Service Reviews – Outline Business Case - Somerset County Council

(Cabinet – 2 May 2012)
securing quality care may increase, In addition retention of the service does not fit
with the Council’s aspirations to be a commissioning led organisation and a smaller
more enabling authority.
3.1.2 Benefits
• Low or no short term impact on customers.
• Retains skills, expertise, knowledge and existing service levels.
• No additional or double funding of corporate overheads, including Southwest
One
• Retains direct provision within the public sector which many carers indicated a
preference for as part of initial feedback events, citing recent criticism of
independent sector services following the BBC Panorama investigation into
Winterbourne View, and the failure of Southern Cross. However it should be
noted that this preference was less prominent in feedback from people who use
services.
• Least likely to generate anxiety and resistance.
• Maintaining the in-house provision avoids the risk of market failure, with its
consequent dangers for vulnerable people and SCC's ability to meet its
statutory responsibilities, as well as cost and reputational implications.
• Allows SCC to retain the skills and experience necessary to tackle struggling
providers in-house to ensure it meets its statutory obligations and gives it more
control to respond to emergency situations
3.1.3 Disbenefits and any potential mitigations
• Unable to provide services funded by direct payments (which a number of
people who used services expressed a preference for at initial feedback
events). As more customers take advantage of DP’s there is significant risk to
the County Council of them choosing alternative providers, therefore increasing
unit costs. Even if this barrier was removed it is likely that the in-house service
would find it difficult to develop new revenue streams as, once SCC corporate
overheads are incorporated, hourly rates are unlikely to be competitive when
compared to independent and not-for-profit providers
• Retaining the LDPS in-house would require significant investment particularly
relating to capital spend. Although projected future rates will bring the service
more in-line with independent and not-for-profit providers this is expected to
take 2 years, while a transfer to a different organisational model has the
potential to release costs more quickly under the right conditions.
• Inflexibilities in SCC corporate overheads costs means that the potential to
maximise long term revenue savings will be more limited than options C and D.
• There could be an “opportunity lost” with regard to introducing a step change
through major service reconfiguration.
• There would continue to be significant limitations in capital investment into the
property portfolio due to on-going pubic sector austerity measures. Some
properties are no longer “fit for purpose”, in terms of living (but not the care
quality) environments. This increases the risk that customers who are directing
their own care may choose independent sector providers over the in-house
service, resulting in increased vacancies and therefore higher unit costs.
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