How outcry led to the ‘death’ of care e-auctions in Scotland: Part 2
by Paul Roberts
Caring For Your Business and Joint Editor of the Journal of Care Services Management
This article is published in the latest edition of the Journal of Care Services Management. For details on how to subscribe to the the Journal, contact the publishers on www.henrystewart.com
Part 2
EVIDENCE FROM LOCAL AUTHORITY OFFICERS
Senior local authority officers also gave evidence to the committee about e-auctions.15 Asked whether they were an appropriate method of procuring care services, Jim Wilson, head of Older People’s Services for South Lanarkshire Council, said that when South Lanarkshire conducted its e-auction, that was ‘consistent with what the regulations and the guidance were deemed to be at the time, but it was not consistent with what subsequent guidance suggested.
‘When we examine the situation at the end of our existing tender, as we will have to do, we will take note of the guidance at that point in time and of a range of other factors, such as best practice, lessons that we have learned from the present tender and the outcome of the committee’s inquiry’.
Tricia Campbell, the joint programme manager for older people at the City of Edinburgh Council, said the authority had participated in an e-auction a couple of years ago as part of a much wider tendering process, 70 per cent of which was about quality and 30 per cent of which was about cost. ‘Now that we have taken account of the new procurement guidance and the Social Work Inspection Agency report16 that we received last year, the City of Edinburgh Council will not use e-auction again as part of the tender process.’
Mr Wilson said it was ‘unlikely’ that South Lanarkshire would use the process again. Nick Kempe, head of strategic management for older people and physical disability for Glasgow City Council, said the authority had never used e-auctions and ‘we would not use them’. In response, the convenor said: ‘It looks like the death of e-auctions for social care has been announced here this morning. We are all relieved about that’.
E-AUCTION EXPLAINED
Responding to questions about the reasoning behind the decision to go for an e-auction, Mr Wilson said his authority had been ‘keen to reduce the number of companies (providers) and to introduce stability to the market. Our priority was quality, which was why in the exercise we gave a greater weighting to quality than to price. However, we were conscious of the need to deliver best value. Some things have changed as a result of the tender exercise. Previously, we were often charged more than half the hourly rate for half an hour of care, but in the tender exercise, we asked for the half-hourly rate to be half the hourly rate. Therefore, with the same money, additional hours have been provided for service users in South Lanarkshire—we now deliver an additional 2,000 hours of care. That was important for us.’
Price was a component, but quality was more important, he said. ‘Service users were concerned about high turnover. Most of us, or our parents, would want the same carer, or the same small corps of carers, coming to our home; we would not want constant change. Before the tendering exercise, there was a high turnover, but we now have a reduced number of companies.’
He told the committee that the hourly rates South Lanarkshire ended up with after the bidding process ranged from £9.85 to £11.90. He believed they were consistent with ‘ballpark rates’ that were being paid across authorities. ‘The range seemed reasonable to us’.
Mr Allan retorted: ‘Those of us outside the process are curious to know how, when the minimum wage is £5.70 an hour, you can get any service for £9 or £10 an hour. The rates may be consistent across the country, but how on earth can any service for anything be provided at that price? Over and above paying the minimum wage, how can overheads, management and training all be covered for £4? How is that possible?’
Mr Wilson said home care was very much a volume business. ‘Obviously, companies with larger volumes of business spread their overheads. By moving from having 27 providers to having only six, we were looking to stabilise the market and give a smaller number of companies longer-term security of employment and, therefore, greater stability for their staff.’
References
1. Sixty-minute news documentary focusing on the state of homecare in England and Scotland. Shown on BBC 1 on 9th April, 2009. Programme can still be viewed on www.bbc.co.uk/programmes
2. The committee’s remit is to consider and report on (a) the financing and delivery of local government and local services and planning; and (b) housing, regeneration, anti-poverty measures and other matters falling within the responsibility of the Minister for Housing and Communities. www.scottish.parliament.uk/S3/committees
3. McNeil, Duncan, Convenor Local Government and Communities Committee, Official Report 3rd June, 2009, home care services for the elderly evidence (col. 2096).
4. BBC Panorama, Britain’s Homecare Scandal, online auctions, news.bbc.co.uk/panorama/hi/front_page
5. Ibid
6. According to its website, the IDeA ‘works for local government improvement so councils can serve people and places better. It is owned by the Local Government Association and belongs to local government. www.idea.gov.uk
7. From IDeA website www.idea.gov.uk/idk/core/page.do?pageId=939784
8. Member of Scottish Labour Party www.scottish.parliament.uk/msp/memberspages/andy_kerr/index.htm
9. The association of voluntary sector organisations providing care and support services in Scottish communities. Its membership comprises the majority of the leading national non-profit and charitable service providers in Scotland. www.ccpscotland.org
10. Official Report 3rd June, 2009 (col.s 2076-2095).
11. Member of Scottish National Party www.scottish.parliament.uk/msp/memberspages/alasdair_allan/index.htm
12. Chair of Scottish Parliamentary Labour Party www.duncanmcneil.com
13. Scottish Government, Scottish Procurement Directorate Scottish Procurement Policy Note, Scottish Government, Edinburgh, 22nd August, 2008 (SPPN 10/2008)
14. Member of Scottish National Party www.scottish.parliament.uk/msp/membersPages/john_wilson/index.htm
15. Official Report 3rd June, 2009 (cols. 2096-2119)
16. Social Work Inspection Agency, Performance Inspection Summary for Edinburgh City Council, SWIA, Edinburgh April 2008.
Footnote:
Following the inquiry into e-auctions, the Scottish Government has been asked to put safeguards in place to ensure that e-auctions cannot be used again for procuring social care services. The plea to amend current guidance has come from Convenor Duncan McNeill in a letter to John Swinney, Cabinet Secretary for Finance and Sustainable Growth.
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