2.Memorandum from the Department of Health
I am replying to your letter of 28 February
addressed to Alan Milburn in which you sought information about
the role of the private sector in the provision of social care
services. I will address the issues you raise in the order in
your letter.
The extent of the role of private and voluntary
sector organisations
The majority of social care services for adults
arranged by local authorities are now provided by the private
and independent sectors. For example, an estimated 64 per cent
of contact hours of home care in September 2002 and 92 per cent
of residential care homes in March 2001 (excluding nursing homes)
were provided by the private and voluntary sectors. Local authorities
continue to discharge the function of assessing the need individuals
have for services, and for making the arrangements in pursuance
of the exercise of their social services functions.
For children's services the position is quite
complex. Voluntary organisations provide a range of services for
children at a local level. For example 15 per cent of children
in foster placements (excluding those with relatives or friends)
are in placements arranged by an independent agency, with the
remaining 85 per cent in placements provided by the Council. This
is an average; there will be wide variations by area. Voluntary
Adoption Agencies (VAAs) also make a significant contribution
to the adoption service, playing an important supporting role
alongside local authorities in assessing prospective adopters.
Statistics prepared by the Consortium of VAAs
show that, in 2001-2, 604 children were placed for adoption with
adopters approved by their member agencies. This accounts for
around 20 per cent of looked after children likely to have been
placed for adoption during the year.
In several places social services legislation
clearly anticipates the buying in of services by a local authority.
Part 3 of the National Assistance Act 1948 accommodation (see
section 26 of the 1948 Act) is the obvious example for adults.
But also section 29 of the 1948 Act, section 45 of the Health
Services and Public Health Act 1968, and Schedule 8 to the National
Health Service Act 1977, refer to local authorities "making
arrangements" as respects certain matters.
In the case of children, section 17 of the Children
Act 1989 provides that local authorities may make arrangements
with others to provide services on their behalf. Similarly, for
example, local authorities may place children in children's homes
run by voluntary organisations or private bodies.
Poplar Housing and Leonard Cheshire cases
You say that the key criterion from these cases
for determining whether an organisation has public authority status
is whether the organisation was sufficiently institutionally enmeshed
with the public authority. The question as to whether an organisation
is or is not a public authority for the purposes of the Human
Rights Act is a matter for the Courts. However, in my view, because
social care services provided by private and voluntary sector
organisations are provided on behalf of a local authority (rather
than delegated to private or voluntary organisations), this criterion
does not arise in relation to social care services arranged by
local authorities.
Where an organisation enters into a contract
to provide services on behalf of a local authority pursuant to
a local authority's exercise of social services functions, it
seems to me that the private organisation is not standing in the
shoes of the local authority. Further, it has not had delegated
to it any local authority functions. The local authority retains
those functions but is exercising its functions by making arrangements
with others pursuant to its statutory powers and duties. None
of the social services legislation gives such private providers
any powers.
Where a private organisation is contracted to
provide services to a local authority (albeit regulated) there
is no reason to adopt institutional arrangements that give the
local authority a role in the running of the organisation. None
of the social services legislation envisages that. It is important
to emphasise that such organisations will generally be providing
services on behalf of a local authority and to people who arrange
their own care.
You also ask about standard contractual terms
or institutional arrangements. The Department of Health has not
provided guidance on standard contractual terms in areas which
might be affected by case law on section 6(3)(b). We would expect
local authorities to have proper regard to the Human Rights Act
including in cases where they enter into arrangements with others
for the provision of services. In any cases of difficulty, local
authorities can call upon their own legal advisers.
Maintaining the level of Human Rights Protection
Where a person may need social services he will
be entitled to be assessed by the local authority as respects
his needs. The local authority must then go on to decide whether
it will provide services for him. If the authority decides to
provide services and it goes on to arrange those services through
a private provider, the local authority nonetheless retains a
role. It remains responsible for ensuring that the person is receiving
the services he needs. It will remain responsible for ensuring
that the private provider is providing the services contracted
for. As the Leonard Cheshire case made clear, in exercising its
duties in respect of a person, the local authority remains accountable
under the Human Rights Act 1998.
Maintaining the protection under the HRA for users
of public services
You ask whether the Department is satisfied
that the existing legislative structure is sufficient to ensure
adequate protection of Convention rights given the role of private
and voluntary sectors and the current definition of public authority
under the 1998 Act. The Court of Appeal decided that Leonard Cheshire's
activities do not attract the attention given by the 1998 Act.
Rather, it is in the citizen's interaction with public authorities
where that protection is provided. The local authority does not
"delegate" its functions. It exercises its functions
by entering into contracts for the provision of services. It remains
accountable for those functions. It continues to be responsible
for providing the services needed by the person and for reviewing
his needs. Therefore we believe that people's rights are adequately
protected by the existing legislative structure.
NHS Foundation Trusts
While this is not specifically raised in your
letter, you may also be interested in the status of NHS Foundation
Trusts. Subject to legislation, I can confirm that NHS Foundation
Trusts would be treated as public authorities under the Human
Rights Act.
NHS Foundation Trusts will remain part of the
NHS as public benefit corporations, with a primary purpose of
providing NHS services to NHS patients free at the point of use.
NHS Foundation Trusts will negotiate legally binding contracts
to provide clinical services to NHS patients on behalf of Primary
Care Trusts. They will be required to operate in a manner consistent
with the "Terms of Authorisation" under a licence issued
by an Independent Regulator. The Independent Regulator will be
appointed by the Secretary of State for Health and be accountable
to Parliament. Statutory powers will be delivered through the
Health and Social Care (Community Health and Standards) Bill published
on 13 March.
I understand that you have written in similar
terms to John Prescott, so I am therefore copying this letter
to him, and to Derry Irvine who has lead responsibility for human
rights.
1 May 2003
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