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ITEM
EX6
EXECUTIVE
– 30 SEPTEMBER 2003
REVIEW OF
THE IMPLEMENTATION OF THE FAIRER CHARGING POLICY
Report by
Director for Social & Health Care
Introduction
- On 17 September
2002, the Executive agreed the implementation of a new charging scheme.
The new scheme was based on the Government’s Fairer Charging guidance,
and followed a period of consultation over the summer of 2002. The Executive
asked for a report back on the implementation of the scheme within 12
months.
- This report highlights
the progress in implementing the new scheme, and the key issues that
have arisen which the Executive need to address. A draft of the report
has been considered by the Social & Health Care Scrutiny Committee,
and its views will be reported at the meeting. At the request of the
Scrutiny Committee, a glossary of key terms and benefits is included
as an Annex to this report. (Download
as .doc file)
Progress
on Implementation
- The main principles
behind the new charging scheme were to ensure that, all charges were
fair, and that an individual’s payment was based on both the services
they received, and their ability to afford the charge. The Government
set down a minimum level of income, below which the Council could not
raise charges. This minimum level was set at the appropriate level of
income support, plus a buffer of 25%.
- A second key element
of the new charging scheme was to ensure that, where disability related
benefits were taken into account when determining a client’s income,
then the Council also needed to take into account all disability related
expenditure. This involves a full financial assessment for each client,
undertaken by way of personal visit.
- A third key aspect
of the new scheme was a requirement on the Council to provide a comprehensive
benefit support service to clients, to ensure all clients were aware
of their entitlement, and were supported to claim their entitlement
where requested.
- The Government
set a two stage timetable for implementation of the new scheme. Under
Stage 1 of the scheme, all clients in receipt of income support and
no other benefits had to be exempted from charges from 1 October 2002.
Further, all new clients, plus all clients receiving in excess of ten
hours home support a week, should have received a financial assessment
under the new guidance, and their charge adjusted accordingly.
- Stage 2 of the
guidance set a deadline of 1 April 2003 for all other clients of the
Directorate to have undertaken a new financial assessment, and have
their charges amended accordingly.
- The late notification
from the Government of the final scheme, and the delayed publication
of the practical guidance, have meant we have not been able to adhere
to the Government timetable. All clients on income support only, were
exempted from charges with effect from 1 October 2002. However, reviews
of all clients with an excess of 10 hours home support were not concluded
until earlier this year. In all cases where the new assessment led to
a reduction in charges, this reduction was backdated to 1 October 2002.
Where charges increased as a result of the new assessment, the increase
was implemented from the week following the notification to the client
of the increase.
- We are still in
the process of undertaking assessment visits to current clients (it
should be noted that we have some 4000+ clients, with a regular turnover,
and five visiting officers). The same rules apply in terms of the date
any revised charge is effective from i.e. all reductions are back dated
to 1 April 2003, whereas all increases only become effective in the
week after the client has been notified. There are around 1,000 existing
clients still awaiting a fairer charging assessment, and it is expected
that all visits will be completed by the end of December 2003.
- The Council does
have in place contracts with Age Concern, and the Citizens Advice Bureau’s
for the provision of the benefits advice service required under the
regulations. Age Concern have provided an interim report on their performance
against contract for the 8 months to the end of June 2003. In that period
they have assisted 181 clients to claim additional benefits of over
£450,000. Over £250,000 of this sum relates to additional Attendance
Allowance claims, with a further £110,000 relating to increases in Income
Support.
- Age Concern have
found that they are running a waiting list for the provision of the
Benefits advice service. They see the processes becoming more complex
with the introduction of the Pension Tax credit system in October. They
have therefore proposed an increase in their current Service Agreement
of £25,000 to allow them to employ one further Advice officer. The funding
for this would come from the increased income generated from the increase
in Benefits payable.
- In setting the
budget, the Council allowed for an overall loss of income from Fairer
Charging of £1.5m. The results to date suggest that this may have been
an over estimate of the total losses:
- There were 244
clients on income support only who stopped paying charges on 1 October
2002. This led to a loss of income of £71,700 in a full year.
- To date, a further
329 clients have had their charge reduced to zero following a financial
assessment. The vast majority of these are clients in receipt of benefit
payments, who previously contributed 50% of their benefit by way of
charges. With the new minimum level of income, plus the inclusion
of disability related expenditure, these clients are now deemed to
be unable to afford to contribute towards their care. The loss of
income in respect of these clients is £387,400 in a full year.
