Agenda item

Cabinet Portfolio:                 Corporate Services and Finance

Strategic Directorate:           Finance and Customer Services 

To receive the financial monitoring report covering the period to the end of May 2018.

Consideration was given to a report which set out the financial position at the end of May 2018 and was based on actual costs and income for the first two months of 2018/19 and forecast for the remainder of the financial year. Members noted that financial performance was a key element within the assessment of the Council’s overall performance framework, and was essential to achievement of the objectives within the Council’s policy agenda. To that end, the May Financial Monitoring Report was the first in a series of monitoring reports for the new financial year which would continue to be brought forward to Members on a regular basis.

It was reported that, as at May 2018, the Council had a forecast year-end overspend of £5.8m on the General Fund, after taking account of the £10m budget contingency approved within the 2018/19 budget and the actions underway to address budget pressures, particularly in Children’s and Adult’s social care. Members noted that the Children’s and Young People’s Services Directorate continued to overspend against budget in 2018/19. Due to demand for services outstripping budget capacity the number of children in care had increased in the financial year, up 23.3% (from 509 to 628) since May 2017 This had been exacerbated by the number of high cost placements that had arisen from a combination of complex child protection cases and Operation Stovewood. This increase in the number of Looked after Children also placed significant pressure on Legal Services within the Finance and Customer Services Directorate. The current forecast overspend for Legal Services was £1.010m before mitigating actions.

It was further reported that Adult Care Services were forecasting an overall overspend of £6.221m. Residential and Nursing Care budgets across all client groups were under pressure due to a combination of increased client numbers, the rising cost of care packages, and delays in delivery of savings plans. A recovery plan had been developed to address previously undelivered savings and project plans were being finalised with the expectation that further savings would be identified from that activity.

The Regeneration and Environment Directorate had forecasted a balanced budget, although it was facing challenges from a combination of declining business from the School Meals service, losses on PFI contracts, and challenges with delivery of budget savings. Management activity was underway to identify areas of overspend and put mitigating measures in place, whilst maintaining service delivery.

Members were advised that the overall budget position would continue to be closely monitored with provision of regular updates. Within the 2018/19 budget, new savings of £15.2m were required to achieve a balanced budget. This was in addition to £6.5m of savings that were approved in prior years for delivery in 2018/19, making a total savings requirement of £21.7m. Progress in delivery of these savings was reflected in the forecast overspends and supporting narratives of the Directorates. Members noted that all savings were either on track or mitigating actions in place with the exception of savings in Adult Social Care and a small amount in Children & Young People’s Directorate. These positions were reflected in the financial monitoring forecast outturns and the Directorate narratives.

Following on from the debate on the previous agenda item, Members expressed frustration at the apparent lack of progress being made in resolving the challenges that leading to predicted overspends in social care services for children and adults. The Chair reflected on the work that the Board had undertaken in monitoring and challenging in respect of the budget in the previous two municipal years and was concerned that agreed plans were not being delivered. He reiterated the need for a deliverable financial plan and the importance of robust contingency arrangements. In response, it was confirmed that budget options for the next financial year, which would deal with the overspends and plans for savings in future years, were being considered presently and would be presented for scrutiny in October 2018

Members sought clarification in respect of potential budget pressures arising if Better Care funding ceased after 2020 and what contingencies had been planned for. In response it was confirmed that there would be an increase in Better Care Fund monies in 2019/20, however the Government had not confirmed its intentions beyond that time. As a follow up, Members queried the timescale for the recovery strategy for adult social care and when they could expect to see it relieving some of the budgetary pressures facing the service. In response, it was explained that plans were currently being put in place and the impact of this would be reported in the monthly financial update to Cabinet.

Noting that time was of the essence and the overspend position seemed to be drifting and accepting the increase in the number of Looked After Children and the pressure that had created, Members sought information in respect of the actions being taken to reduce spending in Children and Young People’s Services. In response, it was explained that the specific report on Children’s Services which was the next agenda item would explain the actions in more detail. Members noted that there were 646 children in care, which highlighted the incredible increase in demand faced by the service. Work was ongoing to look at reducing unit cost, where there had been an impact arising from previous work. It was explained that actions in respect of market management, reviewing the right care arrangement appropriate to the child and discharging children and young people into alternative settings at the appropriate time. It was confirmed that there were around 70 Looked After Children currently in out of authority placements.

Further assurances were sought in respect of spend on agency, interim and consultancy staff and whether a moratorium on recruitment would be implemented. In response, reference was made to the enhanced controls implemented through the Workforce Management Board, which had placed tighter restrictions on recruitment. A significant decrease in agency workers in Children and Young People’s Services had been realised in quarter 1 of the current year, alongside an overall reduction in the number of posts going to advert. In addition, directives on reducing spend by delaying or not renewing contracts were to be issued.  Responding to a further query in respect of the number of agency staff in Children and Young People’s Services, it was confirmed that there had been a steady reduction with 12.5% of the workforce consisting of agency staff, which compared to the national average of 16%. It was explained that there had been a number of reasons for the increase in use of agency staff, such as Operation Stovewood and the complex abuse inquiry, as well as preparations for the Ofsted inspection.

Clarification was sought in respect of the deferment of decisions in Children and Young People’s Services that would have delivered increased savings, such as Phase 2 of the restructuring of the Early Help service. It was confirmed that the deferral of the decision had been at the request of the Commissioner for Children’s Social Care. An explanation was also provided for the delay with the Business Support review and where that piece of work was currently.

Recommendations:-

1. That a group of OSMB Members be established to monitor in year spend.

2. That a monthly report on vacancy management be submitted to the group of OSMB Members

3. That consideration be given to building in adequate time for consultation when planning the implementation of budget savings to avoid delays in realising savings. when planning budget savings programme that build in time for adequate consultation to avoid savings being delayed.

4. That a breakdown detailing the spend within Children and Young People’s Services on the Complex Abuse Inquiry, staffing and the High Needs Block be provided to the group of OSMB Members