|Client:||Welsh Government and Minister for Public Services|
|Project:||Management Charges within Supporting People Service Provision|
|Year:||2014 – 2015|
|Team:||Clive Grace, Mike Bennett and Liam Whittington|
Due to the severe downward pressure on Welsh Government revenue budgets, Supporting People budgets faced average reductions of 7.6% in 2015/16. This made it even more important that as much resource as possible is directed to front line service delivery, and that costs such as management charges are minimised.
The research approach deployed a mix of research methods including both qualitative and quantitative techniques and involved analysis of primary and secondary data. The range of techniques were designed to maximise engagement with the different target groups.
The report includes case studies of both local authorities and providers. The case studies demonstrate the wide variety of practice which exists in relation to management charges in the Supporting People Programme on the part of both local authorities and providers. They also show that there is a general lack of clarity on the part of many of those involved. The case studies also demonstrate that there is good practice as well. Some local authorities and some providers are thinking through the issues, and focusing on how to minimise management charges, and to ensure that they are calculated on a fair and transparent basis.
The evidence indicates that very few surpluses are generated from Supporting People grant funding, either through high management charges or otherwise. In the rare case that a surplus is generated on a project, it is used either to contribute to the funding of the project the following year, or to cross subsidise other Supporting People initiatives.
The diversity with which local authorities and service providers define and approach management charges has a commensurate impact on the proportion of Supporting People funding used. This research found project charges ranging from 1.4% to 37% at the extreme ends of the spectrum.
Based on the findings of this research project, we proposed a series of design principles for the management charges regime in the Supporting People Programme.
This included a proposed definition of what should be included in management charges; that the Welsh Government set a maximum cap limit that management charges should be not greater than 10% of the net grant to a provider; and that this cap should operate on the principle of ‘comply or explain’ so that it combines transparency and clarity with a degree of flexibility.