- The revised
financial assessments of a further 700 clients had been processed
at the time this report was prepared. Whilst a number of these clients
had seen their assessed charge go down, around 500 clients have seen
an increase in their charge. This will bring in around £229,500 additional
income a year.
- One of the main
reasons for this increase in income is the success of the Benefits
advice service. As noted above, the service has helped bring in over
£450,000 of new benefits, of which an element will find its way into
increased charges payable. Other reasons for increases are that people
had not previously declared all income, that people have very little
disability related expenditure so that we have been able to charge
against a higher proportion of their declared benefits, or that we
now include in our financial assessment the severe disability premium.
- Calculating the
likely final losses from the new charging scheme has been difficult.
This is because income levels have also reduced as a result of the reduced
client numbers following the re-assessments against the new care eligibility
criteria. The total losses arising directly from Fairer Charging are
now seen as less than £1m. After allowing for the loss of income in
respect of reduced client numbers, it is now predicted that there will
be a small surplus of income this year. The exact size of this surplus
is still being reviewed, and will be reported directly to the meeting.
Key Issues
- The implementation
of the scheme has led to very few issues to date, and we have had very
little correspondence on either the re-assessment process, or the resulting
changes in charge levels.
- Two issues have
been raised through Age Concern.
- the inclusion
of Severe Disability Premium (SDP) in the income assessment.
- the implementation
of the charging scheme in respect of clients attending independent/voluntary
day centres.
Inclusion
of SDP in the income assessment
- The inclusion
of SDP in the income assessment has led to an increase in the charges
paid by a number of clients. The consequences for the individual client
are variable, dependent on the level of disability related expenditure.
Where a client receives all their care direct from Social & Health
Care, or from immediate relatives (the costs of which are not allowable
as a disability related expense), then the impact can be significant.
For a client on middle rate Disability Living Allowance, and SDP, but
with no disability related expenditure, then the charge will have risen
from £19.15 a week to £55.72. The impact will clearly be reduced where
disability related expenditure is identified.
- Whilst the issue
has been raised by Age Concern, we have had no complaints direct from
clients on the issue. (It should be noted though that Age Concern are
providing the benefits advice service to clients under contract to the
Council, and that therefore their letter is reflecting comments raised
directly with them by clients). The initial paper on the Fairer Charging
Regulations, which was presented to the Executive on 19 February 2002,
did draw attention to this issue. The inclusion of this benefit in our
income assessment was a direct consequence of the Government including
it in the examples contained in the Fairer Charging Guidance.
- The decision for
the Executive on this issue is simple. The concern is that by including
SDP in the income assessment we are disproportionately impacting on
the most vulnerable – i.e. those clients living alone, with some form
of disability, and on low incomes. It is also argued that this group
is often the least able to understand the processes for identifying
disability related expenditure, and therefore may be paying more for
their care than they can really afford. It should be noted though that
all clients are assisted by the visiting officers, who have a prompt
sheet to help identify all disability related expenditure.
- The options for
change for the Executive are therefore to exclude SDP from the income
assessment, or to exclude a fixed proportion of the SDP to allow for
disability related expenditure, which the client has not declared. In
the event of no change to the current scheme, it should be noted that
the Council does operate a waiver scheme to deal with any exceptional
cases of financial hardship.
- Excluding SDP
from the income assessment is estimated to reduce the total income to
the Council by £900,000. A significant number of clients with SDP would
find their charges drop to zero, after allowing for disability related
expenditure. Others would pay no more than £12.77.
- This forecast
figure of £900,000 is based the completed assessments to date, projected
forward to cover the outstanding assessments. The actual figure will
vary from this forecast, but it is unlikely that any variation will
be significant. If the Executive wishes to exclude SDP from the income
assessment, it would therefore have to identify alternative budget savings
in the region of £900,000.
