Agenda item

This report sets out the budget proposals for the services covered by these Policy and Accountability Committees (PAC). An update is also provided on any proposed changes in fees and charges in the budget.

Corporate Overview

Emily Hill provided a corporate overview of the council’s Medium Term Financial Strategy (MTFS).  It was clarified that Appendix 4 fees and charges was not relevant to the report as this referenced fees and charges determined outside of the council’s policy which was, for both adult social care and children’s services, to freeze these without exception.  Setting out the overall financial context it was explained that the Department for Communities and Local Government (DCLG) had for the past ten years advocated for austerity with a challenging reduction in revenue funding.  Core spending power for revenue activities had seen a slight increase of 4.5% compared to 2010/11 but the current financial position was significantly worse in real terms. 

The council needed to make significant savings whilst concurrently managing a growth in budget for demand led services in Social Care and Children’s Services.  This has been difficult and required a draw on reserves for funding unexpected levels of demand and a corresponding reduction in the level of reserves which also needed to be maintained as a safety buffer.  It was noted that a fees and charges compensation scheme would partly fund council tax and business rate losses, with local authorities meeting the first 5% followed by 75p in the pound there after.  The remainder would need to be met by the council. 

The economic impact of Covid-19 highlighted a significant reduction in business rates currently expected in the future which represented a funding risk to the council.  A Covid specific six-month contingency budget was in place to address the level of associated risk which had also been increased to reflect this.

Children’s Services

Jacqui McShannon outlined how the council’s ambitious plan for Children’s Services (CHS) would be underpinned by high aspirations for the borough’s children offering protection from harm, abuse and exploitation, and be supported in their learning with equitable access to education.  CHS was a highly regulated, demand led service and Jacqui McShannon commended the work of community partners. The current uncertainty, historic and current budget pressures meant that the service was having to meet increased complexity of need with higher numbers of adolescents at risk.  About 1300 children were supported through social care with a range of needs including 100-50 with complex high needs and who also required a protection plan.

Tony Burton provided a breakdown of the allocations which included in excess of £46 million as the general fund budget within services for children (including children with disabilities) and young people and education. The overall income budget was just under £95 million which included £48 million of the delegated maintained and special school grant budget. Within this, the high needs special grant would be significantly increased at £26 million.  There would be an allocation of £16 million for early years learning with a targeted offer funnelled through nurseries, schools and child minders.  The key focus was to protect frontline services with cost reductions predicated on achieving high quality, value for money services.  Cost pressures included non-placement expenditure and transport costs specifically linked to social care.  There was also significant legal expenditure which was vital to protect vulnerable children through legal proceedings.

Councillor Alexandra Sanderson enquired if the borough would be fully compensated for financial loss linked to Covid and whether this had been paid by the government.  Emily Hill explained that given the ongoing impact of Covid it was difficult to forecast the total of Covid related expenditure and how this might be met.  A ringfenced emergency grant had been received in four tranches and additional Covid grants would be tracked and monitored.  In addition, a potential £4.5 million loss on council tax was expected but 75% of this would be covered centrally.  The position would continue to be monitored but it was unlikely that incurred losses would be fully funded. In response to a follow up question it was explained that the impact of the levelling up policy on finance was unknown, but it was likely that funding would move away from inner London.  Government spending had been significant and there would have to be some consideration of financial losses being recouped through any future funding mechanisms for local government.

Emily Hill clarified that ‘increased net borrowing’ referred to in the report was the cost of borrowing and separate from the financial return on investments which had been very low or almost negative. The expectation had been that more would be borrowed if the council undertook regeneration and development schemes and that the low interest rate would have an impact. It was confirmed that the cost of holiday and free school meals was being fully met through grants provided covering specific activities like this. Jacqui McShannon confirmed that the cost of meals provided during half term was also being fully covered.  There had been significant half term and Easter holiday provision for approximately 4000 families and CHS had worked with schools to distribute food vouchers. Measures were in place to secure future and contingency vouchers should these be required.

Councillor Sanderson commented on the achievement of saving £400,000 on care leaver placements through in borough placements and sought further details. The initiative was led by Beverly Sharpe and co-ordinated with colleagues in housing to secure in-borough, refurbished accommodation for care leavers where they would also receive better quality support. Approximately 20 young people had been placed with a further 35 that could be offered placements in future. CHS was also working closely with colleagues from the Economy Department to transition young people when appropriate into their own tenancies which had also contributed to efficiencies. Most care leavers wanted to return to their home authority from out of borough spot purchased placements.

