Service Reviews â Outline Business Case - Somerset County Council

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(Cabinet – 2 May 2012) • Could be implemented as part of a phased approach, allowing SCC to better manage risk through the transition phase. • Would allow the LDPS to build a strong brand identity and reputation ahead of any future open market tender exercise and could potentially enable current service to bid within any future tendering process. • Would allow the LDPS to develop a user centred and outcome focussed service delivery approach, in line with customer and commissioner expectations ahead of any open market tender exercise. • Would enable SCC to retain access to the capacity to tackle struggling providers for a given period and therefore discharge its statutory responsibilities with the new organisation acting as “provider of last resort” for adults with learning disabilities. • Would enable the service to become more responsive around issues such as staff recruitment and deployment. Whole service open market tender • At initial feedback meetings, a number of service users expressed a desire to direct their own care through a direct payment, which an outsourced organisation would be risk of them choosing alternative providers therefore increasing unit costs. • Carers could not see the benefit of a two step approach as legally we would probably need to tender the services within 3 years. • There would be extremely high levels of operational, financial and reputation risks to SCC should the new entity fail. • Initial financial and resource outlay will be high. • It is estimated that the implementation would take a minimum of 1 year due to the high level of complexity. • The level of risk could be high for an organisation of this (small) size until well established. This would be elevated risk during the first year unless skilled management with proven business acumen is embedded in advance of the externalisation. • Should the externalised organisation fail to win any tender at the end of the initial contract period SCC could be responsible for funding any resulting costs. It would also be responsible for funding any one-off costs as a result of service reconfiguration. • Contracting with a single provider for these services, which currently account for over half of the expenditure, may limit choice and service quality unless robust contract management processes are put in place and adequately resourced. • Costs are likely to remain higher than an outsourcing arrangement due to the need to the need to continue to procure back-office services from SCC and/or Southwest One or set them up from scratch. • A full reassessment of all residential care and supported living care packages will need to be undertaken in advance of any transfer in order to mitigate some, but not all, risks related to cost escalation. This will incur additional costs. • Two big changes in 3 years could generate unnecessary anxiety amongst vulnerable users. • Initial financial and resource outlay will be very high and this option would be likely to require a dedicated team to implement • Due to the size of the service, and the need A - 8
(Cabinet – 2 May 2012) free to provide. • The entire service can be evaluated against current market rates, potentially resulting in the service being outsourced at a lower cost than the current LDPS budget. • There is a reduced risk of service failure subject to adopting a robust and wellmanaged tender process, eliminating any “weak” bidders at the outset. • Would be a single-step approach. • A lead provider could sub contact. This would facilitate the participation of small providers that might otherwise be “crowded out” by Option C, externalisation. • Would allow the service to rapidly adopt best practice from the successful bidder • Outsourcing the LDPS as a whole would provide opportunities to reduce operational overheads as bidders would be likely to already have resources that could be extended, allowing the overheads to be shared across a broader range of services, rather than newly established. • We would expect to favour bids that include opportunities for external capital investment. • While the tender process for a large outsourcing exercise is complex and time consuming SCC would avoid potential ongoing complications relating to the Teckal exemption. • A competitive tendering process should encourage cost efficient bids that drive out savings. The tender and evaluation process would ensure that these were sustainable. to carefully involve people who use the service and carers at all stages of the tender and evaluation process, it is estimated that the implementation would take a minimum of 1 year • There are significant and complex property issues, 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. • 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 which need consideration within 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 limit choice and service quality unless robust contract management processes are put in place and adequately resourced. • A full reassessment of all residential care and supported living care packages will need to be undertaken in advance of any transfer in order to mitigate some, but not all, risks related to cost escalation. This will incur additional costs. • In the short-term at least there would be double funding of overheads, including some of those associated with Southwest One where they relate to activity that is not releasable. Stakeholder engagement activities have been held to inform the development of this Outline Business Case. The preferred option was:- • From service users: - There was no clear preferred option, however, the most important issue was that the staff that support them stay the same. A - 9
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Service Reviews â Outline Business Case - Somerset County Council