Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 19th October, 2011
Report of the Cabinet Member for Social Care and Health
Adult Placements Regional Procurement Hub
Purpose of the Report
1. To seek Cabinet approval for the Council to become part of a proposed regional adult placement procurement hub that is being established by the South East Wales Improvement Collaborative (SEWIC).
1. That Cabinet approves the proposal that the Vale of Glamorgan Council joins the proposed SEWIC adult placement procurement hub.
2. That the Director of Social Services, the Director of Finance, ICT and Property and the Director of Legal, Public Protection and Housing (in consultation with the Cabinet Member for Social Care and Health, the Leader and the Deputy Leader) are authorised to agree a formal collaborative agreement with the other local authorities in SEWIC in respect of the procurement hub.
Reasons for the Recommendations
1. To ensure that long-term placements are procured in a cost effective way and meet service user needs.
2. To allow the unit to become operational as soon as possible.
2. With the support of Leaders and Chief Executives in each local authority, ten Directors of Social Services (Vale of Glamorgan, Bridgend, Cardiff, RCT, Merthyr Tydfil, Blaenau Gwent, Caerphilly, Torfaen, Newport and Monmouthshire) have formed the South East Wales Improvement Collaborative (SEWIC). They are working together to improve the provision and commissioning of social services in the region.
3. The collaborative has already established a pioneering Regional Commissioning Unit to negotiate with independent providers of fostering and residential placements for children regarding fees and service quality. The aggregate spending on Looked After Children by the ten SEWIC authorities is in excess of £81 million. Fostering services purchased from the independent sector comprise over £27 million of that expenditure and the figure was increasing rapidly (in excess of 30% per year). An early, independent evaluation of the Unit indicates considerable success. Price uplifts from providers have been avoided through collaborative negotiations. These are worth at least £500,000 per year across the region and exceed the direct costs of the regional unit by around 80%. Cost efficiencies and volume discounted prices have been achieved. Outcomes for children also appear to be improving. The report concludes: “It is striking just how far the authorities have travelled in a relatively short period of time” and it is anticipated that most local authorities in Wales will be applying to make use of the services provided by the unit.
4. On 19th January 2011, Cabinet endorsed the improvement projects proposed by SEWIC. This collaborative programme will help to provide the local authorities with an additional means of delivering service modernisation and cost effectiveness. One of the work streams is the development of a regional high cost/low volume adult placement procurement hub or brokerage point. This service will typically deal with placements for adults with a learning disability, a physical disability, functional mental health issues or sensory loss. It will provide a single process and a single point of contact for the local authorities when they need to engage with the independent sector provider market to make placements.
5. The development of this proposed service is in line with the recommendations made in the Simpson Report “Local, Regional, National: What Services Are Best Delivered Where”. This advocates that arrangements for collaborative procurement in social services are put in place across Wales in respect of high cost care packages for looked after children, mental health and learning disability, in particular.
6. Having developed a business case for the proposed procurement hub, SEWIC is now proposing that the ten local authorities agree to:
· establish a regional procurement/brokerage service to deal with demand for new residential and nursing home placements in the independent sector;
· co-locate the hub with the Children’s Commissioning Unit and explore the opportunities for shared resourcing and costs;
· seek to integrate the two services into a single regional high cost/low volume placement procurement hub under a single manager in two years; and
· approach the NHS, to encourage Local Health Boards to join the new brokerage service.
Relevant Issues and Options
7. When engaging with the social care and health service provider market to secure high cost/low volume care packages, there is a lack of coordination across local authority commissioners in terms of negotiating with providers, controlling and coordinating costs and monitoring standards. There is also relatively little contact with providers with regard to promoting the development of a range of services to meet service modernisation requirements and current and future demand.
8. The development of the regional procurement hub would help to address some of the identified shortcomings in the current arrangements by:
· rationalising the different and separate purchasing processes across the local authorities into a single agreed purchasing point of contact with the provider market;
· contributing to the management of the market by establishing a cost base line for differing levels of need, minimising negative competition for placements and preventing inconsistent cost outcomes between purchasers and providers;
· delivering a cost saving or cost avoidance for new placement activity; and
· feeding into and shaping the wider collaborative, partnership working and modernisation of commissioning approaches.
9. It is proposed that the brokerage hub will place all new high cost packages worth £600 or more per week. Based on predicted service usage, it is anticipated that the service would be used by this Council for five new placements each year.
10. As is the case with the Regional Commissioning Unit for children's placements, governance and financial arrangements for the unit will be set out in a detailed Service Level Agreement between all the participating authorities.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
11. The staffing and day-to-day management of the brokerage hub will be undertaken by Rhondda Cynon Taff CT which currently undertakes these responsibilities on behalf of the SEWIC Children’s Commissioning Unit based in Abercynon. By co-locating the two services, it has been possible to reduce the staffing costs for the Brokerage Hub. In addition, the Social Services Improvement Agency has made annual funding of £50,000 available from 2011-2013, to help establish the service.
12. It is proposed that the cost of the service will be allocated on the basis of anticipated usage. On current projections, the cost of participating in this project for the Vale of Glamorgan will be £8,815 per annum. This cost will be more than covered by the savings that are anticipated to accrue from adopting a regional approach to securing high cost adult placements.
Legal Implications (to Include Human Rights Implications)
13. SEWIC is taking legal advice from Cardiff Council about issues involved in the collaborative procurement of social care services.
Crime and Disorder Implications
14. There are no crime and disorder implications as a direct result of this report.
Equal Opportunities Implications (to include Welsh Language issues)
15. This service will be used for all individual placements that cost over £600 per week for clients with a Learning or Physical Disability.
16. This proposal will help social services to meet the following corporate objective:
· “To manage the Council’s workforce, money and assets efficiently and effectively in order to maximise its ability to achieve its service aims”.
Policy Framework and Budget
17. This is a matter for executive decision by Cabinet.
Consultation (including Ward Member Consultation)
18. This proposal has been the subject of consultation with the ten local authorities in the SEWIC area. There are no issues which affect individual wards specifically.
Relevant Scrutiny Committee
19. Social Care and Health
Cabinet Report 19th January, 2011
Carys Lord, Head of Business Management and Innovation
Corporate Management Team
Philip Evans, Director of Social Services