Supplementary memorandum by the Office
of the Deputy Prime Minister (HOM 53(a))
Thank you for your letter of 23 November to
Yvette Cooper, about the Supporting People programme. In Yvette
Cooper's absence on maternity leave I am replying as Minister
with responsibility for these areas. I hope my answers to your
questions are helpful in advance of the committee hearing on Tuesday.
Q1. Several providers of services to homeless
people have told us that their projects and planning are suffering
because of the uncertain nature of Supporting People funding.
Centrepoint, for one, told us of a proposed hostel project which
could not go ahead, despite capital funding in place, because
of a lack of Supporting People funding.
1a. Have you considered
mechanisms for removing some of the uncertainty in SP allocations
to allow for project planning?
I recognise that there has been uncertainty
around the funding of Supporting People but believe this is now
largely resolved.
The announcement for Supporting People funds
for this financial year (2004-05) was delayed and allocations
were not announced until February. This followed concerns about
growth in costs in the run up to the programme which took place
throughout 2002-03 and were only fully recognised in July 2003.
We commissioned an Independent Review to help us understand why
costs had risen and to help determine what was an appropriate
sum to pay for the SP programme. The Review reported in January
2004 and we announced funding for this year the following month.
Yvette Cooper reported to you on this work at your last session.
While an earlier announcement would have been
preferable, I believe it was right to wait for the findings of
the Independent Review to ensure that public money was not being
misused.
Announcements this year for funding in 2005-06
have been more timely. We followed the Independent Review with
work on value for money in the programme. These included bringing
forward Audit Commission inspections into 19 high cost authorities,
a large scale survey on costs of services and an analysis of data
received from authorities, These helped inform our discussions
with Treasury and other Government Departments about the appropriate
level of funding for Supporting People over the Spending Review
period (2005-06 to 2007-08). Seven weeks after the main SR04 announcement
I announced the three year funding settlement providing £1.72
billion in 2005-06, followed by £1.7 billion in each of the
years 2006-07 and 2007-08.
While this involves an overall reduction in
funding of 5% for next year, to provide some further certainty
for authorities, I undertook that no authority would face a reduction
next year of more than 7.5%. We have made clear to authorities
that savings should not be made through unilateral across the
board cuts. Efficiency savings should be identified through the
service review process.
I announced the individual allocations for authorities
for 2005-06 on the same day as the Local Government Finance Settlement
was announced and so we are now in phase with the main Local Government
(LG) timetable.
1b. Could you set out a timetable for application
and decisions on Supporting People availability and allocations
that you think could address the problem?
While we are now operating to the main LG timetable
this does not mean that all uncertainty has, or can be, eliminated.
We are developing a needs based distribution formula which will
help allocate funds to areas of greatest relative need. This formula
is well advanced and has been used to inform allocations for 2005-06
for those authorities which will face a longer term increase or
reduction in funding. Early next year we will consult on finalising
the formula and the rate and manner in which it will be used to
inform future funding decisions. To help limit the outstanding
uncertainty over funding I have committed that no authority will
face a reduction of more than 5% in its allocation in either of
2006-07 or 2007-08. I know that authorities facing reductions
cannot make these quickly and we will give careful consideration
to the pace of change in funding.
Decisions about funding for individual schemes
now rest with the local Supporting People authorities. It is for
each authority to decide how it will manage its funding, including
the development of new services. Savings can be achieved through
the service review process which can then be diverted to new services
or building the capacity of existing services that have a high
priority within the local Supporting People strategy. Work on
value for money (referred to above) has found that there are significant
savings that can be made across the Supporting People programme.
Authorities are now drawing up their 5-year
strategies for implementing Supporting People. These will contain
details of how authorities' key priorities will be translated
into deliverables. We have advised Commissioning Bodies, in drawing
up their 5-year strategy, they may wish to indicate where they
would make revenue available for development of new services.
Q2. We have been told that work with rough
sleepers is not eligible for Supporting People funding. Can you
confirm this? If this is the case, why is this important area
excluded?
The programme can provide housing-related support
to any vulnerable person who needs it. That would clearly include
support for rough sleepers in moving towards independent living.
The Supporting People programme funds a substantial
number of hostels providing housing related support to rough sleepers.
At the time of Supporting People going live in April 2003 expenditure
on rough sleepers amounted to £12.7 million. Additionally,
expenditure on single homeless people with support needs was estimated
at £288 million.
Q3. The Supporting People review process
has been criticised for concentrating too much on input over outcome.
The Audit Commission inspection was held up as a good practice
in this area. The length of the review has also been criticised,
and local authorities are currently behind in their project reviews.
This question is about the service review process
that authorities undertake to review and assess the services they
have inherited under the Supporting People programme. Before addressing
the specific issues raised it may be helpful if I explain why
we have required authorities to undertake these reviews.
Prior to the Supporting People programme, need
for housing related services was generally identified by providers
and authorities were not involved in deciding whether provision
was necessary or appropriate in their local areas. Costs were
covered through rental charges and clients would meet these charges
through Housing Benefit or, in the run up to SP, through Transitional
Housing Benefit. In effect there was little independent consideration
of whether there was a real need for the services required, whether
they were appropriate to the needs of users, or whether they offered
value for money.
