Health Committee, 27 Apr 2004

Meeting date: Tuesday, April 27, 2004

Official Report 337KB pdf

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Subordinate Legislation

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Regulation of Care (Fees) (Scotland)<br />Order 2004 (SSI 2004/93)

I open the 11th meeting this year of the Health Committee and ask everyone to ensure that all mobile phones and pagers are switched off.

Item 1 on the agenda is subordinate legislation. We will consider the Regulation of Care (Fees) (Scotland) Order 2004 (SSI 2004/93). I draw members' attention to paper HC/S2/04/11/1. The minister has responded to the committee and Catherine Clark and Adam Rennie, from the Executive, are present to answer any further points of clarification that members may wish to raise. I remind members that nothing more can formally be done with the order, because the time for a motion to annul the instrument to be lodged and considered by the committee has elapsed. However, I invite members to comment on the minister's letter.

The minister says:

"It is for providers to decide how to fund fee increases, through securing efficiency savings, by seeking additional funding from any commissioner of the service, or by passing them on to users."

My concern relates to the very small organisations that will struggle with the fee increases. The three options that the minister has outlined are not realistic for small organisations.

On the first option—"securing efficiency savings"—we know that small organisations, especially the small voluntary organisations, have probably already secured efficiency savings time and again. On the second option—

"seeking additional funding from any commissioner of the service"—

given the fact that the commissioner is, quite often, a local authority, to suggest that the cost should be passed on to local authorities, which are already fairly strapped for cash, is unrealistic. On the third option—

"passing them on to users"—

I would be concerned about that as a solution.

In addition, I have two specific questions. First, in the fourth paragraph of his letter, the minister says:

"I am aware that some small providers claim they will have to close down, but there is no hard evidence to suggest that this is happening, even among services already at full cost fees."

I would be interested to know how the minister has sought evidence on that. Community Care Providers Scotland has provided me with evidence that suggests that some of its members are having difficulties and are expecting to have greater difficulties once the Scottish Commission for the Regulation of Care has to become self-financing.

Secondly, the minister says:

"We will continue to keep a close eye on the impact of fees".

I would like to get an idea of how the minister intends to do that, especially for some of the smaller organisations. Will he set up direct communication between the Health Department and those organisations? How does he intend to pick up at an early stage the hard evidence that is emerging?

There are quite a few points there, focusing heavily on the problems for small organisations. I will say two general things about that issue. The Executive conducted a full consultation on the proposals, which implement the policy on full cost recovery that was set out and debated fully when the Regulation of Care (Scotland) Bill was considered in the first parliamentary session. The fee structure contains specific provisions for small providers. For instance, it allows the aggregation of part-time workers, so that they do not all get counted individually, and the discounting of volunteers in recognition of the particular circumstances of small organisations.

You ask why the minister says that there is no hard evidence of closures arising from the impact of fees. The answer is simply that, as the letter says, the Executive does not have that hard evidence. We are not aware of large numbers or even significant small numbers of closures. I should also make the general point that fees are one of the costs that providers of care services bear. All sorts of things can impact on the costs of providing a care service and fees are one of them.

What plans do we have to keep an eye on the position? We have fairly regular contact with members of Community Care Providers Scotland, which you mentioned, and they are quick to tell us about any problems that are coming along. However, I should draw a distinction between organisations' saying that something will be a problem and that problem actually materialising.

You also asked how we will

"keep a close eye on the impact of fees".

Each year, we will need to do a full consultation exercise, with a regulatory impact assessment, on any proposals on fees. We will be coming forward with proposals for fees in 2005-06 and 2006-07. For each of those years, we will be pulling together information about the predicted impact. We might be in a position to mount some kind of research exercise so as to get a handle on that, but it is early days as far as that is concerned.

The last sentence of the third-last paragraph of the minister's letter mentions a possible structure

"where a provider is providing more than one type of service and where there are potential savings in some of the administrative functions."

