Select Committee on Health Minutes of Evidence


APPENDIX 1

COSTS OF DOMICILIARY CARE REGULATION

ONCE ONLY IMPLEMENTATION COSTS

  The proposed Standards and Regulations will create once only costs of implementation. For the independent sector of the industry, these will include:

Registration and inspection fees
£4.20 million
Registration and inspection administration
£0.14 million
Register of interests
£4.50 million
Recruit separate management
£1.80 million
Rewrite policies and staff training
£5.00 million
Separate records by business type within branch
£0.75 million
Separate space, within premises
£1.35 million
Duplicate/overlapping user documents—multiple languages
£2.69 million
ID Cards—multiple languages
£0.02 million
Immediate stationery change
£1.50 million
Retrospective employment file audits
£0.16 million
Retrospective CRB checks
£2.55 million
Implement Care worker programme at VQ2
£0.50 million
Implement Care worker induction programme
£0.15 million
GP reports on managers
£0.19 million
Total
£25.50 million


  Assuming that one off costs are capitalised over three years, this would equate to an increased charge to clients of approximately £0.07 per hour, for the independent sector.

  Various proposed measures apply only to providers operating more than one branch or to providers whose operations are integrated with complementary services. The extra cost to clients of these organisations would be around £0.10 per hour. This is patently unfair and would seriously distort competition.

  If the amendments we recommend are implemented, the additional costs reduce to a total of £14.77 million or £0.04 per hour and the unfair distortion is removed.

ONGOING OPERATION

  We estimate that the ongoing costs of the draft proposals at £261 million equating to an increased charge to clients of approximately £2.27 per hour, for the independent sector.

  Again, various proposed measures apply only to providers operating more than one branch or to providers whose operations are integrated with complementary services. The extra cost to clients of these organisations would be around £2.77 per hour. This is again unfair and would further distort competition to a degree which would justify referral to OFT.

  If the amendments we recommend were implemented, the additional ongoing costs reduce to £165.04 million or £1.44 per hour and the unfair distortion of competition is removed.

  We estimate the annual cost of ongoing operation to the proposed Regulations, across the independent sector, will be:

Registration and inspection fees
£9.30 million
Registration and inspection administration
£0.28 million
Register of interests
£4.50 million
Separate management from other businesses within branch
£22.50 million
Separate finance plan/accounts by business type, by branch
£2.44 million
Separate records by business type within branch
£0.75 million
Separate space, within premises—minimum
£0.75 million
Duplicate/overlapping user documents—multiple languages
£2.39 million
Out of hours contact names
£24.22 million
ID Cards—multiple languages
£0.07 million
CRB checks
£0.77 million
Care worker qualifications at VQ2
£61.04 million
Care worker induction training and update
£31.37 million
Management qualifications at VQ 4
£2.30 million
Additional pay for qualified care workers
£57.50 million
Additional pay for qualified managers
£3.00 million
User QA visits by branch
£10.78 million
Unannounced QA visits by corporate to branch
£1.80 million
User/care worker QA visits by corporate
£0.68 million
QA reports to commission and published
£0.75 million
Quarterly supervision and annual appraisal
£14.70 million
Quarterly group meetings
£7.95 million
Total
£260.79 million


  Some of the ongoing costs detailed are calculated at rates which will be applicable some time in the future, so there may be some phasing of the increase. Examples of this include the Registration and Inspection fees and the extra pay to qualified staff, which will be needed to incentivise and reward training.

  We have not, however included any allowance for the substantial increase in pay rates for all workers, which will be needed to improve recruitment and retention, over the next few years.


 
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Prepared 29 July 2002