Joint Committee on Statutory Instruments Nineteenth Report

S.I. 2003/753: further memorandum from the Department of Health


109.  The Committee has requested a memorandum on the following point:

This instrument increases by 20% the fees to be paid in respect of establishments and agencies other than nurses' agencies, domiciliary care agencies and residential family centres. Explain the reason for the size of this increase.

110.  These Regulations consolidate with amendments the National Care Standards Commission (Fees and Frequency of Inspections) Regulations 2001 ("the Regulations").

111.  The Regulations set the basis for the regulatory activity and funding of the National Care Standards Commission (NCSC). They reflect the work involved in registering and inspecting care establishments and agencies and provide for a safe and realistic level of inspection activity.

112.  The Government's long-term plan is to move to full cost recovery in respect of the NCSC after five years - subject to a review after two. The policy intention is to make the NCSC self-funding from fee income, free from central government subsidy - the level of which stands at £90m for 2003/04. The fee increases for 2003/04, though minor in cash terms, are the necessary first step towards achieving the Government's long-term objective of financial self-sufficiency for the NCSC.

113.  In due course, the recurrent regulatory running costs of the NCSC will be borne by the providers and purchasers of care. The Government believes it is the right approach to transfer the burden of these costs from the taxpayer to providers of care services, and through their service charges, to the users of these services, as these are the people who stand to gain most from better regulation.

114.  As progress is made towards full cost recovery, fees will need to rise. The implications of the Government's approach were comprehensively set out in the wide-ranging public consultation, undertaken in 2001[1]. The proposals therein offered a phasing in of regulatory costs with a review after two years - a proposal that was generally supported. Accordingly, in the short term the Government has taken a gradualist approach in order to limit the impact on sectors. Last year's fees (2002/03) were set at a very low level in order to help care establishments adjust to the new regulatory regime.

115.  It is recognised that, as purchasers of care, both Local Authorities and Health Authorities may be faced with higher purchasing costs, to the extent that providers incorporate regulatory fees in the cost of placements. The Government has provided, through appropriate funding adjustments, the financial means necessary to ensure that the regulatory fee changes should not affect either Local Authorities' or Health Authorities' ability to purchase or support care.

14th April 2003

1   Frequencies of Inspection and Regulatory Fees - A Consultation Paper (DH, 2001) Back

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