The Welsh Policy on Charging for Social Services

The initiative

The initiative of Fairer Charging for Home Care and other non-residential Social Services ("Fairer Charging") was issued by the Welsh Government in 2001, and issued to the public in July 2002. It provided guidelines to implement the 1983 Act, which gives authorities discretionary power to charge adult recipients of non-residential services. The guidance aimed to help councils, who decide how much to charge, to implement reasonable and fair charging policies and to ensure greater consistency between different councils' charging practices.

The Fairer Charging guidance implemented in 2002 mainly aimed to keep consistency on charges and take into consideration the financial impact on users. "While the majority of the Guidance is good practice guidance to local authorities who chose to charge for their nonresidential social care services, there are some elements which are subject to statutory guidance. These were essentially introduced to protect those service users on low incomes who are charged for the services they receive" [2]

Services covered by Fairer Charging are all non-residential services, which include: home care/support, day care, laundry services, provision of meals, and supporting people services.[3] A working group of council members, officers, service users and carers met at the time to discuss the guidelines, and provided a range of recommendations on the areas in which councils have discretion in the design of charging policies. The guidance provides advice for authorities about the requirements of the measure and the regulations. It also gives a framework to help authorities ensure that their charging policies are designed and operated in a fair, reasonable and consistent way.

The guidelines of fair charging have been reviewed several times. A revised version of Fairer Charging was issued in March 2007, then in the Social Care Charges (Wales) Measure 2010 , and subsequently the Social Services and Well-being (Wales) Act 2014 made further provisions around charging.[4] Currently, suggested charging levels for non-residential adult services are revised  annually by the Welsh Government for each authority and must be means-tested  for implementation.[5]

The challenge

Since the welfare state was established in Britain after the war, there has been a disparity between the National Health Service (NHS), which is mostly free, and social care services provided by local authorities, which can incur charges. Historically, health and social regulation in Wales allows for local authorities to charge for services on a discretionary basis. The Health and Social Services and Social Security Adjudications Act 1983 ("the 1983 Act") for England and Wales states that "an authority providing a service to which the section on 'Charges for local authority services' of the act applies may recover such charge (if any) for it as they consider reasonable. If a person who avails himself of such a service, and satisfies the authority providing it that his means are insufficient to pay for the service, the authority shall not require him to pay more for it than it appears to them that it is reasonably practicable for him to pay. Any charge under this section may, without prejudice to any other method of recovery, be recovered summarily as a civil debt.”[1]

The discretionary component of the charges allows for variations in the implementation of this policy, which have led to inconsistencies on its implementation. While charging for services is common practice of some local authority activities, many services have also been traditionally provided at little or no direct cost to the user. This allows for the provision of subsidised or 'free' services in some cases, which is not the expected practice, especially for authorities who already face funding constraints and could benefit from charging fairly to some users who can afford it.

The public impact

The Wales Audit Office published a report at the end of 2016 to review the implementation of the policy. Its results show limited impact and continued misalignment in the implementation:

• There is still little consistency across Welsh local authorities in deciding whether to charge and where to pitch the level of charging. "In 15 of the 18 service areas we have analysed, there has been a net cost improvement, income as a proportion of expenditure is growing, and services require fewer subsidies to operate. Despite this improving position, there are opportunities for authorities to increase how much income they raise from charges."[6]
• Responses to a survey of local authority chief finance officers found that only half of participants stated that their authority "had taken adequate legal advice on the opportunities that exist to optimise income from charges including pursuing commercial activity".[7]

Stakeholder engagement

The various stakeholders involved in the formulation of policy included the Welsh Government, the Ministry of Social Services, and the local councils/authorities providing social services. A number of organisations and local authorities were consulted on this guidance through various meetings between 2001 and 2002. Before it was issued to the public, recommendations received were included in development of implementation plan.[8] "Given the level of detail that these regulations have of necessity needed to cover, their development has required extensive and prolonged engagement with stakeholders, both those representing local authorities and those representing service users. (...) This process has, therefore, been highly technical, involving charging, financial and complaint officers from local government, as well as a range of individuals from the organisations representing older and disabled people."[9]

Through the years, several consultations have continued to be launched by the Welsh Government on the policy regarding Fairer Charging for social care to integrate modifications. Consultations gather feedback from stakeholders with interest in the effective functioning of the guidelines, including local authorities and civil society organisations operating in healthcare, disabilities and similar issues. An additional consultation has just been implemented with changes planned to take effect from 10 April 2017.[10]

Political commitment

The implementation of consistent guidelines across councils on charging for services is an important priority for the Ministry at national level. Government was committed towards the formulation of this policy at its inception, and continues to be engaged in its implementation.  In November 2013, the deputy minister for social services wrote to the Welsh Assembly's Health and Social Care Committee regarding plans on paying for care. In the letter, the deputy minister "confirmed her intention to establish a reformed system of paying for care in Wales" and "has commissioned research on the Welsh context including data on current charging, present and future population composition, and trends in income and capital".[11]

However, commitment and support at the local level has proved to be weak, and local authorities have challenged the guidelines:

