Proposed expenditure by strategic aim
|Strategic aims:||2019 cost (one year, £ million)||2020‑2022 total cost (three year, £ million)||2020‑2022 annual cost (average/year, £ million)|
|1||To operate a regulatory system which protects patients and is fair to registrants, while being cost-effective and proportionate; which begins with education, supports career-long learning, promotes high standards of care and professional conduct and is developed in the light of emerging evidence and experience.||£9.6||£31.7||£10.6|
|2||To work with the professions and our partners to ensure that patients and the public are able to raise concerns with the agency best placed to resolve them effectively and without unnecessary delay.||£1.7||£4.4||£1.5|
|3||To use evidence, research and evaluation to develop, deliver and embed a cost-effective and right-touch model for enforcement action.||£27.0||£75.4||£25.1|
|4||To maintain and develop the regulatory framework.||£1.4||£4.0||£1.3|
|5||To continue to develop an outcome-focused, high-performing and sustainable organisation.||£3.5||£7.5||£2.5|
Proportion of costs by strategic aims 2019 compared to 2020‑2022
How we developed these expenditure plans
Meeting the requirements of our fees policy
This consultation on our corporate strategy and the costs of delivering it is being undertaken in line with the commitments we made in our policy on fee charging, both in relation to how we calculate the fees we charge and how we explain that to registrants.
The fees policy sets out three key principles. For ease of reference, these principles and the explanation of them, have been reproduced here:
- Fee levels should be primarily determined by the cost of regulating each registrant group: we will seek to minimise the ways in which registrants fund regulatory activity that is not generated by them by removing, as far as practicable, cross subsidy between different groups. We will do this by allocating costs, as far as possible, where they fall. Where a degree of cross subsidy is necessary, we will explain this.
- The method of calculating fee levels should be clear: we will be open with registrants about how we allocate the income we receive from them and why, and provide sufficient information about cost drivers, giving them the opportunity to contribute to the debate. We will seek to show a clearer link between fee income and regulatory activity.
- Supporting certainty for registrants and the workability of the regulatory framework: we need to make sure that decisions on the allocation of costs do not lead to undesirable outcomes in the form of unacceptably high or variable costs for some groups of registrants. For example, in determining whether cross subsidy is necessary or desirable we will need to consider the impact on the volatility of fee levels (i.e. how much small changes in workload would cause the fee to change). This is likely to be of particular relevance to small registrant groups, where distribution of costs among small numbers of registrants, has the potential to give rise to significant levels of volatility (and therefore, uncertainty) and/or prohibitively high fees.
The exercise to determine expenditure and allocate it to dentists or DCPs is complex. We began by closely examining our expenditure - but simply looking at our existing spending is not enough. We have also developed new strategic aims and objectives and established what delivering them will cost. This required us to make certain assumptions, which we set out below.
Financial assumptions: expenditure
- We anticipate receiving around 1,500 fitness to practise concerns, annually, over the three-year period. This represents a stabilisation in the levels of incoming concerns following a period of reduction. It is important to understand that a reduction in the number of incoming cases does not necessarily translate into a directly corresponding reduction in cases reaching a hearing, which is where costs tend to be concentrated. Furthermore, the number of cases reaching hearing stage is not the only driver of cost; the complexity of cases is also a significant factor. Thus, the falling level of concerns reaching us will not automatically produce an equivalent fall in costs.
- The planned expenditure under each strategic aim covers the total expenditure. There is no expectation that any of the planned activity will be funded from reserves.
- The fees charged to registrants will include the cost of funding the activity over the three-year period and of maintaining our level of free reserves within the range specified in the Council’s reserves policy. Within that range, Council has assessed the level of free reserves necessary to ensure the GDC remains a viable organisation by 31 December 2022, to be equivalent to four and a half months of operating expenditure over the same period. This will be our planning assumption and is the level assessed by Council as delivering the necessary financial resilience.
- Our fees policy commits us to the introduction of application and assessment fees for applicants, in order to eliminate cross subsidy between registrants and applicants. The costs associated with first registration have been calculated separately, in line with this commitment.
- For the purposes of calculating the ARF, in line with the first principle of the fees policy, costs have been apportioned between the two registrant groups according to how they were generated (e.g. the cost of investigating fitness to practise matters generated by each group). Where it has not been possible to apportion costs directly in this way (for example, in relation to fixed costs like premises or communications activity), they have been apportioned in line with the 78/22 average across the whole of the GDC. The fee calculations incorporate no cross- subsidy between the two registrant groups of dentist and DCPs. However, as the DCP group comprises a number of discrete professions, some limited internal cross-subsidy between them is inherent.
Financial assumptions: income
- Our calculations have been based on the premise that registrant numbers will remain as they were in 2018. No increase or decrease has been incorporated into the projections. Therefore, we are assuming that income will not vary materially over the period.
What happens if our assumptions prove wrong?
- Should actual costs or income vary materially from the planning assumptions, this would constitute exceptional circumstances and we would deal with them as set out in the policy. Looking first to savings and reserves to meet the costs, and then, if absolutely necessary, revisiting the ARF.
What this means for ARF levels
- Our policy requires us to apportion costs to reflect the cost of regulation. In practice, the cost of regulating DCPs has increased since the ARF was last set. The impact of this, alongside the overall decrease in expenditure, points to a significant reduction in the dentist ARF, and a small increase to the DCP ARF, which would, however, remain more or less level in real terms (taking inflation into account).
- We cannot know the precise level of the ARFs until later in the year, when the professions, partners and the public have had their say on the strategy. However, our plans indicate that the dentist ARF would lie around the range of £730 to £750, and could be slightly lower, while the DCP fee would lie in the range £120 to £130. Our desire, and intention, is that the fee should lie at the bottom of these bands. However, until the strategy and the associated detailed planning is finalised, it would be misleading to guarantee this.