Perhaps you could provide us with details of how that translates into charges.

Much depends on the rate of the care commission's activity. Some of the evidence from providers—I am not suggesting that this applies to providers of any particular size—indicates that they feel almost as though there are too many inspections, that inspections rapidly follow on from one another, that nothing changes, that the boxes are ticked and that the providers still get the bill. Will there be a review of levels of activity? The committee obviously wants the care commission to take proper care and attention and to use due diligence. Is anything to be done on that? There seems to be an open-ended commitment simply to reclaim through fees any costs that the commission comes up with.

That raises two distinct points. The first is to do with combined charges. The commission has introduced a combined charge for initial registration for housing support services and care-at-home services, which commenced only in December last year. I do not have the numbers to hand, but I will explain the way in which the system works. The commission treats the combined service as though it were one service. It adds up all the staff in the combined service and applies the appropriate category of fee. For instance, it would be possible for a relatively small housing support service and a relatively small care-at-home service to be added together and be counted as one, still relatively small, service, which would save an entire registration fee for one of those small services. Putting together those services might bring them into the medium-sized service category, but that would still represent a saving on their being counted as two separate services.

The commission is considering how that general philosophy might be applied to the annual continuation fees for services in that position. Priority was given to dealing with registration, because that was an immediate issue for care-at-home services following commencement of the scheme at the end of last year. The commission will be thinking more widely about other service areas in which that approach might be applied but, for the moment, the biggy, as it were, is combined housing support and care-at-home services. That is where the shoe could pinch most.

The second question concerned the activity rate of the care commission. The commission clearly cannot go round inspecting for inspection's sake. It does not have a blank cheque; it must agree its gross budget with the Scottish Executive every year, so ministers can control the level of the commission's activity.

We and the commission are keen to move towards a more proportionate, risk-based approach to inspection activity, which balances the need to provide a certain level of reassurance with the need to address the risks that are out there and that vary widely from service to service. In particular, we are looking for such an approach to be taken in inspections of child minding and the day care of children. I am aware that there is some concern about that area.

I should point out that the commission is not carrying out exactly the same work as was carried out before; it is inspecting against a new set of national care standards. I am sure that members are familiar with those standards, which were introduced by Scottish ministers and deliberately specify what service standards should be from a user's point of view. If the commission is to inspect against such standards, it needs to spend some time with users. Indeed, having been on a care commission inspection and having heard what other colleagues have said, I know that commission staff on inspections spend time talking to users in a way that perhaps did not happen before. However, such an approach requires commission resources.

The key point is that any approach to inspection has to be proportionate and risk based. The commission seeks to move in that direction wherever possible.

If the minister has placed additional burdens on the care commission, has that been followed by any revenue from the Scottish Executive Health Department or will those burdens be funded through the recovery of fees?

Are you talking about the national care standards?

Yes.

When the commission was set up, its budget was scoped to take account of national care standards. In effect, there was some initial pump priming from the Scottish Executive. However, it was made clear during the passage of the Regulation of Care (Scotland) Bill that the intention was always to move to full cost recovery except in cases in which there were explicit public policy reasons for subsidising the fees. For example, the fees for child minding and the day care of children have deliberately been kept low.

I presume that that is under review.

I am sorry. What do you presume is under review?

The changes in cost activity and the balance of the budget.

I am sorry, Mr Davidson. I am not sure that I follow the question.

Well, you have said that the service is expanding and that some allowance was made when the commission's initial budget was scoped. Will there be a review of whether the scoping was sufficient to fund the activity in question?

We are not specifically reviewing that aspect. I do not think that there has been any suggestion that the commission does not have a big enough gross budget; indeed, if anything, the reverse is the case. Now that the commission has been established, there is a considerable need for it to focus on proportionate and risk-based assessment. I hope that such an approach will reduce rather than increase costs.

