Archived decisions


	Hampshire County Council
	Executive Member Social Care	Item 1
	19July 2002
	Final Accounts 2001/02
	Report of the County Treasurer and the Director of Social Services

Contact: Gordon Shinn, ext 7526

1 Summary

1.1 The following decisions are sought:

1.1.1 That the final accounts for 2001/02 be approved.

1.1.2 That the Cabinet be requested to approve the carry forward of 50% of the 2001/02 underspending (£147,500) to 2002/03.

1.1.3 That the departmental assurance statement as set out in Appendix 7 be approved.

2 Reason(s)

2.1 To obtain approval to the final accounts for 2001/02 for Social Services.

2.2 To agree any requests to the Cabinet for approvals arriving from the final accounts.

2.3 To agree the departmental assurance statement.

3 Other options considered and rejected

3.1 Not applicable

4 Conflicts of Interest declared by the decision-maker or a member for officer consulted

4.1 Not applicable

5 Dispensation granted by the Standards Committee

5.1 Not applicable

6 Reason(s) for the matter being dealt with if urgent

6.1 Not applicable

Approved by: Date of decision:

Cllr Felicity Hindson


	Hampshire County Council
	Executive Member Social Care	Item 1
	19 July 2002
	Final Accounts 2001/02
	Report of the County Treasurer and the Director of Social Services

Contact: Gordon Shinn, ext 7526

1 Summary

1.1 This report summarises spending on Social Care in 2001/02.

1.2 It recommends that the final accounts for 2001/02 be approved and that £147,500 representing the Service's 50% share of the underspending be carried forward and added to the 2002/03 budget.

1.3 Overall there is a net underspending of £295,000 (0.2%) against the 2001/02 revenue cash limit of £179.4m.

1.4 The major variations are:

	£'000
Support Services and Management Costs	(1,591)
Children and Families	450
Adults with Physical Disabilities	459
Adults with Learning Disabilities	595

1.5 The County Council's policy is that 50% of any underspending should be added to the Service's budget in the following year. Cabinet decides what use should be made of the other 50%. It is proposed that any carry forward will be used to meet non-recurring commitments in 2002/03, for example the implementation of the social care information system. The total cost of the project is £4.9m, with funding streams identified of £3.1m, leaving a shortfall of £1.8m, to be met from the Social Services departmental budget. In addition to this the department will also be required to fund repayment of the £1.8m unsupported credit approval at the end of the local public service agreement, although the requirement for that is several years in the future.

1.6 On capital, schemes to the value of £1,325,000 started in the year and schemes to the value of £1,079,000 have been approved by Cabinet to be carried forward to start in 2002/03.

1.7 In total, this amounts to £473,000 less than the approved cash limit for the capital programme, the principal reasons outlined in the following paragraph.

There are additional balances of £133,000 (minor works allocation), £185,000 (furniture and equipment residential and day care allocation) and £16,000 (furniture and equipment in office bases). The value of the uncommitted information technology block allocation has increased from £124,000 to £263,000 in order to make provision for the Social Care Information System.

1.8 Further details on the main differences between the actual revenue expenditure and the revised budget for cash limited expenditure are given in Part A below while details of revenue expenditure that is not included in the cash limit are contained in the appendices at the end of the report. Part B deals with capital schemes. Part C explains the basis of the financial control assurance statement included as Appendix 7.

2 Part A - Revenue Expenditure under the Service's control

2.1 Revenue expenditure under the Service's direct control is subject to a cash limit. For 2001/02 the adjusted amount is £179.4m as set out in Appendix 1.

2.2 The final outturn was £295,000 less than the cash limit. The overall position is analysed in Appendices 2 and 3. Appendix 4 includes a more detailed statement of variations from the revised budget.

2.3 The underspend in 2001/02 compares with the outturns achieved in recent years as set out in the following table:


	Variations from Revised Budget
	£'000	%
1998/99	- 295	- 0.2
1999/00	725	0.5
2000/01	1,490	0.9
2001/02	- 295	- 0.2

The most significant elements within the total net underspending are explained in the following paragraphs. The figures relate to the net cost of services excluding Assessment and Care Management and Support Services and Management costs. This supplements the information provided in Appendix 4.

