This editor’s nose tells him that the organisation promoting this franchise has not thought through whether or not bodies other than independent operators can legally get involved in such schemes, or whether they would want to. Or maybe he is just picking up on a lack of clarity in the writing of this Community Gateway CIC’s press release.
City of York Tender to spin off Community Equipment and Telecare Service in to Social Enterprise at arms length selling to the public. In development in Walsall Council (like an Argos front desk situated in between Greggs Bakers and Tescos), Olympus Care which was Northamptonshire County Council Provider service again has been selling to the public for some time telecare equipment and services specifically. LAs selling or not would be advised to consider robust codes of conduct such as CECOPS, as well as health and social care legislation as well as additional consumer protection. The examples above are all arms lengths and reduce potential for grey areas that you point out, however the Local Government Act Section 2 gives local authorities considerable power and flexibility to do anything that they consider likely to promote or improve the economic, social or environmental well-being of their area. The benefits can be for all, or part of the community or indeed any person resident in the area. In exercising these powers local authorities must have regard to guidance issued by the relevant secretary of state s5(3) – our legal advisor (a Barrister) has not found any guidance which needs to be taken into account in making these kinds of decisions specifically. It is worthy of note that this Act specifically prohibits local authorities from doing anything by virtue of the act, which any other provision would specifically prohibit; i.e. it is not to be used as a license to override other regulations by which local authorities are bound. Moreover, it cannot be used as a means of raising money. By contrast, the Local Government Act 2003 s93 clearly gives local authorities the power to charge for “discretionary services”. This proposed service would, in our legal advisers opinion, fall within the definition of discretionary service. It is, of course, arguable that those opposed to such a (retail) model may suggest that by introducing a retail element the council is, to some degree, obviating responsibility for some of those who would otherwise have been eligible for services. However, this risk is minimal, not least because the proposed model promotes greater independence and safety and reflects most current prevailing common sense. In particular, intentions around specific targeting of earlier intervention, as opposed to necessarily replacing any services deemed appropriate to existing users or new referrals for people identified as FACs eligible. There is some flexibility in the amounts local authorities can raise by charging for discretionary services – provided that, taking one financial year with another, the income from charging does not exceed the cost of provision – this is set down in guidance from Office of the Deputy Prime Minister (2003) general power for best value authorities charging for discretionary service – guidance on the power in the Local Government Act 2003, para 21. Moreover, as the law stand it seems tolerably clear that this guidance would apply similarly to any trading company set up by a local authority to deliver any discretionary service. Whilst there is no legal authority specifically dealing with this point it must be arguable that the same would be true if a social enterprise was put in place to deliver the service. It is TCG’s view that given some of these constraints whilst it seems acceptable and desirable position for a LA to charge any person wishing to benefit from Telecare, other legal forms at arms length may be more suited such as cooperatives, mutuals, and Community Interest Companies.
Any organisation considering the route of a retail model should seek their own legal advise and this is legal opinion TCG sought on behalf of a council setting up such a service, and qualified advice came from a Barrister, Lead Member of a County Council for Adult Services. Any Council would also be wise to consider this in the context of their Fairer Charging Policy. I hope that you can print this comment and you can see that TCG has thought this through. In fact this is our point – to undertake this alone is a mammoth task and undertaken as a concession/ franchisee reduces the costs and risks considerably and brings about more benefits, by way of for example shared marketing pools/ budgets, shared IT, development costs etc.
In view of the difficult legal background to this, it would seem that the Community Gateway is trying yet another desperate method of creating a viable business that might justify the enormous investment by West Midlands local authorities, strategic health authority and Medilink in setting up the Ask Tara and Alvolution databases. Retail approaches may sound cost-effective but many shops fail in a competitive environment – especially if their product isn’t the best out there!
Steve Hards, Editor
Thanks for the response Richard (and the comment, Jo). When flagging up the press release I’d forgotten the catch-all Local Government Act Section 2! Is it often used in practice? Perhaps some of our local authority readers can tell us.
Many thanks for printing the response Steve and to Jo for her comment as it is very worthy of response. In year 1 West Midlands councils paid individually for a tailored customised web site £2,350 (partly subsidised by IEWM and partly through our own surplus rather than distributing a shareholder dividend). In year 2 unsubsidised costs are £6000. This includes the actual running, administration (not just hardware/ hosting) and development of marketing and comms and attendance and support of events to promote telecare solutions for those lucky/ unlucky enough to be eligible, and much of the ongoing maintenance to the product listings, ratings and reviews. Plus telecare expertise gained from delivering projects such as for an investment of £15k, setting up processes to deliver £0.5mn savings. There should be some editor notes to correct the above comments from Jo – no funding has been provided by Medilink or the WM SHA (although support from Jo Harding and words of wisdom greatly received).
The likes of Starbucks and Costa can open up a franchises within an Acute Trust’s hospital with less effort than this and they are just in it for the money.
A shop on the High Street selling items, signposting services and providing a not for profit service should be the easiest thing to set up.
Is there any wonder we are in the state we are in? Instead of having an independent working with statutory, non statutory and the volcom sectors you will just have private enterprise which is great for the local economy but it most definitely is not a place where you will get what’s best for you; you will get whatever the change in your pocket can buy you.
Sorry to revisit this 7 years later but I would just like an expert opinion on how the Localism Act 2011 affects this process? Does it affect it? Does it free up local authorities to open up their own retail outlets?
Any and all thoughts, interpretations or dismissals welcome.