Examination of Witnesses (Questions 100
- 119)
TUESDAY 18 APRIL 2000
JANE KENNEDY
MP, SIR HAYDEN
PHILLIPS KCB AND
MR NICK
SMEDLEY
100. Would you see in the future that one agency
would get the contract as such for a particular locality? Is that
how you view the future of the visiting service?
(Jane Kennedy) It may be appropriate in some circumstances
but with the range of different client groups we are considering
it is more likely that the visits will be undertaken by organisations
that might have a specialist interest in that particular client
group. As I say, we are in the very early days of consultation
on this issue. We do not have a firm, clear view on who should
perform the visits. Our intention is to enhance the visiting role
and to increase the number of visits. As I say, we will listen
to representations that we receive.
101. Finally, when do you expect that consultation
will be completed?
(Jane Kennedy) Towards the end of this year.
(Mr Smedley) The consultation can be ongoing throughout
the next period of change. We will always be taking views but
it would help to have some formal written submissions perhaps
by the end of June, that is what I am saying to people.
Mr Stinchcombe
102. Just a couple of consequential questions
to those answers. You said that you have to start from first principles
and look to what the purposes of the visits are rather than trying
to shoehorn existing organisations into performing that role.
What do those first principles tell you? What are the purposes
of the visits?
(Mr Smedley) We do need to define this, that is why
I talk about first principles. What we are already clear about
is that the primary purpose of a visit must be to satisfy ourselves
that the financial affairs of the patient are being looked after
and that the money available is being applied properly to the
needs of that patient. That is the fundamental point. We do need
to go a bit further than that and define exactly what that means
and be clearer about that.
103. Is it not clear that if that is the purpose
then there would be conflicts of interest and a lack of independence
and impartiality with a number of the organisations previously
suggested to undertake the role? The Benefits Agency, for example.
(Jane Kennedy) It might be worth my just throwing
back, where is the perceived conflict of interest, for example,
in the Benefits Agency?
104. The Benefits Agency, on the one hand, are
trying to ensure that somebody gets the accurate amount of money
according to their needs and are also trying to audit to make
sure there is nobody over-claiming more than they would be entitled
to. I can readily perceive that somebody who is already fearful
of the all work test, or all sorts of things, would be less than
welcoming of somebody from the Benefits Agency offering a helping
hand in order to undertake the PTO role. Certainly I can see a
perception there likewise with the county council and social services
departments.
(Jane Kennedy) It is for that very good reason that
we would not be proposing that the Benefits Agency would be performing
the visiting function to patients but there might be a perfectly
valid reason for the Benefits Agency undertaking the visits to
receivers, to ensure that the receivers are performing their role
properly. This case is made very often to us and we are conscious
about there being a potential conflict of interest. It is also
made in the case of the Inland Revenue, there being a conflict
of interest potentially.
Chairman
105. We are coming on to this a little later.
Is that okay? Could I just ask a couple of questions, please.
What is the present range of costs of visits per visit? You know
how many visitors you have got, you know how much you pay them,
you know how many visits they do. It is hardly rocket science,
is it?
(Jane Kennedy) We will get that information to you
before the end.[8]
106. I will go on to the supplementary now.
If you make these changes what do you estimate that the visits
are going to cost if they are done by solicitors and accountants?
(Mr Smedley) May I just say something, Chairman. It
is not proposed that solicitors and accountants do the visits.
That is not one of the proposals we are considering and I do not
think it was a proposal from Ann Chant or from the Quinquennial
Review.
107. It is receivership work?
(Mr Smedley) Exactly, not visits.
108. Tell us about the costs you envisage—
(Mr Smedley) Where are we now, are we on the visits?
109. The solicitors and the accountants doing
the receivership work, what do you think you will have to pay
them to do that?
(Jane Kennedy) The point here is the funding of receivership
work and how the receivership work is paid for. Currently the
costs of receivership work, as we said at the beginning, are cross-subsidised
by patients in the Protection Division who have the bigger accounts
and clearly that is not acceptable. We do propose to move to a
flat fee basis. It is an interesting point to note that the current
calculations within the Public Trust Office of the cross-subsidy
involve an enormous amount of staff time and we estimate that
by introducing a flat fee structure we will save about £1
million a year in staff time which we can reinvest in the other
functions that we will be asking staff to undertake. That being
one point, I am going to ask Nick if he can pick the other one
up.
(Mr Smedley) The main costs in receivership services
are staff costs. We spend about £2.2 million a year at the
moment on staff costs. We charge a sliding scale of fees but our
proposal is to introduce one fee which is going to be £1,750
and fee remissions for those who cannot afford it. We have some
information about what the likely costs would be if solicitors
were to provide those services. Subject to what Sir Hayden says,
it would be commercially sensitive for me to share that with you
in public because we will be negotiating.