Children and Families (£450,000 (1.6%) overspend)

2.4 The Executive Member has received reports during 2001/02 highlighting the work being done to review non-county residential and foster care placements, to ensure that children are being looked after in the most appropriate placements.

2.5 Although the target for `returns' was not met, for the first time in five years there has been a net reduction in the numbers of such placements, 14 less as at 31 March 2002 compared with 31 March 2001. However, there was a £3m overspend on placements in 2000/01, and remains a significant budgetary pressure as a result of the continuation of that pressure with extension of existing placements and above inflation increases. The following table compares numbers at 31 March 2002 with those at 31 March 2001:


	31 March 2001	31 March 2002	Change
Looked after children.	948	942	-0.6%
Children on the child protection register.	436	451	+3.4%
Children in foster care
-in-house	512	549	+7.2%
-non-county	65	54	-16.9%
Children in residential non-county placements.	104	101	-2.8%

2.6 Whilst the department has made progress in reducing the number of children in residential care and the overall number of children looked after has reduced by 0.6% the budget for Looked After Children continues to overspend. This is for a number of reasons, including the underlying pressure on residential placements as reflected in the overspend in 2000/01. In addition the cost of new residential placements has exceeded the savings made on children returning from non-county residential placements because of general inflationary pressures and because of the increasingly complex requirements of the children being so placed.

Older people (£185,000 (0.3%) overspend)

2.7 Expenditure on older people services has increased by £7.6m (14.4%) compared with 2000/01. The main reasons for this are:

_ Ongoing costs of packages of care implemented in 2001/02 using `winter pressures' funding from the Government via health. A grant of £1.9m was received for this, which is estimated to cover approximately 50% of the costs.

_ Additional purchasing costs, in particular a 7% increase in the price paid for nursing home placements.

_ The Government provided a new grant (Building Care Capacity or `Cash for Change') aimed at minimising delays in transferring people out of hospital. This grant of £2.4m was effective from 1 October 2001.

2.8 The pattern of increasing numbers of clients placed in higher dependency, and more expensive, residential care continued in 2001/02, as the following table shows:

	Average Number 2000/01	Average Number 2001/02	Change
Residential Care	1202	1070	-11%
Very Dependent	1350	1475	+9%
Nursing Care	1318	1375	+4%

2.9 The main condition attaching to the Building Care Capacity grant was a target of a 25% reduction in delayed discharges from hospital. This was achieved by agreeing a plan with health partners, which included the following:

_ Targeted funding aimed at reducing the number of blocked beds e.g. rapid response services, priority discharge schemes

_ Extension of support schemes such as `welcome home' and carers' support

_ Residential provision - nursing home, residential home and `step down'

_ Development of intermediate care schemes

_ Intensive domiciliary care support

_ Provision of equipment and other aids to help people live more independently.

Adults with physical disabilities (£459,000 (3.7%) overspend)

2.10 The main pressures on this client group have been:

_ More complex and higher dependency clients

_ Young people moving through transitional age to adult services

_ Funding arrangements with health authorities

2.11 Although the total number of residential clients has remained fairly static approximately 5% of clients are new to the department. The trend is for these cases to be more complex and therefore more costly.

2.12 With regard to the funding arrangements with health there were differences in the ways in which the former health authorities were dealing with `continuing care' financial arrangements. Consultation with the Strategic Health Authority is proceeding in order to establish a framework of consistent application by each of the Primary Care Trusts.

Adults with learning disabilities (£595,000 (2.3%) overspend)

2.13 There are similar pressures to those with the physical disabilities budget described above. Although an overspend this position is an improvement on the outturn for 2000/01 (£2.6m overspend) and demonstrates a concerted effort to manage the pressures in this client group. This has been achieved to some extent by the addition of £0.9m in the original budget in order to meet the anticipated costs of 49 children moving into adult learning disabilities services during the year and the impact of Transitional Housing Benefit (THB).