Every time there is a push in finances, the patient or the person who is being cared for suffers, because it means that there are not enough staff to cover things. That happens regardless of whether we are talking about people in their own homes, in hospital or in nursing homes. Indeed, I heard of a child with special needs who had to stay at home for three months because there was no nurse to cover their trips to the nursery.

Although I welcome the fact that you are examining the receiving end of things, it is clear that cost-effective changes will take time to implement. People who receive care have told me that provision is patchy and I hope that you will take that into consideration in your investigations. Perhaps it might be worth following a patient's journey from the moment at which they start to need care to the moment at which they actually receive it to find out whether the service reaches expectations.

I do not know whether that is a question for our witnesses.

It might not be.

I am sure that such a study would be worth while. However, it is outside the immediate scope of the discussion, which is about care commission fees.

Nevertheless, the matter has been placed on record.

There is no hard evidence that some smaller operations would need to close down because of the fees. I am sure that the Executive is in regular contact with the care commission. Has the commission made any representations about the increase in fees causing a significant problem? Does it believe that there will be an impact on the provision of care, to which Jean Turner alluded, in that increased efficiencies might have to be made to meet the increased fees?

I am not aware of any representations from the care commission on those points. It would be fair to say that the commission is not enthusiastic about full cost recovery, because it is concerned about the impact that that policy will have on its relations with the providers that it regulates. The impact will be that the providers will perceive the commission as becoming increasingly expensive, at least until the full cost recovery ceiling is reached. I shall ask my colleague Catherine Clark to comment, but I do not think that we have received any specific representations from the commission on the points that you mentioned.

No, we have not.

If the problem had been significant, would you have expected representations from the commission?

Yes. I would have expected the commission to say to us, "This is going to be the impact."

Does the fact that it has not done so put the problem into perspective?

Possibly. One hesitates to draw too much comfort from the absence of something but, in so far as one can do so, it is a helpful straw in the wind.

Has the care commission raised any concerns about the impact on patient care of the efficiencies that are suggested?

The commission is clearly concerned to ensure that it is given sufficient resources to do its job properly, as are Scottish ministers and the Scottish Executive. Nobody has any interest in imposing on the commission reductions in resources so that it cannot do its job.

Given the confident response from the Minister for Health and Community Care, would not it be useful at least to discuss those issues with the care commission? How are we to monitor the situation if we are not having those discussions and are not aware of the commission's view on fees?

I did not say that we were not aware of the commission's view on fees; the commission responded to our consultation on fees. However, I am not aware that the commission has said anything to us on the specific points that you were concerned about with regard to the levels of provision.

Perhaps that is a matter for the inquiry later in the year, when we shall look at responses to the consultation document. When we carry out our post-legislative scrutiny of the Regulation of Care (Scotland) Act 2001, we will consider who responded and what their responses were.

It was suggested earlier that the care commission might carry out inspections for inspection's sake. Have there been any formal complaints that that has happened? Some of the anecdotal evidence certainly hints that over-inspection may be being carried out in order to collect enough fees to make the care commission self-financing. What would be the mechanism for a formal complaint and what checks are in place? Presumably the minimum inspection standards are laid down in some kind of regulation, together with the checks for ensuring that the inspection is not excessive. I am not suggesting that there are excessive inspections, but I would like to reassure members of the public.

I shall ask Catherine Clark to comment on that in a minute. On your general point, however, I can tell you that the minimum levels of inspection that are required are laid down in the Regulation of Care (Scotland) Act 2001, with the minimum being one inspection per year for services except for those providing overnight accommodation, where there must be two inspections a year, at least one of which must be unannounced. That is the standard that the care commission is working to.

The commission has no vested interest in going around carrying out gratuitous inspections in order to raise money, because it does not charge every time it turns up. If a service is registered with the commission, it pays an annual continuation fee. That is the same whether it is inspected once or, if the commission has grounds for concern about the levels of provision, 10 times. Where the commission finds something wrong in a service, it will certainly not say, "We've done our annual inspection, so we won't go back until next year." It could go back the next day or the next week, depending on the gravity of the situation. The commission is not engineering inspections in order to generate money; its finances do not work in that way. I ask Catherine Clark to say whether she is aware that we have received any complaints about the care commission's method of inspection.

