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Your questions answered on indicative budgets and the RAS

Posted on 5/08/2016 by


Legal trainer Belinda Schwehr unpicks some of the knottiest issues facing practitioners in relation to indicative personal budgets

By Belinda Schwehr

These questions have been raised with Belinda through her legal training sessions and webinars.

A Care Act requirement? 

Is it right to say that indicative budgets are required by the Care Act 2014?

No, indicative budgets and resource allocation systems (RAS) aren’t actually mentioned in the Care Act itself. They aren’t mentioned in the regulations under the Act.

Section 26 of the Act defines a finalised, not an indicative, budget (“the cost to the local authority of meeting those of the adult’s needs which it is required or decides to meet”), and not even that definition mentions reasonable sufficiency – the idea that the personal budget amount must be sufficient to meet the person’s needs and take account of their reasonable preferences. All that extra crucial material in the statutory guidance comes from existing public law principles.

The guidance states that an indicative amount should be shared with the person at the start of the care planning process (paragraph 11.7) but there is no ‘must’, even in the guidance. There is case law, from a point before the date the Care Act came into force, about what any system for identifying an indicative amount has to do, so that it does not become something positively unlawful – ie something that messes with the structural design in the Care Act of who decides what; or which breaches pre-existing public law principles about rationality, legality and fairness.

The guidance says that the process used to establish the personal budget must betransparent, completed in a timely manner and proportionate to the needs to be met, and that the method used must be robust (paragraph 11.4). It adds that “it must also be possible for the person, carer or independent advocate (on the person’s behalf) to challenge the local authority on the sufficiency of the final amount” (paragraph 11.24).

These principles come from the pre-Care Act cases of Savva, R (on the application of) v Royal Borough of Kensington and Chelsea [2010] and R (KM) (by JM) v Cambridgeshire County Council [2012], and apply at both stages, regarding indicative and signed-off budgets.

What is the ‘cost to the local authority’?

What does it mean to say that a personal budget is ‘the cost to the local authority’ of meeting the person’s needs when most councils are only commissioning from others, now, and not actually having to pay the national minimum wage for any time now counted as ‘work’ – let alone having to employ a person or engage a company, as a lone purchaser, instead of buying in bulk?

It means the purchase cost to the council, not the cost of the inputs from the provider’s perspective.

This means that if the council can force providers to take smaller margins, then that will determine the personal budget. And vice versa – unsurprisingly, providers have just started saying no to council terms (for example, in Wirral) for the reason that their provision capability won’t be sustainable, because providers are bound by the TUPE regulations, which preserve workers’ terms and conditions when transferred to a new employer, and by the national minimum wage and working time regulations.

Also, a care provider’s services are now of interest to any local authority because of the ordinary residence rules under section 39 of the Act. These mean that a person coming from further afield into a complex personal care package in supported living remains ordinarily resident in their placing local authority’s area. This means commissioners are less able to bully the price down locally.

Direct payments won’t be as attractive to people who are well-informed, if they know them to be insufficient for purchasing even ordinary standards of service. The fall-back market failure duty under section 48 of the Care Act is there too, requiring councils, when a local provider fails, to meet the needs the provider was meeting, regardless of the ordinary residence or eligibility of the service users concerned.

Councils should be factoring that in before saying “it’s you who’ll have to take the risk of costs going up, not us” to providers.

How much is sufficient?

How much of any sort of funded response is enough to constitute a proper discharge of the duty to meet eligible assessed needs, in legal terms?

The response has to be fairly arrived at, and not be so unreasonable that no other council would have made the offer. It must have taken account of all relevant considerations and not just one – money – and be compliant with human rights, and be legally within the governing statutory framework.

When personal budgets were first piloted (they were called individual budgets at that stage), one or two councils simply refused to start care planning with an identified sum of money, and focused instead on resourcing individuated person-centred care planning, with no notion of cost as an overt driver.

Significant numbers of people assessed that way did not assert a need for as large an amount of care as a pre-scored resource allocation system would have given them – which left more money for others, as it happened. But was that fair, equitable, consistent or even workable, in line with current levels of workforce skills, aptitudes, or capacity? Is it likely to be non-discriminatory?

All those values are part of social work professionalism, and training, too, and providing training is an implicit managerial imperative in local government. Without a view as to how much of anything is enough to achieve whatever it is that the law requires, how would a council ever hold social workers and unqualified ‘competency-based’ care planning staff to any kind of standard?

There is a bottom legal line to this question, but it is dependent on case law, and harder to pinpoint under the Care Act than it was before, when we had FACS guidance as to a locally applicable threshold. The response to need must be sufficient to stop the person’s inability to achieve specified outcomes (as set out in the eligibility regulations) from significantly impacting on their wellbeing.

It is not likely to be legally necessary to make someone able to achieve the very thing that they could not achieve without assistance, or without pain, distress or anxiety or endangerment or delay. In some cases it will be literally impossible to enable that achievement. But it should always be possible to provide enough help or access to facilities to reduce the impact on the person’s wellbeing to what is regarded as objectively tolerable level.

The legality of panels

Are panels a lawful way of moderating an indicative budget?

Yes – and in fact a panel is the answer to my own question in the previous answer – but only if a panel is well-informed about legal risk and its own role! A panel creates a further step/delay/drain on resources, however, and in the past in some places, panels have comprised finance officers and interim consultants from business backgrounds who may know little about risk assessment or mental capacity or where a duty of care, or duty to meet need, can lawfully be said to stop.

