| SPOTLIGHT |
The personalisation agenda is set to fundamentally change the way in which supporting people funding is allocated. Ronnie Tong and Nick Billingham look at some of the legal issues facing providers of care, including social housing providers who also provide support services or who work with third party support providers.
The proportion of service users on personal budgets in the last year has already doubled so personalisation is already under way. Some 13% of disabled adults, older people and carers who used community services were receiving personal budgets in 2009-10, up from 6.7% in 2008-9. It is estimated that this trend will continue with more and more service users taking control of their budgets.
Personalisation
Historically, individuals in need of community services would have their needs assessed by a social worker and then be told what services they require and the provider of that service. The Personalisation Agenda now places more control in the hands of the service user. Every eligible person who receives support provided by statutory services will have the choice of personal budgets under Personalisation. This will mean that service users will be able to manage their own budgets and buy their own support services.
The idea is that giving more choice to service users will potentially make them more independent. However, with the increase in service users opting for personalised budgets this will create a number of problems for service providers.
Reduction in funding
When service providers tender for services from local authorities, a budget is normally agreed to be paid to the service provider for the duration of the contract to provide support services. However, if a number of service users opt for personal budgets during the life of that contract, it is likely that the local authority will reduce the funding to the service provider. Local authorities will make direct payments to the individual service users so they can purchase their own support services.
The service providers overheads, such as staffing, will remain the same but with a reduction in the funding by the local authority this will potentially make the cost of the running the service financially impracticable. Service providers may then have to make decisions in terms of either cutting overheads (e.g. redundancies, reductions in pay etc) in order to make the provision of the service financially viable or in the worst case scenario serve notice of termination on the contract.
Changes in the business model
Service providers that normally rely on large scale supporting people contracts may have to start considering targeting self-funding customers, which will mean establishing a different business model. Service providers will also have to adapt the manner in which they market themselves and rather than telling purchasers what services they can offer, they may have to start listening to purchasers to establish the type of services they require.
TUPE
One of the biggest concerns for service providers who historically rely on large scale contracts is the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE). Traditionally when a service provider inherits a contract from another provider there is a service provision change under TUPE. The new service provider will inherit all the employees who were working on the undertaking which is being transferred to the new service provider.
In theory, a service provision change could occur if a service user decided, under personalisation, to purchase care services from another provider. If there has only been one employee working for that individual service user, it is possible that the employee could transfer to the new service provider under TUPE.
However, in the case where an employee is working for three service users and all three services users decide to purchase services from three different providers it is unlikely that TUPE will apply due to the fact that the services have fragmented to such a degree it would be impossible to identify which new service provider the employee should transfer to.
If the employee did not transfer to the new service provider this could potentially result in the employee being made redundant. Furthermore, if the employee originated from the local authority and remained on his/her original terms and conditions, redundancy costs and associated pension liabilities could be significant.
One way service providers could mitigate against this would be to ask the contracting local authority to indemnify them against redundancy costs in such situations. However, it is highly unlikely that a local authority would agree to such an indemnity particularly if this is sought after the contract has been entered into.
Alternative staffing models
Another way to mitigate against potential redundancies is to reassess the manner in which service providers staff their schemes. Due to the uncertainty of the required staffing levels for the duration of a large scale contract, employers may opt to place more employees on zero hour contracts or hire ‘bank workers’. However, this can cause problems in terms of the quality of service provided if the zero hour employees or bank workers do not work regularly and are unfamiliar with the policies and procedures of the employer.
Conclusion
Whilst the idea of personalisation seems to give great benefits to individual service users (more independence, greater choice, cheaper services etc) it does present a number of concerns for service providers. In particular service providers who are tendering for large scale contracts at present should bear in mind the possibility of losing a number of service users through personalisation and consider whether they would be able to operate the services with a reduction in funding due to personal budgets.
And in the housing management context
One issue which is exercising registered providers (RPs) in the care and support sector is the extent to which residents who accept a package of support services can withdraw from some or all of those services on the basis that they should be able to pick and choose as a result of the Personalisation Agenda.
For example, some residents in a sheltered housing scheme may decide they don't need or want warden services and want to spend their support money elsewhere. The question naturally arises whether they can do that unilaterally and what then happens to the warden if support payments reduce or stop as residents decide to buy other support services. Quite possibly the warden may have to be made redundant.
And of course, Supporting People (SP) authorities are also going to be looking to support providers they contract with to provide more flexible, innovative services. In other words, if services are not wanted by residents and the RP is not able to provide services which residents want, the RP is unlikely pass a QAF inspection and could risk decommissioning anyway.
So how do RPs in the supported housing sector deal with this? The answer from government and support advice agencies appears to be that support providers will need to be more flexible in how they provide support so that the residents have a greater choice in how they spend their individual budgets. This should mean that residents are less likely to try to withdraw from the support provided. But "should" is not really good enough. So how do RPs protect against residents withdrawing from services?
One option which has been piloted already is for the support recipient to be required under their support contract to pay towards certain 'core services' and then have an option to choose from a menu of optional services. There is no reason why the recipient of the support should not be required to choose from options made available by the particular support provider. So long as wide enough choice of services is provided in addition to the core services (which could include for example a warden service or an alarm call service) then the objective of personalisation and choice is achieved without undermining the scheme itself.
Of course, the extent to which support services can be treated as core services and others as optional services depends on the nature of the scheme. For example, an RP running a women's refuge could justifiably require an incoming tenant to accept a menu of standard support services with very little, if any, optional services. This is simply because the needs of women in a refuge are likely to be very similar and the support required very similar. The same could apply to a residential care home or an extra care scheme.
The issue of choice and optional services really arises in the context of schemes where the needs and backgrounds of the residents are more diverse. So, in a sheltered housing scheme, one increasingly finds very different needs as between 55 year olds and 80 year olds living in the same scheme. In these situations, the expectation will be that the RP provides a lot more choice, and the core (obligatory) services will be more restricted.
In summary, choice is a key ingredient of personalisation but choice does not mean a free for all.
Ronnie Tong is a solicitor specialising in employment and Nick Billingham is a partner and head of the housing management department at Devonshires. Ronnie can be contacted by email at This email address is being protected from spambots. You need JavaScript enabled to view it., while Nick can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..