2.14 There has been considerable work undertaken to attract as much THB as possible, as this reduces costs to the department. Although the target included in the original budget (£0.1m) has been exceeded by £0.6m, there have been hindrances to achieving the full potential, including:

_ Delays in housing benefit offices in approving THB claims, thus creating uncertainty about the amounts approved

_ Some providers have not submitted THB applications in a timely fashion, thus reducing the financial impact

_ Some providers have not notified the department when THB is approved

2.15 These issues are being addressed and it should be possible to achieve the £1m estimated benefit from THB allowed for in the 2002/03 budget.

3 Part B - Capital expenditure 2001/02

3.1 The outturn for 2001/02 is set out below with details of the total resources and details of the individual schemes started in the year appearing in Appendix 6.


	Locally Resourced Programme	Supported by Government Approvals	Total
	£'000	£'000	£'000

Total resources	2,180	697	2,877
Value of schemes started in 2001/02 1,028		297	1,325
Value of schemes carried forward 697 to 2002/03		400	1,079
Under commitment against 473 the cash limit			473

3.2 The total starts limit for 2001/02 amounted to £2.877 million and schemes to the value of £1.325 million were started in the year.

3.3 There have been some significant achievements in the course of the year including completion of the Grove Centre, a learning disability day service based in Kingsworthy, and the commencement of the modernisation of Havant day services for adults with learning disabilities. Also, the older persons' homes strategy, funded by Policy and Resources, has seen significant progress on the modernisation of Green Meadows in Denmead, Deeside in Basingstoke and Solent Mead in Lymington.

3.4 Schemes with a total value of £1.079 million, originally programmed to start in 2001/02, have been approved by the Cabinet to be carried forward to 2002/03. These are set out in Appendix 6.

3.5 The combined value of those schemes started and those approved to be carried forward to start in 2002/03 is £2.404 million, which is £473,000 less than the cash limit.

4 Part C - Departmental Assurance Statement

4.1 The Code of Practice on Local Authority Accounting with which the County Council's statement of accounts complies, introduces a new requirement from 2002/03 for the inclusion in the statement of account of an internal control statement, covering as a minimum the system of internal financial control. The statement sets out the framework within which financial control is managed and reviewed, including the arrangement for internal audit and reports on any identified weaknesses and the actions undertaken to rectify these.

4.2 It is proposed to introduce a statement of internal financial control in 2001/02's statement of account. As part of the process of enabling the County Treasurer to form a view on the effectiveness of internal financial control the Chief Internal Auditor has produced an independent assurance statement on the adequacy and effectiveness of the system of internal control in each department. Appendix 7 contains the statement relating to Social Services and concludes that there is an effective framework of control in place, although there is room for improvement in compliance in some areas.

Recommendations

1. That the final accounts for 2001/02 be approved.

2. That the Cabinet be requested to approve the carry forward of 50% of the 2001/02 underspending (£147,500) to 2002/03.

3. That the Cabinet be be requested to approve the carry forward to 2002/03 of £473,000 capital in addition to the £1,079,000 already agreed.

4. That the departmental assurance statement as set out in Appendix 7 be approved.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

None


Summaries of Actual Spending 2001/02
Appendix	Contents

1	Construction of the cash limit
2	Summary of revenue expenditure
3	Analysis of cash limited revenue expenditure over services
4	Major variations in cash limited expenditure
5	Revenue expenditure 2001/02 not included in the cash limit
6	Capital expenditure 2001/02
7	Departmental assurance statement

Appendix 1

Social Services

Revenue Expenditure 2001/02

Construction of Cash Limit


1	Revenue expenditure under the service's direct control was subject to a cash limit set by Cabinet of £180.6m. Business rates are an exception because the level of business rates on the County Council's own properties could not be determined precisely when the revenue budget was set. As a result of revaluations actual expenditure on rates is £9,000 higher than was provided for in the revised budget and the cash limit has been adjusted accordingly.
2	Further adjustments to the cash limit have also been made in respect of changes in government grant funding as detailed below:
		£'000
	Home workers	-2
	Training Support Programme	-129	Unable to claim full grant. Difficulty recruiting suitable backfill for students on D.I.P.S.W and P.Q. for Child Care courses.
	Substance Misuse	-16
	Asylum Seekers	-7
	Mental Health	118	Additional grant allocation from slippage.
	Invest to Save	-134	Some slippage on Social Services Direct. Grant to be carried forward to 2002/03.
	Youth Justice	-742	Grant to be carried forward to 2002/03.
	Information Systems	17
	Deferred Payments	-398	Late notification of conditions of grant. Unable to meet criteria.