The Care Act allows local authorities to make up their own decision-making hierarchies and they can delegate decisions about who is eligible and how much a person gets, to anyone they believe to be competent to discharge the statutory function. This includes health colleagues under the NHS partnership arrangements, but not only health, now. Delegates can be completely independent companies, in fact, but only if councils trust them and train them and keep in touch with them, since they remain liable in public law for the decisions of these other organisations’!

I believe that panels need to ask staff to come with more than one option considered to meet needs, and with the client and any consultees’ views about the pros and cons of each, so that the panel can do what the statute requires: which is to decide, lawfully, which to offer.

If panels make the legal final decision on behalf of the council, it is those panels who need to know the law about the relevance of financial resources, and about risk or best interests. They need to know the law about when it is legal to say no, on account of cost, and when it is not legal. And they are the ones who need to know how the RAS works, and whether their local RAS is tending to produce defensible sums in the first place, and in what percentage of cases.

The question of what is objectively tolerable and thus rationally sufficiently funded is a question of professional consensus, but always subject to the courts judicially reviewing the stance being taken (ie importing the standards of ‘a civilised society’). It’s public law judges who make up those standards, together with social work input by way of evidence.

If the user can be moved to say ‘I’m feeling a bit better about it all, now’, after services have been used, then that’s maybe good enough, because the impact on their wellbeing is no longer so significant. We just have to be legally literate about the meaning of ‘significant’, which means doing a strange mixture of subjectively-led, but objectively-evaluated weighing up of the relative effect of inabilities in the domains of daily living in the criteria, on individuals within the client’s comparators.

The guidance is not much help. It says, at paragraph 6.106, that in determining eligibility local authorities should consider whether:

  • the adult’s needs impact on an area of wellbeing in a significant way; or,
  • the cumulative effect of the impact on a number of the areas of wellbeing means that they have a significant impact on the adult’s overall wellbeing.

The  areas of wellbeing are set out in section 1(2) of the Act. And we are warned, at paragraph 6.112: “When considering the type of needs an adult may have, the local authority should note that there is no hierarchy of needs or of areas of wellbeing…” This is why we really need staff who are mature and confident enough to say ‘in my experience, someone presenting in thisstate is experiencing significant impact, but someone presenting like that, is not’. That’s a hard ask, without guidance from one’s own seniors on the panel, in the shape of reasons for decisions, that would build up over time, I feel.

Transparency over evidence

How would a client push the panel to share its evidence basis when it looks like saying it thinks that £x will be enough?

Faced with the council’s position that the client ‘should’ be able to make do with £x, the client, or any appropriate person or independent advocate supporting their involvement, should ask the following questions, as appropriate:

  • Why do you think that that’s enough to be adequate and appropriate, please?
  • Given the unit cost of that sort of a service, how is it that you have concluded that the money you’ve offered me would enable you (or me) to buy sufficient services for my particular needs, given my needs are specialist or high cost because of [fill in the blanks]?
  • Who do you envisage that I could get that service from, please?
  • Shall we ask that provider if they’ve even got a vacancy or capacity to take me on?

The danger of blanking the client is that some would then just say this: “I don’t think that I fancya direct payment at all, thanks. I’d rather you commission an appropriate service for me, and invoice me for my contribution, but I would still like it personalised as to the timing and manner of its provision, like the government guidance always said it should be.”

Common RAS failings

What are the most common failings in a RAS, in your experience?

The most common failings I have come across are:

  • Obsessing about all client groups having the same number of pounds per point in the RAS, for fear of a discrimination claim.
  • Conversely, clearly treating younger people as entitled to more fun, or to care at night, than the RAS table allows, even in principle, for older people, who are just as mobile and who may value their independence just as much.
  • Not adding inflation-related increases.
  • Cutting the budget before the market has been consulted, or has discounted its prices – and discounted them in solidarity with the statutory sector, not compulsion.
  • Applying automatic deflators for people living with others, without asking whether informal support is forthcoming and capable.
  • Applying automatic deflators for day-time stimulation and supervision of people living in a group, even though they are in independent living and not obliged to pool their budgets.
  • Tweaking the costs figures in the RAS without consulting the public on what is, effectively, a change in policy as to how much care, support, stimulation, challenge or fun, is actually enough to discharge the duty in the Care Act. This could be a breach of the public sector equality duty in the Equality Act 2010, given disability is a protected characteristic under that Act. The duty requires public bodies to have due regard to the need to promote equality of opportunity between people with a protected characteristic and those without.

Questions to ask about the RAS

What sort of questions should people ask about the resource allocation system, if they want to know more about the basis of their local council’s indicative budgets?

I would ask the following:

  • For how many escorted leisure activities per week do you provide funding, for this client group?
  • How much do you allocate for work/training or education in the RAS?
  • Do you allocate for shopping and if not, why not, please?
  • Do you allocate for management of finances even though it isn’t an outcome? Is this the cost of the work?
  • Are you still allocating 15 minutes for visiting or snack preparation?
  • Are you allocating for administering medication? If not, that’s presumably because Health is doing it?
  • Are you deducting for number-sharing for night support in 24-hour supported living in a standardised or non-bespoke way?
  • How much on average do you add to the package for respite?
  • Have you adjusted for the national minimum wage increases?
  • Even though it’s not an eligibility domain, how much are you adding for the management of a person’s risks and safety, if they are lacking in insights, and the carer is uncomfortable about leaving the person on their own?
  • What process have you got for comparing your expected level of spend on a person of a given profile, with incoming information that it is either actually costing less or more, in reality?