Individual Service Funds (ISFs) in Dorset

Author: Simon Duffy with Chris Watson, Joint Commissioning Manager - Learning Disabilities & Mental Health

The personalisation policy and then the Care Act (2014) set out a path for the development of social care in England. These same ideas have, in principle, also been adopted by health, education and children services.

However, there are two major problems:

1. Austerity has not just seen severe cuts but there has also been a tendency from some authorities to increasingly control what support is provided and how. This drives us backwards towards institutional care.
2. Old systems and old thinking still dominate and faulty assumptions about procurement or commissioning overrule the imperatives of personalisation.

Progress remains slow:

• Direct Payments has grown, but has probably reached its natural limit at about 25% of all service provision.
• The use of Managed Personal Budgets or Individual Service Funds (ISFs) has developed effectively.
• The common practice of counting local authority ‘managed accounts’ as if they were real personal budgets has come under critical scrutiny.
• There is significant evidence that many people do not know their budget nor do they get the assistance they need to manage their budget.
• There have been some important achievements on the ground, demonstrating significant improvements in outcomes and efficiency - but this has not led to wider change.

This is despite the fact that the legislation is very supportive:

• The Care Act is strong on general principles for choice and control.
• Although, unlike the Scottish legislation, it does not make the possibility of using ISFs as clear as it could have been
• Subsequent guidance has tried to help clarify that a managed personal budget can be created under contract, and if so it is not a Direct Payment.
• Critically any managed personal budget, and hence the contract, must be provide the person and their supporters with flexibility.
• Unfortunately monitoring of personal budgets does not distinguish real ISFs from merely nominal personal budget.

However there are the first signs of a critical break through. Chris Watson, a commissioner from Dorset, is leading some of the most ground-breaking developments on ISFs. There they have begun a radical redesign of the whole operating system for commissioning in Dorset.

Chris described how in the past commissioners:

• Focused on designing support using time and task 
• Pushed down unit costs - focussing on making the cost of hours cheaper
• Created contracting frameworks designed around reducing cost rather than driving up quality
• Included set support plans as part of the contract (which had to be followed even if when the person wanted to make a change)
• Made it almost impossible for providers to vary a persons support
• Focused on contract compliance, but not worrying about outcomes being delivered (this was left for social workers and frontline staff)
• Used support plans and care diaries to rigidly fix the delivery of support 

This system never worked very well, and it is now under critical strain:

• Provider staff costs are being pushed up by national legislation on salaries and terms and conditions.
• Cuts in commissioning team numbers meant it became difficult to keep up with the demands of the system that we had created.
• Social work and commissioning often define a persons support at a point of crisis and there was previously no incentive for providers to reduce the level of support.
• It often took a lot of external interference to try and persuade providers to reduce hours of contracted support. This was especially difficult in residential care home settings with complex staffing and fee structures.
• Workload and staffing pressures meant that annual reviews were often checking that people were ‘happy and safe’. The pressure to hit government key performance indicators around review numbers meant that it was often difficult to spend extended time to really explore possibilities for people who were doing okay. (In an annual audit one year, 98% of reviews were found to have had led to support packages that stayed the same or went up in cost.)

Chris described how the Care Act 2014 was very helpful in re-orientating thinking towards an outcomes-focused approach. It led to a new kind of language and thinking.

Dorset has worked to engage with a range or organisations as part of a new quality framework which focused on core values and their ability to listen to and respect people and families (using a simple Gold, Silver, Bronze rating system). 

Some of the key areas of change have been:

• Using indicative budgets 
• Plans developed jointly with providers and final budget agreed 
• All commissioned providers can offer an ISF and work flexibly around the person
• A move away from rigid contracting by hours and fixed support plans towards outcomes and flexibility

The contractual changes were actually relatively simple - in the main this involved adding in some clauses that described how providers can flex their support as long as it is linked to an identified outcome and is in line with what the person or their circle of support wishes (and some clauses about audit and records). Both procurement and the in house legal teams were content with how the ISF model works - they understand that the local authority would define the personal budget (in line with the Care Act duty) and the person then chooses to deploy it via either a direct payment or an ISF (from the register of ISF providers or the commissioned framework). Provided there is a simple audit trail of how the decision around choice of provider was arrived at and it is clear within this that the person and their family or circle of support were in charge then is not a commissioned service and therefore procurement legislation doesn't not apply.

Gold tier performers are organisations who recognise that when a budget is not needed it should be returned back to the local authority or CCG for others to use. The ISF payment system created in Dorset works via exactly the same business process as is used for direct payments (with slightly different monitoring arrangements), which made setting it up much more straightforward and helped with colleagues understanding of the principle. Payments to the ISF holder are automated and use the same finance system as direct payments. 

Dorset operate an ISF register which is fairly open for support providers and other types of organisations such as brokers to get on. There are currently 11 providers on the list (more applications are received each month) and a Quality Assurance panel that includes people and families is used to review applications to join. Dorset put this on their online systems. Some ISF providers are direct providers of support, others work as holding accounts plus brokerage. Providers are now getting on board, revising their internal structures to meet the accounting requirements of the system. It seems to be also very helpful in getting services to deregister from residential care. ISFs help people see that contract security comes from doing a good job for the customer and takes away their worry about LA tendering and procurement. This process is also making service providers think about how to be creative - for real.

Dorset's ISF paperwork is available for download here and you can also see their contracting framework.

Today there are real case studies showing improved quality of life for people and families and of funding being reduced or returned by service providers: One provider recently offered to return £7,500 to the commissioning CCG from a jointly funded personal budget. Dorset are seeing people’s lives improving and less support being required at the same time as result of flexible support.

The publisher is the Centre for Welfare Reform.

Individual Service Funds (ISFs) in Dorset © Simon Duffy 2017.

All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.