3	The adjustments referred to above are incorporated in the table below which summarises the position for the service in the year:

				£'000	£'000
	Revised budget for 2001/02				180,666
	Increase for the higher level of business rates payable			9
	Variations in government grants			-1,293
	Additional inflation- IT Services			17
	Virement- Corporate Sustainability Project			3	-1,264
	Amended cash limit				179,402
	Net expenditure				179,107

	Net underspending against
	Service's controllable expenditure				295

Appendix 2

Social Services

Final Accounts 2001/02

Summary of Revenue Expenditure


		(1)	(2)	(3)
		Adjusted Revised Estimate	Actual 2001/02	Variation (Col 2-Col 1)
		£'000	£'000	£'000

Cash limited expenditure		179,402	179,107	-295

Capital Charges		6,465	6,464	-1

Other expenditure which is controlled centrally by Policy and Resources
-	Repair and maintenance of buildings	1,117	901	-216
-	Central support services	4,559	4,473	-86

Less:
Expenditure controlled by this service recharged to Policy and Resources:
-	Corporate and democratic core	29	25	4
-	Unapportionable overheads	434	506	-72
Government Grants
Home worker's Scheme		2	2	-
Training Support		609	609	-
AIDS/ HIV Support		115	115	-
Drugs and Alcohol		133	133	-
Asylum Seekers		443	443	-
Mental Health		2,464	2,464	-
Supporting people		333	333	-
Promoting Independence		5,723	5,723	-
Careers		1,367	1,367	-
Quality Protects		4,181	4,181	-
CAMHS		167	167	-
Invest to Save		277	277	-
Youth Justice Board		496	496	-
Information Systems		17	17	-
Building Care Capacity		2,436	2,436	-

Total Net Expenditure		172,317	171,651	-666


Reconciliation with total net expenditure in the budget book:

Net expenditure, (on page B77 of the budget book) 172,288
Adjustments
IT Charges-Supplement for higher pay costs 17
Virement to Social Services-Sustainability Strategy 3
Increase for higher level of business rates		9
		172,317

Appendix 3

Social Services

Revenue Expenditure 2001/02

Analysis of Cash Limited Expenditure over Services


		(1)	(2)	(3)
	Actual 2000/01	Adjusted Revised Estimate 2001/02	Actual 2001/02	Variation (Col 2 -Col 1)
	£'000	£'000	£'000	£'000

Cash limited expenditure

Service Strategy and Regulation	614	801	685	(116)

Children & Families
Commissioning and Social Work	7,467	6,441	6,602	161
Support Services and Management Costs	7,979	8,420	7,793	(627)
Children Looked After	17,708	16,262	18,337	2,075
Family Support Services	5,565	6,274	6,160	(114)
Youth Justice	1,843	2,018	1,802	(216)
Other Children's and Families Services	1,163	3,385	2,090	(1,295)
	41,725	42,800	42,784	(16)

Older People (Aged 65 or Over) including Older Mentally Ill
Assessment and Care Management	5,199	5,848	5,915	67
Support Services and Management Costs	7,113	8,023	7,802	(221)
Net costs of Services	52,614	60,006	60,191	185
	64,926	73,877	73,908	31

Adults under 65 years with Physical or Sensory Impairment
Assessment and Care Management	2,290	2,593	2,674	81
Support Services and Management Costs	1,958	2,349	2,083	(266)
Net cost of Services	11,664	12,408	12,867	459
	15,912	17,350	17,624	274

