Social work’s new regulator will cost millions. Who will foot the bill?

Shocked by the government’s announcement that social work will get a new regulator? You weren’t alone.

Even the Health and Care Professions Council (HCPC) got little notice of ministers’ plans to transfer responsibility for social work regulation to a newly created professional standards body – it was “very surprised” by the move.

You can understand why. Just six years ago the government endorsed the then Health Professions Council for this role. Back then officials were defending the decision to scrap the General Social Care Council (GSCC), a dedicated social work regulator, and give the HPC responsibility for regulating the more than 80,000 social workers in England.

The GSCC was “surprised” by the move (in an eerily similar statement to the HCPC’s reaction to the latest changes). Here’s how the government justified it:

“The government is confident that HPC is well placed to take on the regulation of social workers and that this option will be best in the long-term for the public, social workers and their employers by delivering independent and sustainable regulation.”

“This will bring benefits to taxpayers and the public in England by making the regulation of social workers financially and operationally independent of government.”

Self-funding regulation

The decision was unpopular with social workers. The HPC was a health regulator for 15 smaller professional groups, including physios, chiropodists and dietitians. There were concerns it lacked the necessary social work expertise for its new task (ironically some feel that expertise has now been built up just as the organisation is to lose its social work remit).

Ministers pointed to the establishment of The College of Social Work as proof social work expertise would be driving professional standards, working in tandem with the HPC’s regulation.

The government’s prime concern was ensuring social work regulation became self-funding. The GSCC had relied on Department of Health grants, worth around £20m a year. The coalition, looking to dramatically reduce public spending, would turn off the funding tap.

The bonfire of the quangos

Options were drawn up for a financially independent regulator. If the GSCC was to become self-financing it would need to raise registration fees from £30 to at least £235, the government’s impact assessment said. Meanwhile as a multi-profession regulator, the HPC could provide “economies of scale” to fully finance regulation by charging social workers £76 per year.

The GSCC was duly thrown onto David Cameron’s bonfire of the quangos. Its regulatory duties were passed to the HPC in July 2012. The organisation was renamed the HCPC to reflect its broader remit.

The costs of closing GSCC

The government estimated the move would cost £11.7m. The true burden proved higher. An analysis of accounts shows the Department of Health paid out £17.6m closing the GSCC, including absorbing a £13.4m pension liability. Another £1.6m was paid to the HPC to help it prepare for the transfer. This included £109,000 to cover the costs of renaming it HCPC.

Now, with this month’s announcement, many feel ministers are effectively proposing a u-turn. However, the government told Community Care this isn’t the case. The new body “will have a wider remit than either the GSCC or HCPC”, a spokesperson said.

A key difference, they added, is that the new body will have a far greater focus on post-qualifying training, accreditation and continuing professional development. The chief social workers for both children and adults see this as a positive step forward for the profession and a chance to boost opportunities for career development.

The College of Social Work was once earmarked to take on this sort of post-qualifying work. However, ministers withdrew support last year after the organisation’s disastrous financial decisions left it on the brink of insolvency.

The government agreed to stump up a £250,000 bail out to allow The College to close in an orderly way. It shut last September, five years after the government committed £5m in ‘seed funding’ to get it off the ground.

What will the new organisation cost?

So how much will the new body being promised by ministers cost? At this point the government won’t say.

Experts with experience of regulation told us their best estimate would be at least £15m. Another indicator is the cost of social work regulation in other countries.

The Scottish Social Services Council, costs around £13m a year and The Welsh Care Council about £10m a year. Both organisations have different remits to what the government is looking for in England but they also regulate smaller workforces.

In England, the HCPC’s regulation is totally funded through registration fee income. For social workers this amounted to £7.1m last year. That alone looks unlikely to be enough to cover the costs of the type of body the government wants to create.

Who will fund it?

Which raises the question of who will fill the funding gap? The Scottish and Welsh governments provide the majority of funding for their social work regulators (their registration fees remain at £30 per social worker). It’s unlikely the English government will follow suit.

One clue comes from the Treasury’s guidance for departments introducing new ‘charge-bearing’ services. This says the standard approach should be to set fees that allow for ‘full cost recovery’ – financial independence from government.

Remember the government estimated a self-funding GSCC would have to charge social workers at least £235 to register. Remember also that the government says the new body will have a “wider remit” than the GSCC or the HCPC.

The graph below shows how the HCPC fees stack up against other single profession regulators (the acronym list can be found here). These ‘economies of scale’ won’t be available to the new body.

Source:HCPC

Registration fees

So will social workers see a hike in their registration fees? The government said it doesn’t “anticipate any immediate changes.” Immediate changes aren’t the concern. There is, after all, no new body in place yet. The question will be whether fee rises are inevitable once the organisation takes shape and takes on regulation.

Government funding cannot be ruled out. Treasury guidance does allow for departments to propose ‘variances’. For example, it could agree a 30% public subsidy to go on top of registration fee income. This would be a significant departure from the Conservatives’ wider public spending approach, and a volte face from the insistence that regulation should be financially independent.

A third option might be to strike some kind of funding deal with social work employers but that could prove a tough sell to local authorities already struggling to balance the books after years of spending cuts.

Since the plans for a new social work body were announced, many have asked why one is needed. The short answer is that social work has become a government priority. The Prime Minister has made reforming children’s social work a defining mission of his second term as prime minister.

The “comprehensive” programme of reform will deliver highly qualified and effective social workers, the government spokesperson said.

“Now is the right time to establish regulatory arrangements which will support these ambitions…We will be engaging with the sector to help us develop the best possible model of regulation and will provide more details shortly.”

Watch this space.