Examination of Witnesses (Questions 140-159)
MR JOHN
BACON, MR
MARTIN CAMPBELL,
MR ANDREW
FOSTER AND
MR CRAIG
MUIR
28 OCTOBER 2004
Q140 Dr Naysmith: In future that will
be the information you give us?
Mr Bacon: Again, my understanding
is that is what we are looking to move to.
Q141 Dr Naysmith: It will be slightly
difficult to compare with the existing methods.
Mr Bacon: Clearly, if you change
the method of count, you have to make some estimate of transition
but I think it does reflect a better measure of activity.
Q142 Mr Burns: PSS, who is actually doing
that part?
Mr Muir: That is me.
Q143 Mr Burns: If you look at table 4.1.4
you have set out the unit costs for various PSS from 1998-99 to
2002-03. The figures indicate that there are real term unit costs
supporting older people and residential care has increased. You
comment—and I quote—". . . this rise may have
been associated with better or more intensive services . . . and
changes in cost or efficiency". Are you able to tell us more
precisely exactly what the increased unit costs indicate?
Mr Muir: I think it is very difficult
to get much below those figures. Over time I think the Commission
for Social Care Inspection, and the SSI's predecessor body, have
found that residential and nursing home costs have gone up and
quality has gone up. It is quite difficult to get a systematic
relationship between those, particularly at local level and at
individual level.
Q144 Mr Burns: If I can just ask you
my next question. There is an increase in quality as well as a
rise in cost?
Mr Muir: Yes.
Q145 Mr Burns: Can I just ask one thing
for clarification. If you look at the chart itself that has been
produced, it talks about gross expenditure per week and it is
broken down to unit cost price. When it says gross expenditure,
does that mean the actual cost of providing the service or the
actual cost that local social service departments are paying for
the service?
Mr Muir: You mean net of charges,
is that what you are getting at?
Q146 Mr Burns: Yes.
Mr Muir: I think it is the gross
cost not taking account of charges but I could not swear to that,
I could get back to you with a definite answer on that.
Q147 Mr Burns: Local authorities pay
X pounds a week per client to a home, but that might not necessarily
be the actual cost to the home that is providing the service,
and I was just wondering about that explanation.
Mr Bacon: I am fairly confident
that the number you see in there is the cost to the local authority
of placement.
Q148 Mr Burns: Sorry, cost to the local
authority?
Mr Muir: The gross cost to the
local authority, in other words funding the local authority placements.
Q149 Mr Burns: So it is not necessarily
the cost of the service?
Mr Muir: Of course that is a combination
of the actual cost they pay to run their own facilities and the
amount they pay to a private sector or a voluntary sector to run
theirs. I am fairly confident what it is but if it is not that
we will let you know.
Q150 Mr Burns: There is a belief abroad
that a number of social service departments use their power of
purchasing to force down the prices that they are prepared to
pay to residential homes, particularly medium and small sized
ones who are weaker economically, by offering them X amount a
week on a take it or leave it basis. The leave it basis sometimes
means that a home would then have to go out of business. Do you
agree with that belief?
Mr Muir: I think that councils
negotiate fee levels and decide fee levels in the light of local
circumstances including what the market conditions are, what the
supply of care home places are and their overall policy in terms
of the mix of intensive support at home or in residential homes.
All those factors as well as local costs factors need to be taken
into account. The guidance the Department gives in this area is
that you should have proper negotiations and discussions with
all the parties involved and that you do take into account all
of those factors which I have just mentioned and that the discussions
should reflect the real cost to the provider of providing the
service. It has to be for the local authority to decide what level
of fee is appropriate in the light of all of those conditions.
Q151 Mr Burns: Have you ever had any
personal experience of these negotiations?
Mr Muir: I have not had direct
experience of a local authority negotiation but I have chaired
a group of local authority representatives, provider representatives
and so on talking about this very issue.
Q152 Mr Burns: Can you explain to me,
in the light of everything you said, if you take Rowntree Trust
figures, Laing and Buisson, if you were to talk to Essex Social
Services department—and just to make the point I will give
you some figures to illustrate it—why is it then that when
Essex, for example, owned their own homes, they were charging
in effect about £600 per client a week, the homes where they
placed residents that were privately owned they pay about £350
a week?
Mr Muir: It is very difficult
to get comparisons between the costs, and I think you are talking
about the costs of the local authority home rather than the fees,
because it is quite difficult to get comparable costs between
local authority provision and private provision.
Q153 Mr Burns: To be fair, if you make
the point that I have just made to Essex County Council, they
would not be taking your line and disputing the figures, they
would say "Yes, we do".
Mr Muir: I have not disputed the
figures, I am saying it is quite difficult at a general level
to get very comparable figures partly because councils associate
the costs in different ways in accountancy terms but also because
private organisations do not want necessarily to tell us what
their costs are because that is commercially confidential. I think
I do accept there is probably a differential in cost between the
private sector—
Chairman: Is not a fairly obvious reason,
certainly from my experience—
Mr Burns: Do not feed him the answers.
Chairman: I am not.
Q154 Mr Burns: Let me finish. I have
not finished questioning him. When I have finished questioning
him maybe then you can try and bail him out. Let me just carry
on for the moment. You have accepted that but what you have not
answered is why does it happen?
Mr Muir: There could be a number
of reasons for that. One might be that they are less efficient,
I suppose, but another might be there is a greater dependency
in council homes.
Q155 Mr Burns: Not necessarily.
Mr Muir: In a sense, the provision
of the commissioning of care has to be done through best value
so a council will need to take account of the quality, the outcomes
and the cost in doing that.
Q156 Mr Burns: Are you familiar with
the Competition Tribunal decision in Belfast on this issue?
Mr Muir: Is this the super complaint
you are talking about?
Q157 Mr Burns: Yes.
Mr Muir: Yes
Q158 Mr Burns: Why does this not apply
on mainland Britain or even England?
Mr Muir: The position is different.
Q159 Mr Burns: Why?
Mr Muir: I am afraid I would have
to look into the details of that and give you a note.
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