Adults under 65 years with Learning Disabilities
Assessment of Care Management	2,727	2,931	3,022	91
Support Services and Management Costs	2,291	2,740	2,430	(310)
Net cost of services	25,213	25,838	26,433	595
	30,231	31,509	31,885	376

Adults under 65 years with Mental Health needs
Assessment and Care Management	1,847	3,434	3,101	(333)
Support Services and Management Costs	1,029	1,402	1,276	(126)
Net cost of Services	6,212	4,642	4,899	257
	9,088	9,478	9,276	(202)

Other Adult Services
Assessment and Care Management	35	40	45	5
Support Services and Management Costs	394	637	601	(36)
Net cost of Services	1,515	1,239	1,057	(182)
	1,944	1,916	1,703	(213)

Supported Employment
Net cost of Services	266	885	810	(75)
	266	885	810	(75)

Asylum Seekers
Support Services and Management Costs	0	53	48	(5)
Net cost of Services	0	443	384	(59)
	0	496	432	(64)

Contingency / Grants	0	290	0	(290)

Net Cash Limited Expenditure	164,706	179,402	179,107	(295)

Appendix 4

Social Services

Revenue Expenditure 2001/02

Major variations in cash limited expenditure - under/overspending £

Budget Heading	Variation	Adjusted Revised Budget	Reason
	£'000	£'000

Support Services & Management Costs	-1,591	23,624	The £300,000 budget for staff relocation costs was not used due to the financial pressures on the department. Public liability insurance costs were £100,000 less than anticipated. The training budget underspent by £218,000 due to slippage' in the delivery of training courses. There was a further underspend of £58,000 on non grant funded staff backfill due to non availability of appropriate staff to cover those on training courses. The Registration & Inspection Unit achieved savings of £91,000. This resulted from a reduction in staff travel and an increase in fee income prior to transfer of this service to the National Care Standards Commission. Additional income was also achieved by undertaking some work on behalf of other agencies. Local Area Management teams have underspent on employee costs by £391,000. This was due to the difficulties in recruiting and vacancy management during the re-modelling process.
Children & Families	450	27,939	There continues to be a pressure to meet the needs of young people with very complex emotional, behavioural and physical difficulties. This has resulted in a £1.3 million overspend on external residential care, although the number of placements was 14 fewer than in the previous year. Of this total, £1.1 million was for children with disabilities and exceptional needs. In - house children's homes staffing overspent by £640,000. This was due mainly to the use of agency staff and overtime to cover absences and vacancies in this sector. The revised budget for Other services included £1.2m of grants allocated after the revised budget was set. These were subsequently allocated to Family Support Services and budgets for Looked After Children.
Older People (Aged 65 or Over) including Older Mentally Ill	185	60,006	The overspend occurred in the residential and day care sector. Recruitment difficulties in local authority units resulted in high use of agency staff. In addition, price increases, the transfer of high cost transitional clients with physical disabilities and capital depleters have all contributed to the overspend.
Adults under 65 years with Physical or Sensory Disability	459	12,408	The overspend includes £420,000 for the purchase of additional aids & equipment for people with disabilities and to fund new contracts with the Southampton and Portsmouth Joint Equipment Stores. These costs were covered by a transfer of Cash for Change funding.
Adults under 65 years with Learning Disabilities	595	25,838	The budget for day care was the area of most significant overspend. The focus on supported living opportunities, which continue to be developed, places pressure on this budget. The average number of care days provided in 2001/02 showed a 3.2% increase compared to the previous financial year.
Mental Health	257	4,642	There has been high demand for both residential and domiciliary services. In particular the number of clients assisted with domiciliary care has risen from an average of 297 in 2000/01 to 378 in 2001/02 (+27% ).
Other Adults	-182	1,239	A significant proportion of this underspend relates to substance misuse where there has been a 21% reduction in residential placements.

