In all areas cost is likely to be a critical factor in determining an approach to AA provision. In order to be effective, appropriate adult provision requires adequate resources not just for front line delivery but for leadership, co-ordination and development. Developers / commissioners will want to assure themselves that their chosen approach represents the best possible value for money.
Basic benchmark costs for AA provision were provided by the There to Help (2015) report (see paper D), which conducted a survey with existing providers.
The research divided the annual funding for each scheme by its total annual call out figure, to arrive at a unit cost per call out.
Suitable data was obtained from 26 schemes from across England and Wales. The survey also considered whether or not volunteers were used and whether the scheme could cope with current demand.
In terms of unit cost (per call out), the report found that:
- The average unit cost (per call out) when undertaken by a social worker was £375 (if only attending for an average of 2.5 hours);
- The average unit cost (per call out) for a dedicated, trained AA from an organised scheme was £80.79,
- The average unit cost for volunteer schemes was £63.73, compared to £100 for non-volunteer schemes
- The charity sector provided the lowest average unit cost at £59.61
- The average unit cost of schemes who said they:
- "sometimes" or "often" could not meet demand was £30.64
- "always" or "generally" met demand was £71.65
- "had some spare capacity" was £96.58.
Curtis (2013) Unit costs of Health and Social Care 2013. Kent: Personal Services Research Unit. This report calculated that the average cost of face-to-face social work was £128 per hour or £171 per hour in London. Based on an average callout time of 2.5 hours at £150 per hour the unit cost per call out is £375
While the figures above provide a benchmark, they should not be relied upon to be accurate in the current local context. In particular, scheme developers should be aware that the data is based on:
- data from the 2013/14 financial year;
- existing levels of demand (where identification of need has increased, and the rate of AA call out has increased significantly, there may now be increased efficiencies of scale) ;
- existing service design at the time, which may not have met legal requirements or current local expectations (for example some schemes in the sample may have effectively been attending only for the interview stage and therefore actual costs may be higher);
- they are based almost exclusively on custody-only provision, so do not take account of any costs that might be associated with supporting voluntary interviews at other locations.
When estimating costs, scheme developers should consider the need for provision to meet current standards and expectations, especially those set out in the statutory Codes of Practice to PACE 1984.
The unit cost of an AA call out will clearly be higher for a scheme that:
- is available on a 24 hour basis
- attends for entire custody episodes
- attends for voluntary interviews at various locations
- delivers initial and ongoing training in line with the NAAN National Standards and National Training Pack.
However, developers should also consider the potential for innovation in service design to increase efficiency without reducing other critical aspects (such as effectiveness and independence).
Scheme developer may also wish to benchmark against other services in the same area, such as general, Independent Mental Health and Independent Mental Capacity Advocacy contracts.
Payments to sessional staff may be relevant in a number of scenarios. For example:-
- You do not wish to use volunteers or employees as AAs;
- Other AAs are to be used during specific hours only (e.g. employees during office hours or volunteers out of office hours).
There are no nationally agreed pay rates for sessional AAs. Therefore, specific rates will be set at a local level based on supply of and demand for the relevant abilities.
- The examples below refer to direct payments made to AAs by the scheme. They do not include any of the operating costs of a scheme (e.g. management and coordination, travel and subsistence expenses, recruitment etc). The ultimate hourly cost to the developer / commissioner will therefore be significantly higher.
- Legal advice should be sought wherever a hybrid (volunteers and paid staff) is used, including where volunteers are paid as sessional staff at certain times (e.g. out of hours). It is important to avoid situations in which volunteers replace paid staff or where employment relationships are unintentionally created.
Example 1: North West England
Child Action North West is a charitable provider which operates contracted out schemes on behalf of various local authorities in the North West of England. As of January 2018 it pays sessional AAs:
- £8.80 per hour; or
- £9.60 per hour for evening/weekend; or
- £11.00 per hour after 11.00 pm
Example 2: Southern England
The Appropriate Adult Service is a private sector provider which operates contracted out schemes on behalf of various local authorities in England. In Hampshire, as of January 2018, it pays sessional AAs:
- £8.50 per hour 8am - midnight
- £15.00 per hour midnight – 8am.
Example 3: Northern Ireland
Mindwise operates a single contracted out service for the whole of Northern Ireland. As of January 2015 it paid the following for part-time fixed contract employees (not sessional staff):
- Salary: £17,500 - £19,798 per annum pro rata (roughly £8.40-£9.50 an hour on a standard working week)
While benchmarking costs will provide an initial idea of potential costs, it will be necessary to develop a ‘ground-up’ budget reflecting local needs and expectations. Examples of budget lines for an AA scheme include: -
- AA scheme manager (lead member of staff)
- AA officers (supporting members of staff)
- Employed or sessional AAs (including on-call / out of hours payments)
- Administative support
Other direct costs
- Recruitment costs (e.g. advertising, promotional material)
- Travel and subsistence (AAs and co-ordinator, e.g. mileage, taxis late at night)
- Training and professional development (e.g. venues, accommodation, speaker expenses)
- Accreditation (where AAs will be obtaining the national qualification in acting as an AA)
- Vetting (i.e. DBS checks, note: police vetting is not appropriate as it bypasses the Rehabilitation of Offender Act 1972)
- Printing (e.g. PACE recording forms, reporting)
- Phone expenses (AAs and co-ordinator)
- IT, finance, human resources, legal, office management (this will be percentage of costs where an organisation delivers the scheme alongside other services)
- Website (for recruitment, complaints, public information etc.)