110. Would you like to drop us a note?
(Mr Smedley) Certainly, I am happy to do that. I think
the present services that we provide are rock bottom in terms
of both the fee that we charge and the service we are able to
provide from that fee. Because we cross-subsidise we can actually
provide much more than the £1,750 would buy. I mention that
point only to suggest that if we do go down the route that we
are talking about here we hope to provide much better services
but there may be a price tag on that.
111. When you say that these figures might be
commercially sensitive, what does that imply, that you are going
to invite tenders against prices you attach to it or are you going
to invite bids for prices that the applicants tie on it?
(Mr Smedley) No, I think what we would want to do
is discuss with different organisations both quality thresholds
and price thresholds.
112. Finally, what level of fees do you envisage
will be charged for those services which will continue to be provided
by the LCD?
(Mr Smedley) In receivership services the flat fee
will be £1,750 and in the protection area, where of course
we are only monitoring activities of lay receivers, we are not
doing the work, £205 is the fee we propose.
Chairman: Thank you.
Mr Linton
113. I am going to ask about the collection
of accounts but if I can just stay with the subject that we are
on at the moment because my second set of questions is particularly
on this point of the transfer of receivership work. It seems to
me to be generally acknowledged that if the work is done by solicitors
it will cost more, I think that is common ground. I have seen
figures quoted in the press of solicitors charging £18,000
a year for receivership services. Would you say that is well over
the odds?
(Mr Smedley) Can I comment on this? As the Minister
said earlier, the receivership services that solicitors presently
provide range from perhaps an old lady with Alzheimer's who needs
very, very little ongoing work, to a really significant care management
regime for a young man who has had a motorcycle accident. In the
latter case there will be quite substantial charges by the solicitor.
They are subject to regulation by the Court of Protection. As
the Minister was saying, if we can categorise cases that come
before the Court of Protection more carefully into sophisticated
specialist cases down to simple cases, the sophisticated specialist
cases will command a higher fee, but where we might have a trick
to make here is if we work closely with the civil courts so when
the judges make the award of damages, if they know what the price
regime that the Court of Protection will accept is, they can factor
that into their award of damages. That is how I would like to
try to meet that.
114. I appreciate there will be a very wide
range. Irwin Mitchell, one of the companies specialising in this
field, have been criticised for overcharging. I want some reassurance
from you that you do not fear that the average level of the cost
of receivership will be much higher? Clearly you accept that it
will be higher.
(Mr Smedley) Yes, I think it will be higher. Obviously
I do not know the details of the Irwin Mitchell cases but there
is an agreed fee regime between the Law Society and the Court
of Protection and that monitors the costs. I am not sure what
the particular criticism of Irwin Mitchell has been.
115. I think it is about the general level of
charges. Could I just come on to the other points about the transfer
of receivership, although I must admit I find the title very confusing,
I would rather call it "financial management". In the
Making Changes paper you talk about benefiting from a wider
range of skills but it does not seem obvious to me that solicitors
would have all the skills that currently are needed in people
doing this work which include a detailed knowledge of benefits,
of tax, of the law and also of mental incapacity and health. Do
you think that they would have these skills?
(Jane Kennedy) Yes. I think we have had indications
that there are those skills available to be contracted but, as
I said earlier, we are not only considering contracting receivership
work to solicitors, we are looking at the services that might
be offered by charities and organisations that are not for profit
and in the voluntary sector who specialise in particular client
groups and do particular work with certain clients and have specialisms
in that field. Therefore, we recognise there are those skills
out there and this is one way of harnessing those skills for the
benefit of the patient group.
116. Would you envisage any of the present staff
who deal in receivership transferring to other undertakings?
(Jane Kennedy) I would not say that would not happen,
there may be opportunities for some groups of staff. Certainly
it is one of the areas of work that staff have said to us they
find very rewarding and there may be individuals who would seek
employment continuing that role with these other organisations
that we are talking about. I would not rule that out.
117. Can you give us any estimate of how many
would be retained in the new set-up?
(Mr Smedley) We have an idea. It is just slightly
too early to give specific figures. If I can give a broad range,
deliberately broad, we are thinking of something in the region
of 150 to 250, so it is that size of operation.
118. As compared with the current number of?
(Mr Smedley) The staff in the Protection and Receivership
Division, which are brought together for mental health purposes,
there are something like 250.
119. 250 to maybe 150?
(Mr Smedley) There are 250 staff in Protection and
Receivership Services at the moment and then there is the Customer
Service Division, the investment staff and the support staff which
add on quite a few more. When we establish the new unit in total
it will be between 150 and 250, so it is significantly smaller
than it is now.
8 See Annex. Back
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