Bryan Dutton, Chief Executive

Hollow Lane, a specialist Leonard Cheshire service in Exeter, was developed from a partnership between education, health and social services, which had collectively identified a need for residential provision for the most demanding learning disabled children in Exeter and the wider Devon area.

A range of children had been identified who were living a long way from home and family or in inappropriate accommodation, resulting in spiralling staff injuries due to lack of specialist staff and training. The partners considered various options, including greater use of out-of-county placements (normally privately owned and high cost) but concluded that a small, properly staffed, local residential service near a specialist school was the ‘best value’ solution. Leonard Cheshire was one of the few providers willing to take on such a ‘highrisk’ service and gave a price within the tendering process for a given level of staffing.

Before proceeding the following methodology was developed:

• Leonard Cheshire would provide an open book approach to budgeting,showing how all costs were made up in as much detail as was wanted.
• A partnership monitoring group would be set up, with representation from health, social services, education and Leonard Cheshire. This group wouldmake a recommendation for an annual increase based on the children’s increasing/decreasing needs. The contract states ‘In the event that the staffing levels fail to meet the requirements ... the service purchaser agrees to amend the contract price’, and ‘The purchaser will be required to agree this recommended price increase unless it has reasonable grounds for believing that costs are increasing at a lower rate’. In practice, during the first year of operation the price has increased twice and this has been agreed.
• A risk schedule was developed. This states that the capital risk for the building cost would fall to Leonard Cheshire, but the revenue risk of operating the service would fall to the commissioners.

On this basis we found a site, built a specialist residential service, and recruited and trained staff. The service has now been open and running successfully for over a year.

A practical example of benefiting from detailed open book budgeting has been the staff sickness assumption. This was set at 4%, but the practical operation of the service found that this was too low, and so a higher level was funded. This very risk prone service, with a large number of cost variables, continues to flourish on the basis of this mature, open contracting basis. The acute nature of the need being met helps to ensure that all parties remain focused and work in partnership.