- Public liability insurance
- Membership of infrastructure / standards body (NAAN)
When developing an estimate of cost, developers may wish to consider:
- the benefits of developing a multi-year budget (e.g. 3 to 5 years)
- the importance of calculating on a full cost recovery basis, especially when moving from an internal model to a commissioned model (internal costs are often hard to identify as they are not reflected in distinct budget lines and this can give an inaccurate picture)
- the impact of initial start-up costs such as IT and communications infrastructure and recruitment
- the impact of TUPE considerations, particularly on the ability of smaller organisations (e.g. local charities) to bid for contracts
- the impact of managment information reporting requirements on admininstration and management time
- the costs of complying with freedom of information requests from third parties.
 Transfer of Undertakings (Protection of Employment) Regulations 2006" as amended by the "Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014".
Clearly a scheme that has high demands will have higher costs than one with low demands.
Longer periods of support, wider geographical areas, and higher numbers of cases, all drive costs up in different ways. Depending on the deliver model, this may be through hourly staff payments, travel expenses or recruitment and training costs.
Research suggests that the very lowest volume schemes are less likely to be the most cost effective (as judged by a low unit cost per call out). However, efficiencies of scale do not seem to increase above around 2,000 call outs per year. This may be due to the following factors:
- The continued requirement to for some level of local operation/co-ordination to enable the effective recruitment, training and operation of AAs necessary to achieve response times (and maintain the engagement of volunteers where they are used);
- Significant on-going investment in management and administration (partnership development, performance management and other reporting requirements, information-sharing and any changes at the local level which impact the service;
- Under a commissioning model, as the size of scheme increases there is a reduction in competition because the pool of potential providers decreases.
At the same time, some small schemes appear to be efficient, while and some larger ones are not.
It should be noted that, while the costs of commissioned schemes are relatively transparent, data on in-house schemes is dependent on self-reporting and may not equate to full cost recovery.
A thorough approach to assessing demand in the early stages of development will help developers to consider the impact on costs in the local context.
Although some broad observations can be made about how different models of provision affect cost, this should always be considered in the local context.
On the key decision between in-house and commissioned provision, a significant challenge is transparency. The cost to commissioners of existing outsourced schemes are relatively easy to identify, since they are based on a specified maximum contract value which is in the public domain. However, the costs of in-house schemes are less transparent. Local scheme leaders are often not aware of the true value of the work under full-cost recovery (i.e. including a share of overheads in addition to direct staff time and volunteer expenses). It would therefore be easy to underestimate the costs of an existing in-house scheme.
Another consideration is fixed-price contracting versus the spot-purchased or ‘pay as you go’ approach offered by some providers. The main advantage of paying only for those AAs that are needed is that there is a potential for savings if volumes are lower than expected – for example if fewer children are arrested. However, this approach also comes with risks for the commissioner: -
- Volumes may be higher than expected due to changes in policy (e.g. the inclusion of 17 year olds from 2013)
- Volumes may be higher than expected due to increases in identification (e.g. the development of liaison and diversion screening and assessment services)
- If volumes increase significantly, the budget may be used up before the end of the funding period, leaving the area with no service
- As only a limited number of providers will operate on this basis, the pool of potential bidders is smaller.
Scheme developers / commissioners may also wish to compare the cost of new schemes with that of improving or expanding existing schemes. Options include: -
- Expanding services for one group to include the other (e.g. adding adults services to an existing YOT scheme)
- Combining across two or more local authorities
- Extending the operating hours of an existing scheme (e.g. by investing in an on-call sessional worker to cover out of hours)
When considering merging schemes, the costs, risks and disadvantages should also be considered in addition to the potential benefits.
Decisions about the quality of service which is to be provided will clearly have an impact on costs. Factors include: -
- High quality leadership and supervision, with a dedicated co-ordinator role
- Backup arrangements (e.g. paid staff where there is a gap in a volunteer rota)
- Appropriate administrative support
- Level of involvement in information sharing and other local partnership work
- High quality training (both initially and ongoing professional development)
- Investment in accredited qualifications for AAs
- Extended hours of operation
- Quick response times
- Attendance for full custody episodes
- High quality evaluation with a focus on outcome (not simply output data)
Developers/commissioners will need to consider how high quality services and outcomes can achieved in the most effective way. This should include consideration of the potential for efficiencies of scale and the benefits of standardisation and co-ordination.
However, it should not be assumed that larger services are necessarily more efficient. Consideration should also be given to the efficiencies that can arise from smaller, local schemes which have strong interpersonal relationships with staff in other services.