Will councillors vote for 'not viable' option?

by EWAN LAMB

The continued in-house provision of Borders adult care services is not viable in the medium and longer term, concluded a firm of consultants hired by Scottish Borders Council back in 2014.

Wolverhampton-based Care and Health Solutions [CHS] warned the council's direct provision of home care by its workforce of 850 carers with an annual budget of £17 million "would be likely to lead to an ongoing rationalisation of services and these services would therefore be vulnerable as a target for savings through service reductions."

The quality of service was bound to deteriorate and there could be a requirement to close facilities and possibly a need for 'reactive externalisation'. The CHS written appraisal of the in-house set up contained a bright red-coloured warning that it was 'not viable'.

However, it looks as though all of those dire predictions will be conveniently ignored later this week when SBC's elected members are being invited to plump for the in-house option to rescue the service. It follows the failings of SB Cares, the arms length company handed the adult care contract when councillors voted for its formation on the recommendation of their senior officers.

As we reported a few days ago virtually the same management team is now advocating the taking back of the crucial service into full council control after predicted savings were not achieved and the promised upgrade in services never materialised. And the malfunctioning business - known as a Limited Liability Partnership (LLP) - which emerged from CHS paperwork seems certain to be dissolved before the end of 2019.

Based on the CHS appraisal there could be serious issues ahead should council members sanction the in-house option.

Here's what the consultants had to say about in-house in their appraisal report setting out the choices available in January 2014: "In the current climate and given the service has already undergone reconfiguration and cost saving exercises, this option is unlikely to achieve value for money and will struggle to achieve savings and cannot generate external income. 

"Whilst this option allows flexibility in terms of policy initiatives and allows the Council to maintain ultimate control, it is inherently unsustainable and commercially inflexible. This option is preferable to most staff and service users, as there is a perceived level of job and service security. Achieving future savings will require significant reconfiguration of services which is likely to require the closure of some existing provision."

 And there was much more in the CHS document. It continued: "Financial and demographic pressures and consequential top down Government policy means that to continue in-house provision is not viable in the medium to longer term.

"As the Government follows its ambitions to increase the number of Direct Payment service users, the Council will ultimately bear the cost of both running a service and paying out Direct Payments which service users may not be prepared to pay the high cost. Eventually, the need to make savings will result in a stripped down service where quality is compromised and service user needs are unmet. 

"The benefit of this option would be a continuation of ‘business as usual’ and this enables the SBC to remain a direct provider and could continue to facilitate the management of the modernisation agenda. However, this would be likely to lead to an ongoing rationalisation of services and these services would therefore be vulnerable as a target for savings through service reductions. 

"This in turn could lead to a reactive externalisation not necessarily in a planned or productive manner which may not be in the best interests of the Council. Creating an internal business model either through zero based budgeting or creating a Direct Services Organisation will not deal with the inherent structural issues of providing the services from within the Council nor provide the appropriate commercial culture needed to achieve the required outcomes."

So clearly a high risk option, in CHS's view. As one local government observer put it: "If the in-house set-up was close to meltdown in 2014 then surely it must be far more dangerous now as demand grows and the number of elderly folks living in Scottish Borders rises. Will clients be faced with service cuts in the not too distant future, as forecast by CHS?"

It should be remembered that the council was told in no uncertain terms: "Doing nothing is not an option - without significant change the results will be increased costs and reduced service provision to residents of the Borders.

"The new organisation (SB Cares) will be more business focussed. It will not have to pay any Corporation Tax and will be able to maximise VAT opportunities available to SBC.

"The additional benefits from the new service are not available to the Council services as it is illegal for any council to deliberately sell its services at a surplus. The LLP has a legal right to sell services at a surplus."

Then came another panning for the in-house system in June 2014 when a full council meeting approved the LLP Business Case which included the following: "Without a significant change in approach and the application of a more balanced business-focussed approach to these service areas, costs will continue to increase, efficiency opportunities will not be maximised and fewer people will buy Council Services through Self Directed Support. This in turn will lead to reductions in service quality and availability and less future choice for service users and carers." 

The thick volume of evidence virtually outlawing in-house provision of adult social care surely makes it difficult if not impossible to justify the complete U-turn now being contemplated.