Contact: Frances Farrar Ext: 7147 Email: [email protected]

Steve Garnett Ext: 7272 Email: [email protected]

Kevin Armstrong Ext: 7139 Email: [email protected]

Approved by:...................................... Date:.....................

Councillor Patricia Banks

Executive Member for Adult Social Care

Contact: Frances Farrar Ext: 7147 Email: [email protected]

Steve Garnett Ext: 7272 Email: [email protected]

Kevin Armstrong Ext 7139 Email: [email protected]

1. Summary

1.1 This report presents options for the future delivery of Integrated Community Equipment Services (ICES) for Hampshire. The report analyses the costs and benefits of four options for the service. As a result of this analysis, this report proposes the implementation of a county-wide service in partnership with Hampshire Primary Care Trust (PCT).

1.2 The Service supports the three new corporate priorities; Hampshire safer and more secure for all, Maximising well-being & Enhancing our quality of place. It does so through the timely provision of equipment to disabled, frail and elderly citizens. The range of equipment purchased and stocked is essential to enable people to remain within their own homes or within a community based setting. Most of the equipment is recycled and re-issued. It promotes independence and wellbeing and is central to safe and timely hospital discharges. The service prevents hospital, residential or nursing home admissions by minimising the risks of falls, immobility and breakdown of formal or informal care arrangements.

2. Impact Assessment

2.1 In compiling this report account has been taken of the requirements of the Corporate Equalities Plan and Race Scheme. The recommendation does not have an adverse impact upon minority groups. A full Impact Assessment of Occupational Therapy and Equipment services has started and the completion date is estimated as 31 March 2007.

3. Background

3.1 The Interim Assistant Director Wellbeing and Community Services commissioned a review of all options for the provision of the ICES within Hampshire. This was in response to the following challenges facing the service:

a) Demographic changes resulting in a significant and sustained increase in requests for equipment in particular expensive items such as profiling beds, high risk pressure relieving mattresses and hoists.

b) Rising costs of decontamination and recycling of equipment

c) The key role equipment services will play in promoting the prevention agenda as outlined in national policy initiatives, such as the White Paper "Our Health, Our Care, Our Say"

d) The need to enter into a Section 31 agreement with Hampshire Primary Care Trust and to pursue further partnership working in this area

e) The termination of the lease for the Basingstoke ICES premises in August 2007 and the need to ensure equity and consistency of service across Hampshire

f) The need for service modernisation in response to Adult Services' financial recovery, its duty to secure Value for Money and requirements to meet national performance targets relating to efficiency, quality and timeliness of service.

g) The development of the new Adult Services and Children's Services Departments.

3.2 Within Hampshire there are two equipment services, one situated in Basingstoke and the other in Portsmouth.

3.2.1 The Basingstoke service was established in 1997 and is managed by Hampshire County Council. It provides a service to the former PCT areas of Blackwater Valley & Hart, Mid Hants, North Hants, New Forest and Eastleigh & Test Valley South. The population served is approximately 900,000.

3.2.2. Portsmouth ICES is managed by Portsmouth City PCT and covers Portsmouth City, Portsmouth City PCT and the former PCT areas of East Hants and Fareham & Gosport. The population served is approximately 545,000, of which 325,000 live within Hampshire.

3.3 Basingstoke and Portsmouth supply a broadly similar range of equipment eg bathing and toileting equipment, mobile and ceiling track hoists, profiling beds, pressure relieving mattresses, moving and handling equipment.

3.4 The main difference between the two ICES is the service provided under the Lifting Operations and Lifting Equipment Regulations 1998 (LOLER) and the Provision and Use of Work Equipment Regulations 1998 (PUWER).

3.4.1 Under LOLER and PUWER, items of equipment should be inspected and maintained on a regular basis. Basingstoke ICES have 6 Technicians who undertake this service, which is not provided by Portsmouth ICES.

3.5 Table 1 summarises the overall cost of the two services and their funding arrangements.

Table 1 - Total Projected Costs and Funding for 2006-07.

A full analysis of costs and funding can be found in Appendix A.

4. Demand pressure at Basingstoke ICES

4.1 Demand for equipment has risen steadily since the service was established in 1996/7. The graph below shows the year on year increase in the number of items delivered and collected by the equipment service since it was commissioned, rising from around 8,000 in 1996/97 to over 80,000 in 2005/06.

Graph 1 Number of items of equipment delivered and collected each year, between 1996 and 2006.

4.2 Not only has demand increased, but equipment is remaining within the community for longer and is therefore not available for recycling and re-issue. In addition, demand for the higher value items (profiling beds, high risk pressure relieving mattresses, hoists etc) has risen. The increase in demand is to be expected given the numerous initiatives in both health and social care which rely on the timely provision of equipment and the changing service models which have led to an increasing number of frail and dependent service users being supported in the community.

It is anticipated that with the preventative ethos incorporated in the Wellbeing Agenda, the upward trend looks set to continue in the future.