• “The majority of respondents [to the survey of local authority chief finance officers conducted by the auditor general] stated that they experienced considerable difficulties where the level of charges are set by the Welsh Government or the UK Government. Many respondents felt that charges are set too low and either did not reflect local circumstance, the complexities and costs of the service, [or] did not allow for full cost recovery.”[12]
•  “Survey respondents noted that national set fees do not always cover the cost of the service provided. The income quantum can vary significantly between authorities, and the funding formula should take both the cost and income capacity into account.”[13]
• “Others noted that the fee set also did not allow for equitable contributions from service users, either reflecting the ‘amount' of the service they use or their ability to pay (particularly relevant to the cap on care charges).”[14]

Public confidence

A stakeholder group was formed in 2008 to discuss their views on charging for non-residential social care services in Wales. It was formed by a mixture of service users, carers and care workers (many were older people and younger adults with physical impairments and/or learning difficulties). A report for the stakeholder task & finish group was prepared by LE Wales (an economics and policy consultancy based in Wales) under a Welsh Government contract. The views expressed varied significantly.  Most participants in the group considered that it was fair to pay towards non-residential social care services and that the financial ability of users should be take into account. On the other hand, others felt very strongly that these services should be free for users. The arguments made included the following:

• "Older people and others had already paid for this right through previous tax and national insurance contributions. So these services were expected to be paid for from the National Insurance Fund;
• "Charges could put those who are less well-off in great difficulty, and deter some from taking up necessary services. This can put additional strain on carers as well as service users. Reference was made to a day centre in Bridgend losing 10-12 clients following the introduction of attendance charges;
• "It is not fair to put additional pressure on those in the middle of the income/wealth range, who are normally older people, i.e., in between those who received free care because of low savings levels and those who received free care because earnings are not taken into account in the means test."[15]

Clarity of objectives

The high-level objectives of the policy have been clear since its launch in 2002. Even after amendments in 2007 and 2011, the objectives remained the same, with some modifications introduced in the guidelines. However, measurable outcomes and delivery timelines were not included in the stated objectives.

The two targets were:

1. To ensure consistency between the charges set by various local authorities across the country
2. To ensure that authorities took account of the full impact of all their charging decisions on individuals, and the effect on their net income.[16]

The statutory guidance was modified in 2007 to include the following:

• "To ensure that service users' net incomes are not reduced after charging below the basic level of Income Support, or below the appropriate guarantee credit level, plus a 'buffer' of no less than 35% of this. This buffer was increased from an original 25% level set in 2002 to 35% from 2007(...)
• "To disregard from the charge assessment any savings credit payments received under the Pension Credit arrangements. This was introduced in 2002;
• "To disregard all earnings as part of income in charge assessments. This was introduced in 2002;
• "To ensure that savings and capital limits, where local authorities take these into account, are at least as generous as those set out in the Charging for Residential Accommodation Guide. This was introduced in 2002.".[17]

Strength of evidence

There was not a previous case from which evidence was drawn in the implementation of these guidelines. However, there have been several attempts for consultations to learn from experience among stakeholders before and after the launch of the policy. There was also the opportunity to collect comparative data and financial assessments of the public before launch, which provided additional substance in the decision-making process. "The extra time available to work on a fairer charging policy has provided the opportunity to collect additional data to inform it, e.g., about the approaches of other local authorities in Wales."[18] Similarly, "live" information was collected on the means of the users of the service, and these were used to develop the policy alternatives. These financial assessments allowed the authorities to get the policies "ready" to be introduced after approval.

Feasibility

The Local Authority Social Services Act 1970 makes provisions for the organisation, management and administration of local authority social services, and Section 7 gives authorities discretionary power to charge adult recipients of non-residential services.[19] The Fairer Charging guidelines published in 2002 provided advice and best practices to local authority on the implementation of this Act. However, although some guidelines established clear restrictions, they still provided significant flexibility on implementation, which, coupled with weak management, impairs the viability of the initiative.

Most authorities use several methods to include residents in the evaluation of charges on the annual budget-setting processes. However, very few consult with key stakeholders - service users, businesses and the general public - when they are planning to introduce or increase charges. Even when it takes place, only 15 of the 22 authorities stated that they consider and include responses in the decision-making process for reviewing and setting charges.[20]

Regarding the financial impact of the policy, there were no comprehensive measures to evaluate or plan for possible costs of implementation at the beginning, and further analysis was to be integrated through consultations later on. As an example, the Welsh city of Newport made the following assessment in 2003: "Under the guidance of the Welsh Assembly Government, the council has little opinion but to implement the Fairer Charging policy. It will undoubtedly have an effect on the level of income currently received from charges and may well involve the council in additional administration costs. The effect of these will not be known until the completion of the exercise to re-assess all of our service users. The budget will then need to be amended to reflect these changes in income/expenditure."[21]

