27. april 2005
Journal nr. 3/1120-8901-1573/SEK/ACE
The Council meeting 27 April 2005
On the 27th April 2005, the Danish Competition Council decided that the local authority Aalborg Kommune only partly meets the Councils order issued 17th December 2003. In its decision from 2003, the Council decided that Aalborg Kommune should terminate the illegal aid that distorts the competition in regard to the private service providers of personal care and assistance (personal care) and assistance or support for necessary practical work in the home e.g. cleaning (practical work).
Under section 71 (1) of the Act on Social Services, the local authority is required to offer personal care and practical work. This service is to be given to persons who are unable to carry out the above mentioned activities.
Since January 1, 2003 this market has been open to private service providers. Persons who are assigned to such services are given a free choice of service provider. The local authority pays for the service. The local authority sets out price and quality requirements for the services and must enter into agreements with any private supplier that meets these requirements. If the price requirement is not set through a public procurement the local authority must calculate the price equivalent to the public provider’s own average costs of delivering one hour of personal and practical assistance. The calculated average cost is the price per delivered hour to be paid to all approved private providers.
The point of reference is that the price requirement must reflect the public provider’s actual and real costs by delivering one hour of service. The Competition Council stated in the decision of 17th December 2003, that it is an infringement of section 11a in the Danish Competition Act if the local authority doesn’t include all the public provider’s cost in the price or base the calculation on an undocumented high number of hours spent with the customer. In the specific case Aalborg Kommune had based the calculation on an undocumented - and unrealistic high - number of delivered hours and the Council therefore ordered Aalborg Kommune to document the number of delivered hours.
According to the legislation on social service the local authorities can document the number of de-livered hours by registering the time spent with the citizen or by carrying out a spot checking. To meet the Councils order of 17th December 2003 Aalborg Kommune chose to carry out a spot checking as a proof for the delivered hours with regard to the hours delivered on personal care and practical work. The spot checking concerning the delivered hours of personal assistance failed twice, and Aalborg Kommune has still not documented the price on personal care. The Council has therefore given Aalborg Kommune a time limit of three months to deliver the required documentation.
Aalborg Kommune has carried out a spot checking on practical work. However, the Competition Council has stated that the spot checking wasn’t representative and consistent with the guidelines with regard to size. The Council nevertheless decided to accept it with reference to the fact that there were no guidelines for carrying out spot checkings at the time Aalborg Kommune carried out the spot checking. The decision must also be viewed in the light of the fact that Aalborg Kommune according to the law soon must carry out a new spot checking.
The Council also found that the spot checking appeared to be full of mistakes. For instance some of the workers delivered considerably more hours than they were paid for. The mistakes affected the price both upwards and downwards, and the Council found that it was a coincidence that the spot checking showed the correct price, when the mistakes were corrected.