Charging for Social Care

A Study of Consumer Charges and the Personal Social Services

Ken Judge, James Matthews

• Publisher: Routledge
• Year: 2021
• eBook ISBN: 9781000437867
• Edition: 1
• Topic: Medicine
• Subtopic: Social Work

Despite the widely held belief that the social services were allocated solely on the basis of client need, and could therefore be directly contrasted with the operation of the private market, in the 1970s there remained a wide range of services for which the consumer had to pay directly at the time of consumption. Consumer charges were widely used, for example, for residential accommodation, for the provision of day care and for domiciliary services.

Originally published in 1980, Charging for Social Care provided a long overdue examination of the use of these charges in the personal social services. It analyses their historical origins, current operation and their social and financial significance. In addition, it provides a clear theoretical framework within which pricing policies should be determined and outlines the policy for pricing personal social services in the future. In undertaking this analysis Ken Judge and James Matthews had gone beyond the rhetoric which in the past had characterised discussions about charges. Their detailed and perceptive study was based on a report for the Department of Health and Social Security. It would still be of interest to students and teachers of social policy and social administration, to policy makers in both central and local government, to students of the economics of social policy and of the public sector, to social workers, and to all those with an interest in the personal social services and in public spending decisions.

Chapter 1 INTRODUCTION AND SUMMARY

One of the characteristic features of the British system of social welfare, in theory, is that available resources are rationed according to somewhat elusive concepts of need rather than by recourse to the price mechanism. The reality, however, is that this principle has never been fully established in practice, and consumer charges for different social services have been an integral part of the historical development of the welfare state. For example, at the beginning of the twentieth century the Minority Report of the Royal Commission on the Poor Laws painted a graphic picture of the varied development of, and inconsistencies in, charging policies:

Practically all the Local Authorities affording Public Assistance in any form – Poor Law, Public Health, Education or Police Authorities – have the power, in respect of some of their services, to charge the whole or part of the cost upon the individual benefited or the persons legally liable to pay in respect of him. These powers differ from service to service and from Authority to Authority, alike in the amount or proportion of the expense that is chargeable; in the discretion allowed to the Authority to charge or not to charge as it sees fit; in the conditions attached to the charge or exemption from payment; in the degree of poverty entitling to exemption; in the degree of relationship entailing payment for dependents, and in the process of recovery and its effectiveness. This chaotic agglomeration of legal powers, conferred on different Authorities at different dates, for different purposes, but all alike entailing on the individual citizen definite financial responsibilities, proceed upon no common principle. Moreover, the practice . . . is even more wanting in principle than the law; varying, indeed, from systematic omission to charge or recover anything, up to attempts to exact an entirely prohibitive payment for the service performed. (Poor Law, 1909, p. 286)

Since this was written, all the social services have undergone substantial modification and rationalisation, but many of the new statutes have retained clauses enabling public agencies to charge consumers. Moreover, as many of the agencies are local authorities, which jealously guard their autonomy, the ‘chaotic agglomeration’ of charging policies has persisted to the present day. In fact, since the onset of prolonged economic depression and with the persistence of financial constraints on public authorities, there have been repeated calls from the government (DOE, 1975, para. 21), from local authority leaders (The Times, 1976) and from political pressure groups (Bow Group, 1976) for an extension of the use of charges in the delivery of social welfare. Even the Labour Party, which is ideologically opposed to the use of charges to achieve social welfare objectives, has seen successive Labour administrations retain and extend the use of charges. The main reason for this is that social policy objectives are generally subordinated to economic ones; or, as Lord Diamond, formerly Chief Secretary to the Treasury (and de facto Minister of Public Expenditure) in the Labour governments from 1964 to 1970, wrote: ‘What is relevant here is . . . that selective charges may be made in order simply to save money and not in pursuit of a general line of social policy – indeed, in complete opposition to it’ (Diamond, 1975, p. 33).

Far from being an exception to this general picture, the personal social services probably contain more variations, inconsistencies, anomalies and means-testing in relation to charges than any other social service. The prevalence of means-testing is particularly ironic when it is considered that social workers have been to the forefront in demanding its abolition elsewhere but have largely ignored what is happening in their own departments. It is an unfortunate fact, however, that a full evaluation of the role of charges within social services departments has been largely neglected by everyone for far too long.

In recent years, however, charges have assumed a new importance. On the one hand, the government has urged local authorities to increase charges. For example, the expenditure guideline for the personal social services, associated with the Rate Support Grant settlement for 1976-7, suggested that ‘some increase in income from charges’ might be one way of reducing the need for cuts in service provision and stated quite categorically that, as a minimum, ‘charges should be raised sufficiently to maintain income in real terms’ (DOE Circular, 1975, para. 17). On the other hand, the Layfield Committee on Local Government Finance has taken the advice of the Association of Directors of Social Services (ADSS) and recommended ‘that there should be a review of both central and local policies towards charging for local services, to be carried out jointly by the government and local authorities’ (Cmnd 6453, 1976, p. 142).

The Layfield Committee discussed charges in its deliberations on local government finance but decided that the full consideration of the issues involved extended beyond its terms of reference. It therefore recommended that a separate review be undertaken with the objectives of:

1. determining which charges should be fixed or regulated by government and which should be left to local discretion;
2. removing anomalies both within and between services and between local authority and other public services;
3. reviewing the statutory level of charges; and
4. recommending which services should normally be expected to cover the full costs (Cmnd 6453, 1976, p. 140).