The Supporting People programme was designed
(among other matters) to address these weaknesses. In April 2003,
150 administering authorities inherited about 37,000 contracts
under the Supporting People programme about which they knew very
little. We have required authorities to establish a programme
of reviews over three years (to 31 March 2006) to scrutinise each
of the inherited services. They must consider whether the service
is strategically relevant, appropriate to users' needs, of an
adequate quality, and provides value for money. This is part of
the process by which we ensure that public money is being used
for the purposes it was awarded and provides good value for money.
This is a considerable undertaking and it is not surprising that
some providers who, prior to Supporting People, were unused to
being scrutinised, find the review process challenging.
3a. Has any consideration been given to improving
the SP review process? Have other comparable inspections been
looked at for examples of good practice?
While the service review programme is necessary
to ensure that services meet user needs, represent a proper use
of public funds, provide value for money, and are of high quality,
I do recognise that the process is not being undertaken as consistently
as it should be and that some authorities are not implementing
it as effectively as they might.
ODPM undertook a review of the service review
process earlier this year. A short guidance note on best practice
in reviews was issued in August 2004.
Through our capacity building programme, we
are working with authorities to reduce the burden of the accreditation
process in line with guidance produced by the Office of Government
Commerce (OGC) and Cabinet Office report "Making a Difference
Reducing Bureaucracy in Central Civil Government Procurement"
published in December 2003 and the `Good Practice on Procurement
of Services from the Voluntary and Community Sector" published
by OGC and Home Office in June 2004.
3b. What feedback has the department received
itself on the review process?
The service review process was initially piloted
in December 2002 until September 2003 when feedback was sought
and guidance then amended in line with comments from both providers
and authorities. There has been no formal process for feedback
on reviews, however feedback is collected on a regular basis at
seminars and conferences and when visiting authorities.
3c. The current review process is very paper
based. Are there any plans to change this?
We believe the review process is necessary and
broadly sound, though we continue to look for ways to simplify
its operation. There is still plenty of scope for reviews to be
conducted more efficiently and in a more timely fashion and I
have recently awarded an additional £2 million to authorities
to help them complete reviews. Our service review positive guide
was issued in July 2004 and emphasises the need to take a pragmatic
approach associated with service reviews and that a standard service
review report should generally be no more than four pages long.
3d. As many reviews have not been carried
out before the new round of funding has been decided, we have
been told that cuts will therefore be made across the board, rather
than decided in the light of which projects have performed badly.
Is this true, and if so, is this fair?
It is for authorities to decide how to make
the efficiency savings we require based on their local knowledge
and priorities. However, we certainly do not expect authorities
to make across the board cuts and my letter to authorities announcing
this year's allocations makes this clear.
Q4. We have heard that applicants are having
to assemble staff teams and spend considerable sums of money on
their funding applications. Prime Focus estimated the cost of
this work to them as £130,000 at the least. At the other
end of the process, local authorities need to spend money on extra
staff to assess these applications.
4a. Are you aware
of these concerns? Are there plans to simplify the application
process or make arrangements to ease the administrative burden
on applicants and local authorities?
I am aware that the procurement process has
given rise to some concerns by both providers and administering
authorities. However, Supporting People services are no different
from other local authority services. Most local authority contracts
are now subject to rigorous review—such as best value assessment.
If a support provider wishes to win a contract to provide Supporting
People services it is likely that they will have to go through
some form of procurement process and there will inevitably be
a cost to this. Procurement costs normally form part of an organisation's
overheads which would then be recovered if the contract was won.
There may be certain exemptions from the full impact of European
regulations but decisions about procurement need to be taken by
the administering authority in accordance with both European regulations
and their own procurement strategies.
4b. Has any assessment been made of the cost
of administering Supporting People applications? Is the cost of
administration included in the central programme funding, or ring-fenced?
Each year we allocate to authorities an administration
grant to contribute towards the internal staff and IT costs of
delivering the Supporting People programme, this grant is un-ring
fenced and is separate to the programme funding. The total amount
awarded to authorities in 2005-06 is £40 million.
Costs incurred by providers are part of their
normal procurement costs of tendering or negotiating for contracts.
These are generally carried by the organisation's overheads.
4c. Organisations are facing cuts in Supporting
People funding next year. Can you assure us that this has not
risen because of rising administrative costs?
Yes. The reduction in funding for the Supporting
People programme followed the work we undertook on value for money
in the sector. The Independent Review identified wide variations
in costs between similar authorities and for similar services.
The Audit Commission inspections have identified substantial potential
for authorities to make efficiency savings. Other research (the
"Service Packages" work) has revealed wide variations
in provider overheads and costs per contact hour. Taken together
we believe there is a strong case that authorities can meet the
reduced funding levels through better management of their programmes.
Any cuts faced by providers next year should
only arise through negotiation or following a service review.
This is a separate issue to the administration of the programme.
Authorities cannot switch funds from Supporting People programme
to their administration costs.