Councillor Loveday commented referenced historic and repeated overspends within the CHS budget however it was acknowledged the amount of overspend this year had been significantly reduced.  Jacqui McShannon confirmed an overspend of approximately £750,000 on the high needs block which represented a considerable reduction.  It was clarified that an agreement to address an overspend of £15 million from reserves over a five-year period was now in its third year.  Emily Hill explained that there were currently ongoing national discussions about high needs block funding and recently introduced regulations which prevented such funding to be sourced from the general fund.  The advice from auditors was to ensure that reserves were set aside as a contingency plan to fund the deficit to date and included within the financial forecast.  Significant work had been undertaken to ensure that spending fell within the annual allocation which was close to being achieved within the next financial year.

Tony Burton outlined the overall strategy to control the historic deficit which had developed in the previous financial years to address budget pressures through commissioning and best practice reviews.  Value for money spending combined with growth around travel care and support of non-placement care expenditure were contributory factors.  It was expected that next year’s budget would be broadly balanced by considering demand management, early years intervention, appropriate contracts and timely needs assessment, together with workforce redesign to deploy services more efficiently to ensure a significantly reduced spend.

Councillor Loveday referred to the minutes in which the previous borough director of children and education services had reportedly outlined development plans to rebuild schools to help manage wider education finance proposals.  Councillor Loveday noted that these were not contained within the current MTFS for CHS.  Emily Hill acknowledged that there had been concern about the cumulative deficit from the high needs funding block and that some compensation might have been achievable through a schools rebuild programme and any capital receipts generated. As the policy had developed however, other more viable options were presented.

Councillor Holder invited a parent governor co-optee, Nandini Ganesh, to put her question to officers which highlighted the need for independent travel training support and why this was not proactively supported. Jacqui McShannon concurred with the known benefits of this approach and confirmed that this provision was in place with the recruitment of independent travel advisors, confirming the council’s commitment to ensuring quality support services for vulnerable children with complex needs.

Social Care

Lisa Redfern outlined that the departments overall vision to support residents in remaining independent and to support people with disabilities through the independent living strategy.  Significant achievements included no social care discharges however, the ongoing difficulties around how social care should be funded remained unresolved. The financial impact of Covid was considerable and had made it harder to achieve savings for a demand led service.  This was expected to grow as the number of those discharged from hospital increased, combined with the accelerated cost of care and the council’s commitment to pay the London living wage to contractors and sub-contractors.

Social care highlights achievements also included free home care, together with subsidised meals on wheels charged at £2, and no increase in careline charges, which were significant given the current economic climate. The department’s response to Covid had been highly commended and recognised as an exemplar of good practice when the borough’s care homes were closed to protect vulnerable residents.  There had been innovative infection control led by Dr Nicola Lang, care home and home care staff were offered financial support to encourage wide ranging testing, and the council procured and freely distributed in excess of 2 million pieces of personal protective equipment to care workers and frontline staff.  The quality of care was improved and there had been close working with providers, combined with early and rapid problem solving deploying high quality management tools such as dashboards and timely reviews.

Positive feedback from government, the former chief executive of Public Health England, Duncan Selbie and residents had increased fourfold since April 2020.  An integrated management approach had helped to deliver a balanced budget, despite significant and deeply challenging circumstances. Care home fluctuations had resulted in a steep downward trend attributable to Covid however, it was anticipated that this would increase following improved infection control. The service was continuing to see greater acuity of need with people being discharged with more complex care needs and there were increased costs concurrent with this.  The level of complex care and support needed for those with long Covid was unknown but high acuity of need corresponded to high cost.  Prakash Daryanani provided a brief trend analysis and highlighted areas of resilience, spend variation, and care home placement costs which had decreased between 2020 and 2021. Despite the impact of Covid there had been improved activity and systems management.

Councillor Lloyd-Harris commended the innovative approach led by senior officers and the way in which had protected the borough’s most vulnerable residents.  Despite the decision to sustain vulnerable residents through free home care, subsidised meals on wheels and careline, she asked whether the council had reached a point where this could no longer be considered sustainable.  Lisa Redfern responded that considerable work had been undertaken to improve the quality of operational systems and how these were managed through the implementation of policy.  The primary focus was to maintain targeted support for those who needed care and to undertake effective and timely reviews to sustain this focused delivery.  Councillor Coleman observed that there were better ways to achieve a reduction in costs without a corresponding reduction in services and that there were currently no plans to increase services but to continue to deliver these through an innovative and creative approach to service design and delivery.

Victoria Brignell asked if the independent living fund was abolished and the funding passed to councils directly, would this be passported to recipients and sought an assurance that the council would not end this provision.  It was acknowledged that this was currently unknown as there was no decision yet as to whether the fund would be extended beyond 2021/22.  There was an assurance that the current political administration had no intention to end the fund as it enabled people to live independent and fulfilling lives.

Councillor Richardson thanked officers for the detailed presentations and overview of departmental budgets set within a corporate and national context.  Policy and accountability members valued the work of officers and proposals designed to deliver a strong and resilient budget framework in uniquely challenging and difficult times.

RESOLVED

That the Committee noted the report.