Reference Documents

Best Value Accounting Code of Practice

Government spending plans for Social Services

Local authority spending above SSA for Social Services

Specific grants

'Fairer Charging for non-residential social care services' - Summary

'The Price is Right' - Audit Commission briefing on charges for local government services - September 1999 - Summary

'Charging for Residential Accommodation Guide' (CRAG)

Department of Health - 'Performance Assessment Framework' (PAF) indicators

'Unit Costs - not exactly child's play' - A guide to estimating unit costs for children's social care produced by the Department of Health as part of the 'Quality Protects' initiative, in association with the Personal Social Services Research Unit of the University of Kent and the Dartington Social Research Unit, 2000

Best Value Accounting Code of Practice

• The Best Value Accounting Code of Practice (BVACOP) published by the Chartered Institute of Public Finance and Accountancy in 2002 provides guidance for accounting for social services and defining the cost data for performance indicators.
• Section 2 of BVACOP makes it clear that cost-based performance indicators should be expressed or aggregated on the basis of the definition of total cost expressed in gross or net terms depending on the requirements of each performance indicator.
• Section 2 of BVACOP defines total cost as including all relevant attributable cost of a service, including support service costs, overheads and capital charges (and the cost of any impairment loss and the amortisation of deferred charges).

''Total cost exists in both gross and net terms. No categories of income are considered to be abatements of expenditure, ie you cannot deduct any income from the expenditure figures used in calculating costs, and movements to and from reserves must be excluded from total cost definitions. Gross total cost includes all expenditure attributable to the service/activity, including employee costs, expenditure relating to premises and transport, supplies and services, third-party payments, transfer payments, support services and capital charges. Total cost also includes an appropriate share of all support services and other overheads.'' BVACOP 2002

• Overheads should be charged, allocated or apportioned across users and other beneficiaries in accordance with the seven general principles in Table 1.

Government spending plans for Social Services

• An extra £947 million in 2003/4
• on a like-for-like basis
• before additional resources for delayed discharges are added
• PSS resources for local government are increasing in real terms by 6.3/4.5/6.3 per cent over the next three years, an average annual increase of 5.7 per cent in real terms
• on a like-for-like basis
• excluding resource equalisation
• before the additional resources for delayed discharges are added

This increases to an annual average of 6 per cent when you add the additional resources for delayed discharges.

Personal Social Services Total Formula Spending Share (formerly known as the Standard Spending Assessment)

PSS Total Formula Spending Share (formerly total SSA) is increasing by £590 million next year, 6.2 per cent cash on a like-with-like basis, ie after taking account of the fact that the Promoting Independence grant, the Residential Allowance grant and the Building Care Capacity grant have been rolled into Formula Spending and the NHS will be responsible for providing nursing care in nursing homes excluding resource equalisation. The change in arrangements for the allocation of revenue support grants to local authorities by Government from 2003/4 from Standard Spending Assessment (SSA) to Formula Spending Share (FSS) has created significant shifts of resources for many authorities with some being major losers of funding and others securing significant increases. There is no information about how the full amounts will be made available in future years or how the maximum and minimum levels will be determined. This requires authorities to consider the national allocation levels, their specific allocations for 2003/4 and whether they have been affected by the application of maximum and minimum levels to come to a view about the likely contributions from FSS in future years.

Floors and ceilings: The decision to soften the impact of the change, by ensuring a minimum funding increase of 4 per cent for those losing revenues in 2003/4 ('floors') and introducing a maximum funding increase of 8 per cent ('ceilings') for those who gain from the change, has eased the financial planning problem for authorities in the short term but has created uncertainties in medium-term planning. This is due to the lack of clarity about the application of 'floors' and 'ceilings' in future years, which affects how quickly individual authorities are going to benefit from the increases or suffer decreases in their FSS allocations.

Examples of Authorities that have gained and lost from the change in Government allocation formula from SSA to FSS for Social Services:

• An extra £15 million for Carers, with the grant more than doubling by 2005/6.
• In England the Children's Services grant increasing by £106 million in 2004/5, a 23% increase. This includes £20 million for Choice Protects and £12 million for adoption. In Wales the Children First Grant increases by £5.9 million 2004/5, a 19% increase which includes £1 million for improving placement choice and stability
• A new grant of £170 million for Access and Systems Capacity, which will increase to £542 million by 2005/6.
• £31 million extra for Child and Adolescent Mental Health Services, more than doubling the existing level of funding.
• Substantial additional funds for training including two new grants.

Local Authorities spend above SSA for Social Services

Specific grants

New grants:

• Access and Systems Capacity £ million 170/386/542
• National Training Strategy £ million 25/31/95
• Human Resources Development Strategy £ million 10/24/63

Change of category:

• Preserved Rights grant switches from ringfenced to specific formula grant

Grants which roll into Total Formula Spending:

• Promoting Independence from 2003/4
• Residential Allowance from 2003/4
• Building Care Capacity from 2003/4
• Main Children's Services Grant from 2004/5
• Training Support Programme from 2005/6

Grants which are withdrawn:

• Deferred Payments from 2004/5
• Performance Fund from 2004/5.

PSS Revenue Grant Programme

'Fairer Charging for non-residential social care services' - Summary

The action needed to undertake option appraisal:

Before:

• Identify the resources (human and financial) needed to undertake the option appraisal
• Establish the political will for the approach
• Set the strategic context
• Define the problems needing to be addressed and ensure that options are not foreclosed prematurely by scoping too narrowly
• Define the objectives to be achieved and the desired outcomes
• Identify evaluation criteria and any relevant constraints, which should include any financial considerations
• Set timescales

During:

• Consider all the options against the criteria to produce a limited number of options for more detailed appraisal
• Encourage thinking 'outside the box' to explore all possible alternatives
• Assess and compare the impact of pursuing each of these options in terms of costs, benefits and risks using all the evidence available - including both short- and long-term costs and benefits together with any financial risks.
• Undertake consultation with all stakeholders (especially users and carers) to identify the implications of each option for each stakeholder interest

After:

• Select the preferred option and build the financial consequences into longer-term financial plans and commissioning intentions
• Ensure feedback is given to all contributors
• Evaluate process and test validity of outcomes

Deferred payments- read more