5. Decontamination and recycling of equipment

The recycling of equipment is a key factor within the service to maintain levels of stock..

5.1 To comply with infection control requirements and the increased volume of equipment recycling, a major review of the existing processes and contract arrangements is underway for Basingstoke ICES.

Initial findings indicate that a considerable potential for annual savings and service efficiencies can be achieved through providing an in house decontamination unit within the new Basingstoke ICES premises.

5.2 Portsmouth have stated their intention to recover full costs for all elements of their equipment service. In relation to decontamination costs the combined figure for Hampshire Adult Services and the former SE Hampshire PCTs has risen from £38,000 for 2005/06 to £168,000 for 2006/07.

5.3 The comparative costs using the same external provider are £6.26 per item for Basingstoke and £13.78 for Portsmouth ICES.

6. Legislative change

6.1 Building on a number of recent government initiatives to promote community care, a new direction for the whole Health and Social care system is set out in the White Paper, published in January 2006, entitled ` Our health, our care, our say: A new direction in community services'

6.2 The four key themes of the paper are:

Providing better prevention services with earlier intervention

Giving users more choice and influence

Tackling inequalities and improving access to community services

Providing more support for people with long term needs

6.3 The White Paper identifies collaboration between local health services and adult services departments as a cornerstone for service delivery.

6.4 These themes emphasise the importance of the ICES model and achieving a robust S31 agreement.

7. The development of the new Adult & Children's Services Departments.

7.1 Children's Services have confirmed their wish to centralise the commissioning/delivery/storage/recycling of paediatric equipment and to include this service within the existing Hampshire ICES. This will be agreed through a Service Level Agreement (SLA) and achieve overarching service efficiencies.

7.2 The requirements of the paediatric equipment service have been incorporated when determining the specification for the new Basingstoke premises.

8. Review of Current Service

8.1 The expiry of the lease on the current Basingstoke site in August 2007 presented a good opportunity to consider how ICES should be provided in order to meet the future challenges presented by its changing environment.

8.2 In order to inform the evaluation of how any proposal would meet the strategic

position a list of essential service benefits were identified by the Department as the following:

_ Consistency/equity across Hampshire in terms of:
* application of eligibility criteria
* procurement and stock control practices
* quality monitoring
* management arrangements
* meeting regulations covering the maintenance of equipment


_ A focus on promoting the best interests of Hampshire clients


_ Flexibility to respond rapidly and effectively to future changes in demand and nature of service provision


_ Rapid and effective distribution system


_ Consistent budget strategy and financial management processes

_ A high level of recycling in a cost effective manner

8.3 These future service benefits form the key service criteria against which all the available options have been appraised.

8.4 Considerable progress in partnership working has been made in the current financial year between the new Hampshire PCT and Hampshire Adult Services:

· Agreement has been reached on the overall size of the ICES budget to ensure the sustainability of the service and to meet national performance targets.

· Both partners are committed to securing the agreed additional funding to achieve this integrated budget and to complete a S31 agreement.

· The ICES Pooled Budget Group agreed that funding will be split on a 50/50 basis.

· The Hampshire PCT have confirmed their support for a one, Hampshire wide service, to be managed by Hampshire Adult Services.

9. Re-provision Options

9.1 Four possible models for future service delivery have been identified.

These are:

Option 1 - No change, continue with existing provision.

Option 2 - Commission one Hampshire wide ICES, managed by HCC and withdraw from the Portsmouth service..

Option 3 - Commission one Hampshire wide ICES from Portsmouth City PCT.

Option 4 - Commission one Hampshire wide ICES from an external provider.

9.2 Each option was examined using :

· A Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis (Full details can be found in Appendix B)

· A service benefits analysis (Full details can be found in Appendix C)

· A financial analysis, including full cost analysis and budget position. (Appendices D and E)

10. Summary of Analyses

10.1 Summary of SWOT Analysis

From the four options considered, Option 2 Commission one Hampshire wide ICES managed by HCC provides the best option.

Specifically it offers :

_ Best value in terms of staffing and overheads through the development of the new service model.

_ Consistency of service delivery and policy implementation. Service discrepancies which currently exist between Basingstoke and Portsmouth ICES will be removed, enabling the implementation of a Hampshire wide service specification, agreed by both HCC and Hampshire PCT. Additionally, it will facilitate the harmonisation of the role of other complementary services across the county, in particular, Red Cross.

_ Consistency of monitoring arrangements and performance data.

_ Reduced risk through not being dependant on the priorities of other local authority and PCT providers.

_ Transparency, flexibility and quality.

10.2 Summary of Service Benefit analysis

10.2.1 From the service benefit analysis it appears that neither Option 1 or Option 3 can satisfy the essential service benefits as they perpetuate the deep-seated differences in approaches between the services run by Hampshire County Council and those run by Portsmouth PCT. This appears to mitigate against the need for consistency in both service access and delivery for Hampshire clients as well the management and operating of the stores.