- Allowing for a
fixed proportion of SDP to cover disability related expenditure would
also lead to a loss of income. Based on the Age Concern proposal of
a disability related expenditure allowance of £20, the loss in income
would be in the region of £150,000. Clients would pay no more than £35.72.
Clients would have to make a case to the visiting officer for disability
related expenditure in excess of £20.
- This second option
may mean that clients with no real disability related expenditure, pay
less than they can actually afford. There may also be pressure to introduce
the £20 allowance to all clients, rather than as a specific allowance
against SDP. We have no accurate figures as to what the potential loss
of income would be if all clients were given a standard £20 allowance,
but it is likely to be between £0.5m and £1m.
Impact
on Independent/Voluntary Day Centres, and their clients
- The second concern
raised by Age Concern relates to the implementation of the fairer charging
scheme in respect of clients attending independent/voluntary day centres.
The concern here has been echoed in a number of letters from the management
committees of the day centres themselves. There has been no correspondence
from the clients themselves, but they may not yet be fully aware of
the issues involved.
- The concerns from
the day centres followed a series of meetings led by the charging team,
which set out how the new scheme would impact on the clients of the
day centres, and the centres themselves. It is clear that the centres
themselves had not realised the implications during the formal consultation
period.
- The main changes
for the day centres themselves would be that they were no longer able
to set their own level of charge for those people attending the centre,
who were deemed to be clients of the Directorate. For the client, there
would be a new standard charge, irrespective of which centre they attended,
with the actual amount that they paid, determined by a full financial
assessment.
- The concerns raised
by the day centres include the following:
- The proposed
charge of £4.50 plus meals is higher than current charges, (in some
cases up to 3 to 4 times higher)
- Loss of local
autonomy for management committees
- Restriction
on centre’s ability to raise funds and/or additional income
- Costs of additional
bureaucracy
- People attending
centres currently unaware they are clients of Social & Health
Care, and with no wish to be so
- People paying
different charges will be divisive to the current happy day centre
communities
- The underlying
concern is the implementation of the fairer charging scheme across the
independent/voluntary sector will lead to a drop in client numbers.
This will stem from people refusing to pay the sharp increase in charges,
their wish to avoid a financial assessment, or a reluctance to be seen
as receiving support from Social & Health Care. A drop in client
numbers could in turn make some of the centres financial unviable, so
in turn reducing the provision for those willing to pay. If these concerns
were to materialise, this would have a serious impact on the Council’s
preventative strategies, leaving many older people alone and vulnerable
in their own homes, and drive up the care costs for this group in the
longer term. The fairer charging guidance makes it clear that charging
schemes should not be implemented in a way which produces outcomes counter
to the overall policy direction of the authority.
- A series of meetings
have been held with Age Concern, representing the voluntary/independent
day centres. Officers have attended a meeting arranged by Age Concern,
also attended by 23 representatives of independent/voluntary day centres.
- It is accepted
by all that the Fairer Charging regulations must be applied to the 50%
of clients who attend day centres in addition to a home support package
arranged through Social & Health Care. As part of the recent meetings
with Age Concern, it has now been agreed that only those clients with
a formal assessment will be counted as a client of the Directorate,
and fall under the fairer charging scheme. The loss of those clients
previously subject to an informal assessment by Centre staff, will impact
negatively on the key performance indicator, which measures our success
in helping people live at home. Officers are looking at alternative
ways to ensure that individuals receiving care at establishments receiving
financial support from Social & Health Care, can be included in
the performance indicators.
- Having decided
that day centres cannot be excluded from the fairer charging scheme,
officers have looked at ways other aspects of the day centres concerns
can be minimised. The Council has examined the possibility of reducing
the level of bureaucracy for the centres. Each month the Charging Team
will send a set of weekly registers to each centre listing the clients
due to attend the centre. The centre simply needs to complete the register
for daily attendance and return the registers on a monthly basis to
the charging team. All aspects for collecting charges will be undertaken
by the charging team as part of the normal income collection procedures.
This procedure matches that currently working well for day centres for
clients with a learning disability.
- The use of registers
in this way minimises bureaucracy, will provide useful management information
around activity levels to support the payment of grant under the service
level agreement, and ensures staff and clients at the centre are not
aware what contribution, if any, each client is making. This should
reduce the fear that the implementation of the system will create a
division between those that pay, and those that receive their care free
of charge.