No, I am not aware of any particular complaints. There is a mechanism, which Scottish ministers have approved, for making a complaint about how the commission has carried out its duties.

So the accusation from some care providers that the care commission is carrying out extra inspections to make money is unfounded, because it is impossible for the commission to make more money; it costs more money to carry out more inspections.

Precisely.

I want to clarify points made in Malcolm Chisholm's letter. He makes it clear that the Regulation of Care (Scotland) Act 2001, which the Parliament voted to pass, provides that self-funding through fees would apply from this financial year. He talks about phasing that in over the next three years and gives an example, on which I want to focus, because I am a little confused. He seems to be saying that if the cost to care homes were passed on to the consumer—let us use the word "consumer" rather than "patient" or anything else—that would be an additional 58p a week to the current £346 charge. Is that what he is saying?

The minister is not saying that that would be the case if the cost were passed on to the consumer; he is saying that, however the cost is met, it amounts to 58p extra per week on the current rate, which has been agreed by the Convention of Scottish Local Authorities and the care providers, of £346 a week or £406 a week where there is nursing care. The figures are in the letter to put the cost in context.

We are talking about a tiny percentage.

Yes.

Does that apply only to this year? Given that there is such a tiny increase this year, what will happen in the next two years if the policy is phased in? In the example, the percentage increase is tiny.

The figures that are set out in the order are intended to get all the services concerned up to full cost recovery levels by 2006-07 on the basis of steady percentage increases each year. The increase to 2005-06 and then to 2006-07—all other things being equal—would be of the order of 58p to 60p a week. The increases would be the same for another two years.

If my maths is right, we are talking about less than 0.5 per cent over three years.

I am sure that your arithmetic is correct. I have not worked out the numbers in quite that way.

So we are debating a tiny figure. Is that right, or am I misinterpreting the figures? Have I missed something? I am at a loss.

Having been involved in the discussions with Scottish Care about fees last year, I hesitate to describe any increase as tiny, but we are talking about a relatively small amount.

The minister's letter says that there is no hard evidence to suggest that some small providers will have to close. However, there is anecdotal evidence and I know that it was trailed in the press recently that 30-plus small care homes might have to close. In paragraph 24 of the regulatory impact assessment, you say, in relation to unintended consequences, to which I referred last week:

"It is possible that some small providers may have to close … It was always accepted that this might happen, but that risk must be balanced against the expected benefits of the new regulatory regime for users."

How will you monitor the hard evidence so that the committee can inform itself later whether those unintended consequences have come about? It is obvious that the people in the homes affected have to go somewhere.

We have a wealth of information from the annual social work statistics collection and the care commission's registration information. A number of different sources can be used. You are right to point out that the regulatory impact assessment drew attention to the possibility that those things might happen. As the minister's letter says, there is no hard evidence, so we flagged up closure as a possibility. We do not yet know whether providers have had to close, although we have the information sources to tell us what is going on. I add the caveat that there could be all sorts of reasons why services might close.

That information should be part of a comprehensive note for the committee to help us when we come to our inquiry. We need to know why some small care homes might close, why they might have closed and whether that is attributable to the fee structure. That would be of interest.

I am afraid that I have not looked at the responses. Did the National Association of Inspection and Registration Officers, which represents the people who carry out the inspections, respond to the consultation document?

We issued 11,000 or so consultation papers, including to all providers, and we received 137 responses. I do not know off the top of my head—

NAIRO is a professional organisation and it is very important.

I think that NAIRO responded, but I cannot honestly remember what was said.

Perhaps we can tell the committee clerk and send her a suitable link. Would that be helpful?

Yes, thank you. That concludes the evidence session. Thank you for your thorough answers.