10.2.2 Options 2, 3 and 4 appear to offer more potential for further consolidation of equipment and the potential for economies of scale. However, only Option 2 and 4 ensure that the service fully complies with legal regulations relating to the maintenance of equipment. Portsmouth ICES has adopted a strategy to compliance with the regulations which is not supported by HCC.

10.2.3 The main concern with Option 4 (the contracted-out approach) is that this is a dynamic service and the flexibility required to respond to changes will be constrained by the tight contract agreement likely to be required by the external service provider.

10.2.4 Options 2 and 4 will require disinvestment from the Portsmouth service which will need to be carefully project managed.

10.3 Summary of Ongoing Revenue Costs

Table 2 below details the ongoing revenue costs of the four options .

An analysis of the net costs demonstrates that Option 2 will deliver the lowest ongoing revenue costs, at £2,823K per annum.

In comparison, this is £126K below Option 1, £1,137K below Option 3 and £2,177K below Option 4.

Table 2: Overall ongoing revenue costs:

10.4 Summary of financial analysis

On the basis of the SWOT, cost benefit analysis and ongoing revenue costs, Option 2 appears to offer the best fit in terms of meeting desired future service benefits as outlined in 8.2, providing the best financial return for the partners and offering the most flexibility to meet likely future changes to service provision.

11. Risk Analysis based on approving Option 2

11.1 Financial Risk - actual cost and savings may be different from projected even beyond the plus/minus 15% margin of error contained in the sensitivity analysis if some of the economies of scale do not materialise.

11.2 Partnership Risk - this option will entail disinvestment from Portsmouth service which has yet to be explored in depth with Portsmouth PCT and Portsmouth City Council.

This will be addressed by developing a comprehensive decommissioning strategy with Portsmouth City PCT.

Portsmouth City PCT have indicated that they will continue to provide a service to Portsmouth City residents irrespective of whether HCC continues to commission a service from them.

11.3 Implementation Risk - a new site has to be sourced, fitted out and stock transferred whilst still maintaining a viable service. In contrast , the Portsmouth option offers an pre-existing site and operational infrastructure.

However, there will be no requirement to consult with users because equipment already on loan will remain with the user following decommissioning and service users will continue to receive their assessments for equipment in the same manner.

11.4 TUPE Risk - Costs could be higher due to the need to transfer staff from the Portsmouth store, for example, the 3 Specialist Advisers employed by the former SE Area PCTs would add £125k to the projected costs assuming the worst case scenario.

Hampshire PCT are actively addressing this issue.

11.5 Stock Risk - Additional stock may have to be purchased if the identification of HCC/Hampshire PCT stock held at Portsmouth cannot be agreed upon.
A project group has been identified to negotiate a detailed, equitable re- provision programme with Portsmouth and manage and monitor the implementation of the proposed future service.

12 Recommendations

a) That Hampshire County Council establishes a single Integrated Community Equipment Service located in Basingstoke

b) That Hampshire County Council and Hampshire PCT terminate their partnership agreement with Portsmouth City PCT and Portsmouth City

c) That the potential costs associated with the premises move are met by prioritising the existing capital budget.

d) That a Section 31 Agreement is entered into with Hampshire PCT incorporating a robust funding strategy to meet the demands on the service and including the Technician Service.

e) That a cost benefit analysis is carried out on incorporating an in-house decontamination unit into the new premises, in place of the current external contracting arrangement.

APPENDIX B

SWOT Analysis of the four service model options.

Option 1. Continue with existing provision

Option 2. Commission one Hampshire wide ICES, managed by HCC

Option 3. Commission Portsmouth ICES to provide a service across Hampshire

Option 4. Commission one Hampshire wide service from an external provider

APPENDIX C

Analysis of essential service benefits

APPENDIX D

APPENDIX E Budget Position

The outturn projections for 2006/07 and the associated funding in Table 1 included additional funding of £100,000 from Hampshire County Council (HCC) being the first tranche of a 4-year agreement to use a capital equipment budget for ICES. This will be matched by £100,000 from Hampshire PCT. Additionally, Hampshire County Council recently invested another £220,000 into ICES from contingency in order to meet Key Performance Indicators set by the government. There are no plans to repeat the investment from contingency. However, there is £200,000 of recurrent funding earmarked for ICES in the 2007/08 budget preparation plus further planned recurrent increases of £100,000 in 2008/09 and £50,000 in 2009/10. It is anticipated that the PCT will fund a further recurrent investment of £184,000 from 2007/08. The impact of this is set out in Table 3.

Table 3: Impact of Budget Strategy on ICES cashflow

On the basis of the above analysis only Option 2 is affordable in the short or long-term as from year 1 both Option 3 and Option 4 require more additional funding than is currently deemed to be affordable. Indeed, Option 2 appears to generate some savings which can be recycled into meeting some of the other longer term pressures on the ICES budgets in terms of stock replacement programme and IT upgrades.