Tendering For Care

The number of NHS beds in Wales fell by 1.5 per cent between 2004-05 and 2005-06 and by 13 per cent over the ten years from 1995-96 to 2005-06, new figures reveal today.

The Welsh Assembly statistics show that between 2004-05 and 2005-06 the total number of NHS beds, including mental health, learning disability, maternity and geriatric medicine beds, fell by 206 (1.5 per cent) to 13,808.

The number of beds in acute and geriatric specialties fell by 84 (0.8 per cent) to 10,842. Over the ten years from 1995-96 to 2005-06 the number of NHS beds in total fell by 2,143 (13 per cent). The number of beds in acute and geriatric specialties fell by 669 (6 per cent). Beds in the mental health sector fell by 1,285 (35 per cent) to 2,444.

The percentage occupancy increased from 78.0 to 82.9 per cent. Annual throughput (number of patients treated per bed) increased from 32.3 to 36.3. The average duration of stay in acute specialties increased from 5.9 to 6.9 days.

The situation is exacerbated by the ongoing "domino effect" of bed blocking in Welsh hospitals is the number one problem facing the health service. The number of in hospital beds, even though they are fit to be discharged, is growing month on month in Wales. In Wales' largest NHS trust alone, the equivalent of six wards are full of patients who should be cared for in the community. It is feared that the situation will only worsen as the winter progresses, putting enormous pressures on hospital services, including Accident and Emergency units, and forcing operations to be cancelled.

The National Assembly has voted for a "short, sharp" independent review of the problem. Bed blocking - known as delayed transfers of care, in the NHS - has reached its highest peak in Wales for almost two years, with 731 hospital beds out of commission in September with Cardiff and Vale NHS Trust alone delaying 195 delayed transfers of care at a cost of £2m. It is calculated that bed blocking costs the NHS up to £90m a year.

In the "bed blocking" process a patient is declared medically fit for discharge but needs a nursing home place. No nursing home beds are available in the community. The patient remains in hospital. Hospital cancels some patient's operations because there are not enough free beds. Delays arise in Accident and Emergency as patients wait hours on trolleys while staff try to locate a spare bed.

It has been said that elderly people, and other vulnerable groups could find themselves on the wrong side of the law if they spend their Direct Payments. In the name of customer choice, a number of County Councils gives this money in the form of cash grants out of its social services budget - under the Direct Payments Scheme. But at a meeting this week of Bedfordshire County Council, Councillors pointed out that this means that the recipients of Direct Payments would technically be the employers of their carers and would have to abide by employment law.

This is clearly an area which requires further investigation. If any readers have comments, or can throw some light on this situation we would be pleased to hear from them and to publish further information on this website.

A stark warning from local councils that vulnerable people will lose social services.

The claims were made in the Local Government Association's Report and were condemned by the local government minister, as "untrue and unhelpful"

The LGA warned that it will need substantial increases in funding to cope with a growing number of elderly people by 2009. The organisation, which represents 400 local authorities, also warned that councils were being hit by higher utility bills, big increases in the cost of road maintenance and a huge increase in the cost of collecting waste and recycling. The Report says that without additional funding, local government may potentially face a situation, by as early as 2009, where it cannot afford to provide support to the 370,000 people with lower levels of need.

Among the big increases in costs which outstrip standard rates of inflation are:

• unit costs in privately run childrens' homes have increased by 45% and local authority provision by 28% between 1999/00 and 2003/04;
• according to the Personal Social Services Research Unit, pay and prices in the adult social care sector have grown faster than RPI by on average 2% per annum ;
• social care contracts are significantly outstripping inflation - costs of residential care for older people have increased by almost 7% a year. This in part can be explained by increases in the minimum wage of 7.8% in 2004, 3.6% in 2005 and 4.7% in 2006;
• between 2003/04 and 2004/05 alone, local authority spending on energy increased by £31m, (12%). In the first six months of 2006, gas and electricity prices increased by 30%. This has impacted on the contracts negotiated by local authorities ;
• Local authorities have faced increasing costs of construction. Public sector building inflation between 1998 and 2005 was 56%, compared to the RPI increase of 19%
• according to the ROADCON index, highways maintenance inflation was 7% in 2005/06 ;
• a number of authorities are also facing significant increases in bus service tender prices. This is impacting on home to school transport costs, which increased by 4.3% in 2006/07 and concessionary fares.

The chairman of the Local Government Association, Sandy Bruce-Lockhart, said

"For services other than schools, which are a clear government priority, government funding has increased by just 14% in real terms. This is in stark contrast to the 90% provided to the NHS. The government grant has not kept pace with the demands on local government, including rising demand and the costs from new legislation."

The reports says local councils have been better than Whitehall in delivering efficiency savings of some £3bn.

It has been said that the current requirements regarding the tendering process are a government requirement which will change in time, therefore organisations do not need to plan to ensure that they stand a good chance of success in the procurement process. Nothing could be further from the truth – a matter which was underlined in a speech made by Sir Peter Gershon on 13th November 2006. It is "efficiency savings" which are diving the whole procurement agenda. The full text of the speech is available on the members' section of the website. However these are some of the key points regarding procurement now and in the future:

• annually the public sector spends £11 billion on social care and £13 billion on social housing;
• through smart procurement bringing expertise to areas of inefficiency in the past, for example the procurement of social care;
• of the savings across the public sector, in excess of £6 billion should come from procurement in 2007/08;
• there are significant savings to be made through simplification of processes in the back office, through standardisation of processes, through sharing back office services between different public sector bodies and through outsourcing;
• some government departmental real settlements per annum from 2008 are minus 5% this compares with minus 2.5% per annum in the current spending review period
• there are very very substantial gains to be made in the whole area of public procurement;
• although there have been some very well publicised successes in the use of electronic auctions, the fact remains that across the public sector the use of electronic auctions is extremely limited;
• future efficiency gains are to continue to separate the commissioning and the provision of front line services;
• to enable contestability between existing providers and other potential providers;
• to increase scope to increase partnering with both the private and not-for-profit sectors;
• to create a better framework on which there can be long-term contracting between the public sector and the voluntary and community sector.

So the message is to learn about procurement systems and procedures – this is not going to go away anytime soon.

It is quite amazing how long it is taking for the reality of the new procurement environment to dawn in some areas. A major Trade Union - Amicus appears to have little understanding of what is happening and the legal context which constrains the way in which public purchasers must now approach the procurement process. We hear regularly of Boards of Trustees who believe that this is a current government "fad" which will go away sometime soon. Meanwhile others are trying to get around the tendering process using approaches such as Direct Payment systems, which are themselves governed by procurement rules, and more importantly by employment legislation. On the other hand we are receiving a number of calls each week from organisations who have lost core contracts and do not understand why; how do they need to approach the tendering process in order to be successful?

The front page of "Third Sector" published on 15th November 2006 provides both a warning and a positive lesson for the future. The attached document, which can be downloaded as a .pdf file, explains why.