Option 2 is described in the statutory guidance to the Act as ‘an arrangement where the supported person selects the support that they wish and the authority or subsequently a provider acting under the person’s direction, makes the relevant…arrangements on the supported person’s behalf’.

Importantly Option 2 is distinct from Option 3. There are a range of ways to administer Option 2 but they should all aim to give people the maximum possible control and choice over their budget.

What does it mean for the person receiving support?

People who either can’t or don’t want to take a direct payment but do want a level of choice and control over what organisation provides their support can do so through an individual service fund (option 2).

What does it mean for the support provider?

Option 2 is a challenge to implement but it also gives providers and their local authority partners an opportunity to experiment with different approaches to maximising choice for supported people and working out flexible ways to contract for social care.

Option 2 highlights how the values and principles of SDS interact with other policy and practice drivers such as procurement, liability and risk, duty of care and approaches to commissioning.

What are some of the challenges?

Local authorities are interpreting and implementing Option 2 in different ways with limited consistency around who can hold the budget and from which organisations can support be purchased.

Contracts can be over prescriptive

There are conflicting views between providers and some local authorities as to the impact procurement law has on the operation of Option 2.

Top tips

Option 2 contracts should be developed in partnership between the local authority, providers and supported people. The following are some tips to bear in mind during that process:

Develop contracts that don’t restrict flexibility Contracts should recognise that flexibility of support is key to day-to-day choice for supported people and that the negotiations for this are best done between the person and the provider- not specified in an overarching contract.

Develop contracts that don’t restrict creative support planning Contracts for Option 2 should guard against over specification of service. Outcomes based support can’t happen where outputs (tasks, activities, and times) are highly specified. The use of the ‘Essential service’ approach (where a segment of the Option 2 budget spend is controlled by the contracting authority) should be avoided.

Develop contracts that share cost, risk and liability Contracts which attempt to place business risk and liability on the outsourced provider do not encourage innovation and creativity. Contracts which place the financial burden for administration for Option 2 on the provider (while at the same time capping or restricting hourly rates/unit costs) create conditions which place outsourced providers at risk of going under (with consequent impact on service continuity and choice of support provider.)

Use Option 2 to encourage a range of providers and types of support

A low barrier, proportionately specified contract arrangement for Option 2 can help support a range of providers and types of support (s. 19 Social Care (Self-directed Support) Scotland Act). Contracting approaches should be checked against a market facilitation strategy/ commissioning strategy for the local area to make sure that the contracting approach doesn’t work against the aims and objectives of the commissioning plan.