After several revisions, the Welsh Government introduced its "Social Services and Well-being (Wales) Bill in January 2013, following a consultation exercise in March 2012.(...) Part 5 of the Act makes provision for charging for social care services and the financial assessment of service users and provides Welsh Ministers with powers to put in place arrangements for the contribution of individuals to the cost of their care." The Bill passed into legislation in the following year as the Social Services and Well-being (Wales) Act 2014.[22]

Additionally, there is still some dependence on England in the modifications and improvements that are made to the guidelines, which can restrain action. The Welsh Government has undertaken work to address the issues around paying for care; however, reform in Wales still depends in part on the direction of policy in England, particularly that regarding welfare benefits.[23]

Management

Responsibility for welfare benefits and the care landscape remains with the UK government, and individual local authorities are tasked with implementing them. According to a follow-up survey conducted by the Welsh Audit Office, most local authorities do not consistently measure and monitor the key metrics for the programme and have no clear methodology in place. Therefore, management can be labelled as one of the main causes of the poor performance of the policy.

The latest audit report found that authorities have no clear measurement policy or strategy regarding charging, and so there is no methodology to track objectives. "Authorities use a number of approaches when setting charges, but these are mostly not underpinned by a clear set of strategic principles that cover the full range of issues to be considered. For example, our review of documents provided by authorities found that only half of the 22 authorities have a corporate authority-wide policy in place for setting charges."[24]

The audit report concluded: "Management information is inconsistent and many services are often unable to provide accurate and up-to-date information on the true costs of provision. We found that authorities have well-established systems for reviewing and monitoring service budget performance but are only now beginning to focus on analysing the full cost of services. From our fieldwork we found that authorities do not always calculate unit costs nor consider how much it costs to collect charges. (...) We also found the range and quality of measures used by authorities to judge performance on collecting charges to be variable.(...). These weaknesses make it difficult for authorities to effectively evaluate performance in-year and address the impact of cost pressures, low or higher usage, or reductions in income."[25]

Measurement

The government carried out public consultation before making amendments to the guidelines in 2007 and the results were considered during the formulation of guidelines. However, no monitoring mechanism was developed consistently by local authorities to measure the income generated from charges or to benchmark the charges generated from various services.

Impact assessments are used by authorities to judge the potential effect of decisions; however, they do not always provide enough detail to identify the cumulative economic impact of charges on residents and communities. The audit study "found little evidence that authorities coordinate increases in charges across all services to better understand the full potential impact of their decisions”.[26]

Few authorities monitor the income from charges in sufficient detail or breadth. "The range of services benchmarked is narrow, and few authorities are broadening their evaluation to consider a wider range of data, even where data is readily available:

• "Only 10 authorities (out of 22 in survey) compare and benchmark how much income they are generating with an appropriate range of performance measures and compare their performance with a range of public and private sector bodies
• "Only five authorities (out of 22 in survey) forecast the likely levels of income generated from charges beyond a 12 month period (...); authorities are not using scenario planning and sensitivity analysis to more accurately identify the potential effect of their decisions to better understand and manage the impact of charging policies.”[27]

Alignment

Although policymakers, including all stakeholders, organised meetings in order to frame the final policy, the guidelines they established were not well enough structured for a clear, coordinated implementation by local authorities - to introduce charge rates or to monitor their income.

The audit showed that the execution was not consistent across the board. "Authorities generally have a good awareness of the legal restrictions that exist for many areas of operation, but few authorities have robust corporate-wide framework or strategies that set out the full range of issues they need to consider when increasing or introducing charges. Just over a third of authorities have a corporate policy or strategy for setting charges covering all services. The remainder have a range of charging policies for individual services, but because of gaps and weaknesses these do not represent an authority-wide strategic approach to charging.”[28]

“Respondents to the survey noted that national restrictions on their ability to charge inhibit them from taking decisions that reflect local circumstances, and some respondents who commented wanted the freedom to set their own charges for services that are currently controlled by government.”[29]

Bibliography

A Study into Local Authority Charging for Non-Residential Social Care Services, December 2088, LE Wales

Charging for services and generating income by local authorities: , 10 November 2016, Auditor General for Wales

Charging Policy (Social Services): Paying for Social Services under the Social Services and Well-being (Wales) Act 2014, April 2016, The Council of the City and County of Swansea

Consultation Outcome: Charging for social care, Welsh Government

Explanatory Memorandum to Social Care Charges, Gwenda Thomas AM, 24 March 2011, National Assembly for Wales

Fairer Charging Policy for Home Care and Other Non-Residential Social Services, Ellis Williams, 14 October 2003, Newport City Council

Fairer Charging for Home Care and Other Non-Residential Social Services: Report of Director Of Social Care and Housing, 16 June 2003, Carmarthenshire Council

Health And Social Services And Social Security Adjudications Act 1983, Legislation.gov.uk

Introducing More Consistency in Local Authorities' Charging for Non-Residential Social Services, April 2011, Welsh Government

Local Authority Social Services Act 1970, Legislation.gov.uk

National Assembly for Wales Research paper Paying for Social Care, May 2014, National Assembly for Wales

Proposed Social Care Charges (Wales) Measure Stage 1 Committee Report, November 2009, National Assembly for Wales