By Steve Cross
Managing the financial processes in adult social care is a complex task. Paper based records are labour intensive and inefficient with suppliers waiting long periods for payment. The situation is compounded by unreliable data making financial monitoring and planning extremely difficult. This was how it was in the London Borough of Hillingdon. The author describes how the situation was transformed by integrating the care process with the financial practice processes. The result was benefits to clients, suppliers and to the council.
The financial processes operated in Hillingdon could not be monitored satisfactorily and financial planning was undependable. The problem was unreliable data. It was this weakness of the system that prompted the improvement programme for finance and highlighted the need for an e-processing system.
The existing income and payment system was inefficient, labour intensive, and paper-based. Clients were inadequately assisted in terms of the advice provided on amounts payable. Payment was also poor, and we were aware that suppliers often submitted invoices more in hope than expectation. Because we already used CareFirst, a case management system for children’s and adult services from OLM Group we decided to build on this system and develop our finance processes.
Managing social care income and expenditure
Using the financial management modules within CareFirst and supplementary bespoke data-tools it became possible to improve the management of social care income and expenditure across the London Borough of Hillingdon.
We now have a clear view of best practice. By integrating the care process with the financial practice processes, we have significantly reduced paper chasing, unnecessary duplication and inefficiencies that impair effective care planning. We have experienced quite a turnaround.
The commitment from key finance and care management staff within the Borough to ensure success was exemplary, and without such commitment these achievements would not have been possible.
Following implementation of CareFirst, it has been possible to introduce particular initiatives and practices including payments for externally provided care, the creation of uniques purchase order agreement numbers and to pay residential care by schedule.
Commitment data is downloaded providing for the foundations of budget monitoring reports and forecasting models. The results for 2007/08 were exceptional with the final outturn being less than £200k from the Month 6 forecast across all adult social care procurement, a spend of £38m.
Securing significant financial gains
Through fully e-enabling the payment and invoice systems, substantial savings have been secured for our residents, suppliers, and the council.
For our residents, the solution has ensured that social care clients are aware of any change to their financial contribution in March / April and this is reflected on the first billing run. Additionally this approach has freed up staff time, facilitating the joint DWP financial assessment team to provide an increased focus on welfare benefits take-up. In its first full year following implementation, the joint team successfully identified and delivered almost £3 million of unclaimed benefits for some 2,200 residents.
The benefits for suppliers were immediate. They received improved cash flow to their businesses and quicker resolutions to differences between the respective client records. All social care payments are now made via the solution which for 2007/08 resulted in 92% of 65,269 invoices being received electronically with 99% paid on time.
We have received many compliments from our suppliers since these changes came into effect and there is no doubt that our relationship with key contacts have improved significantly. As a result of this improvement we believe we now have an edge over other local authorities whose payment services may not be as effective.
With all social care transactions now processed via this solution, the monthly commitments report is used with confidence for present year monitoring and future year planning. This helps with our financial management and consequently enhances budget planning. For instance, budgets which are volatile and demand led are instantly supported with timely management information to enable better planning of scarce resources. The final outturn for 2007/08 when compared with the mid year position reported as part of forecasting was exceptional. The modelling tool used forecast a spend of £38.2 million across all adult social care purchased services, this included a forecast for residential weeks of 51,426; the outturn was £38 million and 51,314 weeks.
In terms of financial benefits, the success of our modernisation project can be assessed by the increase in average income per person per week of 40 per cent for homecare and 23 per cent overall. Additionally, annual client income increased from £6.6 million in 2004/05 to £8.1 million in 2007/08. It was also possible to reduce the number of staff required to process invoices and payments, and this generated a saving of £125,000.
Exploiting further benefits
The solution that the London Borough of Hillingdon has implemented is designed to support not only existing needs but also provide a solid foundation for further advancement. The financial models will continue to evolve and be refined. We will also ensure that data quality through the entire system is maintained and continually reviewed.
Future development planned around the billing system to make it easier for clients. It will also encourage the small number of remaining suppliers to embrace electronic invoicing. One of the last pieces of the jigsaw is to develop the system to enable ECMS data to be passed electronically to our payments team to enable payment and client billing according to the actual time on site.
Through this implementation, a major area in the London Borough of Hillingdon has been revolutionised. It is true to say that when we initiated this project we were at the revolution stage and now we are at the evolution stage. From discussions with other authorities we believe we have a solution that is unique and has enormous potential.
Steve Cross is Head of Finance for Adult Social Care Health & Housing at The London Borough of Hillingdon.
OLM Group is an independent supplier of information solutions for children’s and adult services www.olmgroup.com