Service Reviews – Outline Business Case - Somerset County Council

(Cabinet – 2 May 2012)
3.4.3 Disbenefits and any potential mitigations
• Initial resource requirements will be high. Due to the complexity of the service
and the high levels of operational risk involved in service provision there would
be significant costs involved in a competitive tender process, although the
tender would be subject to a Part B procurement process. Estimates received
from the Strategic Procurement Service are that the costs would be in the
region of £1.5m (+/- 500k) and that the process would require a dedicated team
of 6 staff.
• Due to the size of the service and the need to carefully involve service users
and carers at all stages of the tender and evaluation process is estimated that it
would take in excess of six months.
• There are significant and complex property issue (see page 12 for background),
and options to address the associated cost and risk factors need to be
developed as part of the full business case.
• Robust monitoring arrangements will need to be to be in place to protect
vulnerable customers and provide reassurance to carers, many of whom
expressed concern about the potential involvement of a “private for profit”
provider in the provision of care and support for their loved ones during initial
feedback meetings. Many carers indicated that the concept of “not for profit”
provision was more acceptable.
• There is a potential risk of a service provider offering vacancies in supported
living accommodation to people currently living outside of the County, ultimately
leading to funding becoming SCC’s responsibility under ordinary residency
rules. There could also be additional costs falling on NHS Somerset. There
may be opportunities to mitigate these risks through SCC’s interest in the
property assets utilised by the LDPS, including those originally purchased using
Section 28a funding. These opportunities will need to be considered further in
the development of the full business case.
• Contracting with a single provider for these services, which currently account
for over half of the expenditure, may reduce choice and service quality unless
robust contract management processes are put in place and adequately
resourced.
• The service, as it stands, is in the process of significant reconfiguration that is
scheduled to be completed by March 2014, and potential bidders are likely to
price the risks associated with completing this into any bid. In the medium to
long-term, this would be expected to exceed the short-term costs of
accelerating the process so it is completed before any transfer takes place.
• A full reassessment of all residential care and supported living care packages is
undertaken in advance of any transfer in order to mitigate some, but not all,
risks related to cost escalation. This will need to be undertaken in addition to
normal care management activity and will therefore incur additional costs.
• In the short-term at least there would be double funding of overheads, including
some of those associate with Southwest One where they relate to activity that
is not releasable.
• The risk of the new service provider(s) failing within the contract duration
cannot be completely ignored. There would be extremely high levels of risks to
vulnerable people as well as operational, financial and reputation risks to SCC
should the new provider fail due to the specialist nature of the services provided
A - 28