- Centres will be
fully re-imbursed for the loss of any income previously collected through
charges determined by the centre themselves. This will be actioned through
changes to the service level agreement and the associated grant and
will be dependent on regular monthly returns from the centres. The costs
of the changes were included in the total costs built in to the Council
budget in respect of the impact of the fairer charging changes.
- The issue of loss
of autonomy in setting charges based on the overall financial situation
of each centre is not one that can simply be addressed. There has not
been a consistent approach to the funding of older people’s day centres,
and this has led to attendance charges being set at different levels
by the day centres, reflecting their running costs, any overheads, and
any other income. It is proposed that in order to smooth out these variations,
that the future attendance charges should be considered as part of the
service level agreements, when reviewing the level of grant payable
by Social & Health Care.
- In terms of the
principal concern that people will refuse to pay, or refuse to undergo
a financial assessment, the Council has limited options. The charging
scheme does allow a client to forego a financial assessment, if they
are prepared to pay for the full cost of their service. The Council
though will need to work closely with those people who cannot afford
to pay for the service, but are initially unwilling to undergo the financial
assessment to determine an affordable charge.
- The Council does
have the option to reduce the level of charge set for day care attendance.
This was set at £4.50 a day for all client groups in September 2002,
based on the charge for people with a learning disability. If charges
are reduced then the Executive needs to consider whether the reduction
is applied across all Client Groups. A differential adjustment may be
justified in terms of the difference in costs in running individual
day centres.
- The option favoured
by Age Concern, and largely accepted at the representative meeting would
be to have a range of day centre fees, based on the nature of the service
provided. Charges would be set at 50p intervals starting at 50p a day
where services are almost entirely voluntary, and provided in community
facilities, and ranging upwards where services are provided in purpose
built facilities, with a largely professional staff.
- Charges in the
first year would be set based on the current fee levels at centres,
on the basis that the charge is a reliable reflection of the costs involved
in providing the service. In future years, charges would be agreed as
part of a re-negotiation of individual service level agreements with
each centre.
- Accepting this
option as a change to the current scheme would meet many of the concerns
of the independent/voluntary day centres, and safeguard the provision
of future services. There would be a loss of income against that included
in the budget of around £100,000, but this could be absorbed within
the overall income budget based on the figures included above.
- The option would
though meet with opposition from those attending day centres for a learning
disability. Representatives of this group have strongly argued that
equity of charge means equality of charge, and there has been considerable
concern expressed in the past that the most vulnerable are paying the
highest charge. The Executive needs to consider whether equity should
mean equality of charge, or a charge linked to the nature and cost of
the service provided. The Council current budgets for £200,000 income
from charges for day services for those people with a learning disability.
Reducing the charge to £3.50 would lead to a loss of income of around
£30,000. This would though maintain a consistency of approach in that
the charge would be directly related to the level and costs of service
provision.
RECOMMENDATION
- Subject to
the views of the Social & Health Care Scrutiny Committee, the Executive
is recommended:
- to
approve an increase in the Benefits Advice service agreement
with Age Concern, at an annual cost of £25,000, to be met from
the additional income resulting from the service;
- not
to make changes to the fairer charging scheme in respect of
the Severe Disability Premium, but to ensure the waiver scheme
is brought to the attention of anyone suffering exceptional
financial hardship as a result of the existing arrangements;
- to
agree amendment of the charges for day care from 1 October 2003,
on the following basis:-
- the
charges to be based on the level and costs of service provided;
- these
charges to be set at 50p intervals, initially in line with
current centre charges, but to be reviewed as part of future
service level agreement re-negotiations; and
- the
charges for the Council’s own day centres for people with
a learning disability being reduced to £3.50; the net cost
of £130,000 to be met from existing budget provision, including
the additional income resulting from the success of the
Benefits Advice service.
CHARLES
WADDICOR
Director for
Social & Health Care
Background
Papers: None
Contact
Officer: Sean Collins, Assistant County Treasurer (Social & Health
Care). Telephone: 01865 815370
September
2003
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