Agenda item

Mark Scarrott, Service Accountant (Adult Services) presented the submitted report which provided a financial forecast for the Adult Services Department within the Neighbourhoods and Adult Services Directorate to the end of March 2009 based on actual income and expenditure to the end of October 2008.

The approved net revenue budget for 2008/09 was £68.5m which included funding for demographic and existing budget pressures together with a number of efficiency savings identified through the 2008/09 budget setting process. 

The report showed that there were budget pressures, with a projected net overspend of £262,000 (+0.38%), to the year end, after factoring in a number of management actions to mitigate these pressures.

The latest year end projections showed there were the following main budget pressures:-

• Direct Payments (£186k), within Physical and Sensory Disabilities and Mental Health services.  Performance was on track to exceed the target which if achieved would lever £360k in Performance Reward Grant funding for the Council in March 2009
• Additional unforeseen placements into residential care for clients with Physical and Sensory Disabilities (£145k: a net increase of 7 placements)
• Overspends within employees budgets (£260k) including increased use of in-house residential care bank staff and an overspend within domiciliary care management and administration teams over and above budget
• Pressures had also been identified in respect of increased energy costs (£194k) within residential and day centres.  The increase in energy costs was being monitored across all directorates within the Council.
• The above pressures were being partially offset by additional income from continuing health care placements (£523k)

The latest financial forecast assumed the full savings identified in the budget setting process for 2008/09 in respect of shifting the balance of home care provision from in-house to the independent sector.  The implementation of this was currently experiencing delays due to further consultation and negotiation with the Trade Unions and employees.  It was likely that these delays would increase the forecast overspend.  This was being monitored closely and further work was being undertaken to both quantify and minimise any additional pressure on the budget.

The report also assumed full decommissioning of the five residential care homes into the two new homes by the end of December in accordance with the planned timetable.  Any delays would impact on current financial projections and any further impact on budget would be reported as soon as they were identified.

Budget clinics with Service Directors and managers were now taking place on a monthly basis to monitor financial performance against approved budget and to consider further options for managing expenditure within budget.

A question and answer session ensued and the following issues were discussed:-

• The delays in the implementation of “shifting the balance” were partly due to high sickness levels within Home Care which was resulting in an increase in the level of overtime and therefore putting further pressure on the budget. Members were concerned about this and asked what had been done to overcome this problem.  A request was made for a report to be presented to a future meeting of the Cabinet Member and also to Scrutiny to update members on progress made.
• It was felt that the overspend in relation to physical and sensory disability was an ongoing problem and a query was raised as to whether any forward planning was being undertaken to overcome this.  It was confirmed that work was being carried out jointly with NHS Rotherham to forecast future demographic pressures and build these into the Medium Term Financial Strategy.
• Concerns were raised that more emphasis was being put on Performance Indicators instead of what was more beneficial for the service user. 

Resolved:- (1) That the latest financial projection against budget for the year based on actual income and expenditure to the end of October 2008 be noted.

(2)  That a report in relation to work being undertaken on reducing sickness levels be presented to a future meeting of the Cabinet Member and the Scrutiny Panel for Adult Services and Health.