Q5. Although assessment schemes for small
providers have been developed, their use is restricted to organisations
with less than one full time staff member and a contract value
of under £5,000. The six core objectives for assessment under
Supporting People is due to be extended in April 2006 by 11 supplementary
objectives.
This question is about the Supporting People
Quality Assurance Framework, it might be helpful if I give some
background to the Framework. The introduction of the Supporting
People programme provided a unique opportunity to introduce national
standards and measures, and the concept of continuous improvement
and acknowledged best practice. For the first time, Local Authorities
were required to oversee and commission local supported housing
services. Many were uncertain how to assess the quality or value
for money provided by services and sought guidance from ODPM.
In response, the Department set up the Quality
and Monitoring Steering Group in March 2002. The steering group
had cross-sector membership of all key interest groups—Local
Government Association, National Housing Federation, SITRA, Health,
National Probation Service, the Audit Commission, Housing Corporation,
Social Services, and local authority and provider representatives
plus a wider external reference group of around 40—with
extensive cross-sector representation. Clearly this included providers
and their representatives organisations including members of the
voluntary and community sector.
The first guidance was published in December
2002, followed by the nine months of testing of the original methodology.
The steering group worked with nine authorities and their providers
to obtain comprehensive feedback on all the products.
A series of road shows were also held over this
period, to obtain feedback, together with a further national consultation
exercise. Feedback was again very positive and was considered
in further developments. Revised versions of the QAF and Performance
Indicators were issued in spring 2004.
There were requests for a reduced and simplified
version of the QAF, for small providers and those with small contracts.
Following further work on this the QAF "lite" guidance
was produced and published on the spk-web last month.
Early proposals to extend the core objectives
by 11 have been dropped. The core objectives are not mandatory,
though some authorities may make the decision to apply these locally
based on local circumstances.
5a. Has thought been given to extending the
assessment scheme for small providers to larger, but still comparatively
small providers, for example those with up to 10 staff?
The quality of services provided to vulnerable
clients is at the heart of the Quality Assurance Framework (QAF).
The requirements of the QAF lite are no different to that of the
main QAF it is simply that the level of evidenced documented policies
and procedures which are less stringent. For example, a sole trader
would not be expected to have a written procedure for assessing
support and delivering support for an individual, but should be
able to inform the authority on how assessments and delivery of
support is carried out. However an organisation with 6 to 10 members
of staff would require a written procedure to ensure consistency,
understanding and delivery of support in relation to assessing
support and should therefore be reviewed under the main QAF.
Clearly there is a balance to be struck between
protecting clients from poor (possibly risky) services and keeping
audit and assessment to a minimum. Ultimately it is for an authority
to decide on whether to apply the QAF lite based on local knowledge
and an understanding of the risks facing clients.
5b. What assistance, if any, is planned for
small organisations faced with assessing another 11 objectives
in 2006? Is any funded support planned?
My officials have looked again at the proposals
and advise that the core objectives are adequate. In the light
of this, I have decided that use of the 11 supplementary objectives
will not be made mandatory.
Q6. It has been suggested to us that Supporting
People funding is being "transferred" from schemes funded
by Registered Social Landlords and the voluntary sector to those
managed by local authorities. Have you monitored the balance of
funding between the sectors? If so, do you agree with this assessment?
There is no concrete evidence to support this
suggestion. We are currently implementing a data collection system
which will allow us to test this. We will receive information
on this early next year and see what the evidence says.
Q7. Some schemes that receive Supporting
People funding are perceived by many as "unpopular"
with the general public, and at risk from local political decisions
7a. Has thought been
given to ring fencing funding for, for example, drug support work
to ensure that funding is maintained despite any local decisions?
We are not generally in favour of ring fencing
where this can be avoided as ring fencing specific groups would
cut across a principal objective of Supporting People to offer
seamless services to vulnerable individuals who may face multiple
problems.
At present, the main protection for unpopular
services lies with the Commissioning Bodies who are responsible
for the local Supporting People strategy. Commissioning Bodies
include representatives from Primary Care Trusts, Probation, Social
Services and Housing and oversee decisions on decommissioning
sensitive projects. We are currently working with the Home Office
to encourage the engagement of Drug Action Teams in Core Strategy
Groups which support Commissioning Bodies and this should further
help maintain and develop services for people who abuse drugs.
When I announced allocations earlier this month,
a letter was sent to each authority and Commissioning Body setting
out what we expect them to deliver with the SP funding. This makes
clear that, as a preventative programme, Supporting People contributes
to range of key government targets and objectives. Authorities
and Commissioning Bodies are expected to deliver on these objectives
and to fund services which support them.
Looking forward we are developing a key Performance
Indicator to look at access to services for all client groups.
This will allow us to track provision of services to all groups
and identify areas where provision is inadequate. Data to support
this indicator will be available from April 2005.
7b. We have heard arguments that cuts in Supporting
People funding may affect these "unpopular" schemes
disproportionately. What is your response?
There is currently no evidence to support this
view but I agree it is a matter we must track carefully. As indicated
above we are giving clear messages to authorities about what is
expected from the Supported People programme and developing a
much better picture of what is actually happening in the sector.
We will challenge any authority we consider is not addressing
the needs of all Supporting People client groups.
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