Service Reviews – Outline Business Case - Somerset County Council

(Cabinet – 2 May 2012)
excels rather than be subject to a possible future of long term decline which would
neither benefit its customers, its staff or the County Council.
3.1.6 Recommendation
As this option has a number of disadvantages, it is recommended that other
options are actively considered and compared against it in the detailed business
case, unless the problems around flexing corporate overheads cannot be resolved.
3.2 Common Themes for Options C and D (Whole service externalisation/open
market tender)
Options C and D have some commonality. Both models of service naturally drive
efficiency and transparency, both in terms of process and overall costs.
Continuing efficiencies could be delivered at the start of the contract as the level of
assessed need is mapped to hours delivered. The current market has a number of
private and not-for-independent suppliers offering good quality care and support.
However, whole service externalisation or outsourcing could result in a single
supplier receiving over half of all funding for services for adults with learning
disabilities in Somerset. Contracting with a single provider for such a large
proportion of the current expenditure could stifle competition, may reduce choice
and could affect service quality unless robust contract management processes are
put in place. However, this is not an uncommon supplier model and indeed the
elderly care market in Somerset has been well served using a fairly similar model.
A well designed contract that allows volumes to taper as people choose to direct
their own care would help mitigate these risks and it would be possible to go to the
market e.g. for work preparation services separately from regulated care services.
In the interest of avoiding repetition the following areas, though varying in the
magnitude of their impact, need to be carefully considered across both options C
and D:
• Pensions deficit crystallisation. The benefits and disbenefits of these
options are outlined in Appendix A and would require further exploration as part
of the development of a full business case should either of the externalisation
or outsourcing option be taken forward. However, in summary unless there is a
change to CLG Pensions Direction Order 2007 the effect in all cases would be
to add an additional cost burden to the Authority.
Advice received indicates that to plan and implement the changes to pension
arrangements required by options C and D arrangement takes approximately
six months to complete. Therefore, the points raised in Appendix A and the
additional costs need to be considered and planned as part of the development
of a full business case.
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