Since the publication of the Layfield Report the DHSS has produced a confidential discussion paper for the local authority associations primarily concerned with the anomalies involved in charging for local-authority social services. One of the conclusions of this unpublished paper was that a review of charges might best be undertaken on the lines recommended by the Lay-field Committee, with a view to evolving a coherent policy which could offer criteria, apart from that of raising revenue, by which charges for each service could be determined.

In the event the government accepted the recommendation of the Lay-field Committee, and the Green Paper on Local Government Finance announced that:

The Government accept the Committee’s proposal and intend to discuss with the local authority associations the scope, composition and terms of reference of the review. The aims would be to determine for which services charges should be prescribed centrally and which left to local discretion; to remove anomalies within and between services and between local authority and other public services; to review the statutory level of charges; to recommend which services should normally be expected to cover their full costs; and to recommend appropriate criteria for setting charges. (Cmnd 6813, 1977, pp. 20-1)

The review will include an examination of the pricing practices and policies that exist in the local-authority social services. We hope that this book will be of some use to the representatives of central and local government who are concerned about the personal social services and connected with the general review.

Before we specify the objectives of our research and the methods used to pursue them, it is important to emphasise that, although the research area is a large one, the project was both financially modest and limited in duration. The paramount objective was to produce some policy-relevant data as quickly as possible, and because of this the original proposal recognised that ‘there will almost certainly be a tight time constraint and the project is planned on the basis of that which is feasible in a short time period rather than that which would be more desirable on scientific grounds’.

The two specific aims of the research were to provide policy-makers in central and local government with:

1. a more comprehensive information-base about charges; and
2. a critical commentary on the development, and present state, of pricing policy.

In particular, it was intended to focus attention upon the following:

1. the reasons or objectives involved when different charges were introduced;
2. the historical development and changing impact of charges since their introduction;
3. the extent of variations between authorities in their methods of assessment and levels of charges;
4. anomalies within and between the public and private sectors;
5. the cost-effectiveness of charges;
6. the deterrent effect, or impact on demand for service, of charges; and
7. the relevance of economic theory to the formulation of an optimal pricing policy.

The information upon which to examine the above topics was to be drawn from published material, from official papers and statistics and from data provided by local authorities.

In the event, the actual research conducted was slightly more restricted than that originally intended, largely because of pressure of time, and we narrowed the focus in other ways by concerning ourselves only with English social-services departments and by choosing to examine in detail just five of the many services provided. The five chosen were:

1. charges for residential accommodation for the elderly;
2. parental contributions for children in care;
3. charges for day nurseries;
4. charges for home helps; and
5. charges for meals delivered to the home.

These services account for more than 80 per cent of the income received from consumers of local-authority social services and fully represent, in our view, the range of problems and possibilities associated with adopting pricing policies for the residential, day care and domiciliary services.

We obtained information to carry out the project from three main sources: details about charging practices from local authorities; statistical data from DHSS and published sources; and historical evidence from official papers and publications. The most critical aspect of the data collection was the liaison with local authorities. Given the time available, it was not thought possible to draw a sample and approach individual authorities. Instead, we adopted a blanket approach and pursued contacts with every social-services department or allied organisation interested in our research. The method that we adopted was to write a short pamphlet, Charges in the Personal Social Services (Judge and Matthews, 1977), which contained details of our proposed research, and to send it to all directors of social services in England, encouraging those interested in pricing policy to contact us. We cannot claim to have obtained a scientifically representative sample of authorities in this way, but we did obtain information from a wide range of departments. Forty-two authorities provided some kind of written information, and we subsequently visited fifteen of them, some on a number of occasions; we had particularly close contact with Bradford, Devon, Essex, Kingston-upon-Thames and Wiltshire. We also visited and made contact with a variety of other organisations, including the North West Administrators Group, the National Consumer Council (NCC), the Social Services Research Group (SSRG), the Supplementary Benefits Commission (SBC), the Association of Metropolitan Authorities and the Association of County Councils. Further information about the statistical, historical and other sources that we found useful are given in later chapters.

SUMMARY

The remainder of this chapter summarises the contents of the substantive part of the book.

Chapter 2: The Use of Charges

In the financial year 1975-6 consumer charges in the local-authority social services met almost 11 per cent of the total gross expenditure. This chapter examines the legislative basis of consumer charges, analyses some of the territorial variations in charges and assessment schemes and points out the anomalies that result from the lack of an overall charging policy for all the social services.

The degree of autonomy granted to local authorities in determining the level of charges and the character of their assessment scales is dictated by legislation. In nearly all cases the legislation empowers local authorities, subject to the approval of the Secretary of State for Social Services,...

Table of contents

• Cover
• Half-Title Page
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Acknowledgments
• Note on Abbreviations
• Table of Contents
• Dedication Page
• 1 Introduction and Summary
• 2 The Use of Charges
• 3 The Origins and Purposes of Charges
• 4 Economic Theory and Pricing Policy
• 5 Variations Between Authorities
• 6 The Deterrent Effect of Charges
• 7 Consumers and Charges
• 8 Charges and Income Maintenance
• 9 Policy Options for the Future
• References
• Index