Appendix 5

Social Services

Revenue Expenditure 2001/02 not included in the Cash Limit

1	Capital charges (£6.5m)
	Capital charges are made to services for capital assets used in the provision of services. The actual charges are £1,000 less than the budget. This will have no direct effect upon the overall budget requirements of the County Council as the capital charges are replaced by actual financing costs in the central asset management revenue account.
2	Central support services, repairs and maintenance of buildings (£ 5.4m)
	These items are within the control of Policy and Resources. Support services are apportioned to services in accordance with the level of services provided and office accommodation occupied. Control of the budget for repairs and maintenance of buildings is by the nature of work and where it is most required rather than by service.
3	Corporate and democratic core (recharge £25,000) and unapportionable overheads (recharge £ 506,000)
	These items cover management and support costs that relate to member support and advice and to pension costs for added years and early retirements. They are within this service's control and so are charged against this committee's cash limit. But they are then recharged to Policy and Resources outside of the cash limit as the Best Value Accounting Code of Practice requires these to be excluded from the cost of services.

Appendix 6

Social Services

Capital Programme 2001/02


		Locally Resourced Programme	Supported by Government Approvals
		£'000	£'000
1	Construction of total resources
	Original programme limit per 2001/02 budget book 687
	Cash limit brought forward from 2001/02	1,043
	Supplementary Credit Approval		697
	Joint Finance	200
	2000/01 Capital Receipts	250

	Total resources:	2,180	697

2	Schemes started during 2001/02
	Havant Day Services - modernisation	450
	Winchester Learning Disability Resource Centre	221
	Minor Works in Residential and Day Care Premises 194
	Furniture and Equipment in Residential and DC Premises 119
	Furniture and Equipment in Office Bases	24
	Supported Housing	20
	Supplementary Credit Approval (MH)		297

	Total schemes started during 2001/02	1,028	297

3	Schemes carried forward
	Already approved by the Executive Member to start in 2002/03	679	400
	Other schemes to be recommended to the Cabinet to be carried forward to start in 2002/03
	Minor Works in Residential and Day Care Premises 133
	Furniture and Equipment in Residential and DC Premises 185
	Furniture and Equipment in Office Bases 16
	Information Technology Equipment	139

	Total	1,152	400

Appendix 7

Social Services

Departmental Assurance Statement

1	Introduction
1.1	The Accounts and Audit Regulation 1996 require the County Treasurer to maintain an adequate and effective internal audit.

1.2	The County Treasurer employs an in-house internal audit section to provide an independent and objective appraisal function of reviewing the system of internal control. It examines, evaluates and reports to Chief Officers and the County Treasurer on the adequacy of the internal control as a contribution to the proper economic, efficient and effective use of resources.

1.3	From 2002/03 The Code of Practice on Local Authority Accounting in the UK requires that the Chief Internal Auditor provides an independent opinion on the adequacy and effectiveness of the system of internal financial control operating in the County Council. The County Treasurer has sought to develop this for 2001/02 in preparation for the full requirement next year. To enable him to do this, an independent opinion on the adequacy and effectiveness of the system of internal control has been prepared for each department.

2	Responsibilities

2.1	It is a management responsibility to develop and maintain the internal control framework, and to ensure that resources are properly applied in the manner and on the activities intended. It is the responsibility of Internal Audit to form an independent opinion, based on reviews during the year, on the adequacy and effectiveness of the system of internal control.

3	Basis of opinion

3.1	The strategic and annual internal audit plans were prepared by the Chief Internal Auditor to take account of the characteristics and relative risks of the activities involved and were approved by the County Treasurer.

3.2	The internal audit plan has been delivered in accordance with the Auditing Practices Board's Guideline number 308, `Guidance for Internal Auditors'.

3.3	Work has been planned and performed so as to obtain all the information and explanations which were considered necessary in order to provide sufficient evidence to give reasonable assurance that the internal control system is operating effectively. However, this assurance can never be absolute. The most that the internal audit service can do is to provide reasonable assurance that there are no major weaknesses in the system of control.

4	Opinion

4.1	In our opinion Social Services has an effective framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of the department's objectives. However, audit testing has shown controls to be not working in some areas and further efforts should be made to reduce the risks identified by improving compliance.


	Chief Internal Auditor County Treasurer's Department Hampshire County Council

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