something else, you could say, “Och, Jean, never mind. I’ll do that at half 11.” Sometimes, the relationship between user and carer in the exceptional circumstance in which the latter is the employee can have its difficulties. I endorse the point that you make.

Another point that you made was about the fact that, in some councils at least—I think that it would be the case in Glasgow—there has been a cut in the budget and a realignment between some people getting a lot of care and some people getting very little, which is all happening in among the introduction of SDS.

Yes. The overlayering is unfortunate, as I think several committee members have said and as I said in my opening remarks.

I accept what you have said on that, as have other people. I just wonder whether we will ever be able to get underneath that and separate out the reasons for things. I get people coming to me who used to have two days of a service of some kind but have now had that cut to one day, and there are similar kinds of issues. Do we trust local authorities not to push the service level down to meet the budget and to say instead, “Well, this is the need, and the budget follows on from that”?

Craig Flunkert might have something to say on that point, as he is closer to some aspects of Glasgow than I am.

As I think you have alluded to, some of the issues that you are raising are general social work and social care issues. The question of whether the amount of support that an individual gets, in financial terms or otherwise, meets their level of need is a fundamental one. That is a challenge that local authority practitioners must weigh up on a daily basis, regardless of the options that the person is choosing.

It is the duty of care.

Yes. The bringing together of the fact that social work budgets are being pressed and sometimes reduced and the fact that councils are rolling out changes to people leads to a mixing of the two. You mentioned a constituent whose service provision was reducing from two days to one. That person is not taking control of the budget; they are experiencing a reduction in the service that they receive. If the choice is between a flat reduction in services across the board or translating provision into individualised budgets that people can control and which deliver better-quality services, the latter choice is the better one.

The problem is that the two things are happening at the same time and people are being given control over the lower amount, which means that they cannot buy the same service that they had before. There are issues with that, of course, and I take your point.

Like Gavin Brown, I was struck by the forceful tone of Angus Council’s submission, until I got to the final paragraph, in which it basically suggested that it was implacably opposed to self-directed support, which might explain the tone of the rest of its submission. Nonetheless, a number of concerns have been raised by authorities around the costings.

One of the things that disappoint me is the number of local authorities that we have not heard from. In particular, I am disappointed that we did not hear from Aberdeen City Council, of which I was a member for five years, until I stood down last week. I know that it has done a lot of work on the cost of individual packages, as there were some learning disability packages that cost six-figure sums. What is your assessment of the landscape with regard to local authorities’ transformation of social care services? Is it the case that some of the local authorities that have written to us have not gone through the kind of transformation that Aberdeen City Council went through to reassess the delivery of social care services? Might the background to some of the concerns that have been raised with us relate to the fact that councils are looking at the issue in the context of what they deliver rather than in the context of the kind of transformation that other authorities have gone through?

You might have a good point there. We know that all local authorities are at different places, and it is hard to gauge precisely what stage they have all reached. For example, in the direct payment statistics that the Scottish Government collects, North Lanarkshire comes right at the bottom of the list, with the smallest number of direct payments per 10,000 people. However, we know that North Lanarkshire is quite advanced in terms of the transformation to a more personalised way of doing things. We suspect that it is offering what we might call a direct payment but it calls something else, which means that that is not being measured in quite the same way.

We know that there are a lot of pockets of good practice, where people are being innovative and flexible. We also know that other local authorities have not made the same degree of progress on strategic commissioning that North Lanarkshire has made. We are thinking in the longer term about what services will be required and where they will be required.

I would not like to comment on the stages that the various local authorities that responded to you have reached, but we know that they are all at different places.

Yes. We will have to factor that into our thinking. Obviously, you will have to do some work with regard to how you liaise with the authorities about the impact that the bill will have. I suspect that some authorities will find it easy to adapt to the new legislation and others will have to have their hands held for a little while in order to get them to a better place.

You have talked about the £23 million or £24 million that will cover costs that are associated with the policy. How do you see that being spread across the various authorities? If what I have just said is accurate, and you appear to be suggesting that it is, one would assume that there will need to be more front-loading of spend in some areas than in others, and some authorities will need more financial support during the transition than others. Have you assessed which authorities are likely to need more intensive financial support?

In conjunction with COSLA, we recently finalised the breakdown of the £23 million over three years. We consulted COSLA quite closely on the formula for the breakdown.

We decided that the fairest way to do it was to have a base amount per local authority, to ensure that the smaller local authorities did not lose out completely. For the next three years, there will be a base amount of £50,000 per year per local authority. We thought about weighting the remainder of the funding by local authority, depending on where they were in the stages of transformation, but COSLA has asked us not to do that. It thought that that would penalise local authorities that have already used funding and progressed substantially. We have considered that argument and we think that there might be some merit in it. We should not penalise local authorities that have transformed; we should encourage them to use that money to continue to transform. That is the formula that has been agreed with COSLA for the transformation funding.

I want to go back slightly to elaborate on a point that Jen Willoughby made. Commissioning strategies are key to this whole agenda. We have not talked at all about scrutiny bodies and the part that they play in measuring what is going on in each of the authorities and in getting into some of the underbelly that John Mason described. Dating back to 2009, the Social Work Inspection Agency has expressed its dissatisfaction with commissioning strategy progress across Scotland. That is also a critical component.

I am interested in what you said about the argument that COSLA has posited. I do not see it as a penalty if one local authority does not get as much money as another if that local authority does not require the same level of support to get to where it needs to be. Some authorities have got their houses in order and got to the stage at which they can implement the legislation seamlessly, and some authorities will need quite intensive support. There is an argument that funding should be directed towards those authorities that will need assistance, rather than being spread more evenly so that those authorities that need intensive support do not receive it and do not get to where they need to be while other authorities that are already there get money thrown at them that will not do anything other than be added to their pot. I can see where COSLA is coming from but, at the same time, I think that it is a risky strategy.

I accept your point, but there is a difficulty with identifying the stage that local authorities have reached. It would be incredibly difficult to draw up a league table of where everyone has reached, so it would be hard to divide the money in that way.

I have one thing to add to what Jean Maclellan and Jen Willoughby have said. Mark McDonald talked about future engagement with councils about the transformation money. At its most recent meeting, the bill steering group agreed that officials, in conjunction with the ADSW, should send out a questionnaire to ask local authorities for their early plans for the funding. That will start quite soon as part of the on-going dialogue and communication between Government officials and local authorities about what they are doing.

The other aspect that has not been mentioned is the 32 self-directed support leads who have been identified in councils. Those people have come forward with our assistance and volunteered to be a lead co-ordinator in their local authority. It will be their job, partly funded through the transformation funding, to co-ordinate their local authority’s readiness or preparedness, and to share information with other lead co-ordinators. It is not all just about money going to local authorities; it is also about those leads sharing their experience of what they have done so that others do not repeat the same mistakes. They will also share a lot of the good things that they are doing so that local authorities that are a bit behind in their journey can pick up and go a bit quicker. It is not just about the level of transformation resource that authorities get; it is about making the right decisions in managing the implementation of the legislation.

There are also plans for us to visit every local authority. Dates are being set for us to do just that.

Thank you.

I thank colleagues for asking those questions and I thank the bill team for answering them so comprehensively.

12:45 Meeting continued in private until 12:53.