Contact: Gordon Shinn, ext 7526

Summary

1.1 The following decisions are sought:

1.1.1 That the actions to contain spending within the cash limit be approved.

1.1.2 That the Director of Social Services be asked to raise with the Social Services inspectorate the issue of accounting for Direct Payments within the performance indicators for domiciliary care and day care.

Reason(s)

1.2 The Cabinet requires budget monitoring reports to be considered by the Executive Member.

Other options considered and rejected

1.3 Not applicable

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

4.1 Not applicable

Dispensation granted by the Standards Committee

1.4 Not applicable

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

1.5 Not applicable

Approved by: Date of decision:

Cllr Felicity Hindson

Contact: Gordon Shinn, contact ext: 7526

1 Executive Summary

1.1 Pressures on the budget continue to be significant, although there has been an underlying reduction of £0.8m since the September position reported to the Executive Member in November. The position as at the end of December 2002 shows that a potential overspend of about £2.2m would be likely were corrective action not to continue to be taken.

1.2 The Cabinet has agreed to release up to £2m to Social Services to provide assistance to the health economy to help reduce the numbers of delayed discharges from hospital. As a result there are additional commitments of about £0.7m, which it is assumed for forecasting purposes will be claimable from that £2m. It is anticipated that all the £2m will be needed.

1.3 The target remains to achieve a balanced budget by the year-end. This remains a difficult but feasible target as management actions continue to bear down. Should there be an overspend then, given the £2m extra support this year and further support in next year's budget, this would not be written off but carried forward as a first charge on the 2003/04 cash limit increase.

1.4 Demand for services continues to increase across all client groups. Strategies to manage these demands are starting to impact but, in managing the budget, it inevitably means that some clients are not receiving services they would have expected or are waiting longer as cash limited sums are targeted on those most in need and on reducing delayed discharges.

2 Introduction

2.1 The analysis of the revenue position at 31 December indicates a pressure of £2.2m (1.1%), compared with £3.1m (1.5%) at 30 September and £3.6m (1.7%) at 31 July. Appendix 1 provides a summary of the figures by client group.

2.2 The cash limit has been adjusted for the additions agreed by the Policy and Resources Executive Member on October 16. These are:

· £2.5m in respect of additional inflation costs (approved as part of the 2002/03 budget setting but subject to verification), primarily for residential and nursing care

· £0.5m for additional pay costs, as a result of the agreed pay award.

2.3 The Cabinet has in addition agreed to release £2m to Social Services in order to assist in meeting targets for bed-blocking for the rest of 2002/03 and into 2003/04. This amount is not included within the cash limit as it will depend on verification of spend for this purpose at the year end.

2.4 The key actions that continue to be used in order to achieve a year-end spend within cash limit are:

· Close scrutiny of commitments

· Review of contracts to ensure they are being used as effectively as possible

· Joint working with health, including negotiation of funding arrangements

· Maximising the use of government grant funding, in particular identification of costs associated with the responsibility of managing former Preserved Rights Clients

· Pursuing the children's residential strategy to ensure benefits are realised as soon as possible

3 Client group comments

Children and Families

3.1 As previously reported to the Executive Member in September and November, the two main pressures are:

· Non-County placements. These are children placed in both external residential and independent sector foster care. The 2002/03 budget strategy includes a saving of £0.5m as part of the overall strategy to move children from residential care (both in-house and non-county) into foster care and other family support placements. However, the impact of this strategy has been slower than hoped. There has been a net increase of 38 placements (54 new ones offset by 16 `returns') at a net cost of £1.3m in 2002/03 as at 31 December 2002.

· The introduction of uniform rates of allowance for foster carers, which has proved difficult to fully implement. Total costs have also risen due to the increasing numbers.

3.2 Reviews of in-house and non-county placements are being done, with a number of children identified for whom more appropriate (and cheaper) placements should be made such as foster care.

3.3 In addition to the above, other measures being looked at in order to reduce costs include:

· Close control over the use of agency staff

· Income generation at Swanwick Lodge secure unit

· Review of contracts

· Review of grant-related expenditure

3.4 It is anticipated that the result of all these actions will result in the Children & Families service having an overspend of about £0.5m at the end of the year. This will be offset by savings on management and support services.

Older People

3.5 The three main significant issues giving rise to pressure of £0.9m are:

· the ongoing costs of the packages of care implemented in 2001/02 using `cash for change' funding from the Government via health: the commitments recur but this year's cash for change allocations are focused on new pressures.

· Increasing pressure on prices as turnover occurs (with new clients being paid at a higher rate than established clients) and increased levels of dependency (for clients needing to be reassessed to higher priced levels of care)

· Demand and activity. The numbers of independent sector placements are summarised below:

		Dec 2001	March 2002	Dec 2002
Residential-
	Ordinary	198	177	97
	Very Dependent	1486	1530	1527
Nursing Homes		1423	1438	1504
Domiciliary Care		3638	3706	3985

N.B Figures exclude new preserved rights clients

3.6 The above table shows that total residential care placements have reduced slightly over the last 9 months. However, there has been an increase of about 5% in the much more expensive nursing care placements although there has been a reduction from the August peak of 1,542.

3.7 Given the above pressures, and the need to manage the budget, the achievement of two key performance targets have been given greatest priority. These are:

· Reducing the number of social services responsibility clients awaiting discharge from hospital; and

· Increasing the number of people receiving intensive domiciliary care (PAF indicator C28)

Delayed Discharges

3.8 As actions continue to try and suppress activity to stay within budget, the demand from hospitals continues to increase. The latest figures (as defined by health) show the total number of delayed transfers within Hampshire at 63 above target, as detailed below:

	Target	Actual	Variance
2 September 2001 (SSI/DOH baseline)	n/a	221	n/a
31 March 2002	166	164	-2
2 February 2003	135	198	63
31 March 2003	125	n/a	n/a

3.9 In recognition of the increasing problem of delayed hospital discharges and the need to help local health authorities to provide as good a service as possible, the Cabinet has agreed to release up to £2m in 2002/03 and into 2003/04 to help alleviate the pressure. The expectation is that additional funding will enable the numbers of delayed discharges to be brought back on target at 31 March 2003.

3.10 The number of delayed discharges reached a peak of 235 on 19 January. Since that time over 200 packages of care have been agreed for clients awaiting hospital discharge. As at the beginning of January, commitments of about £750,000 in 2002/03 have been made since the Cabinet agreed the release of the additional funding. This figure is not included in the overall pressure of £2.2m at 31 December as it is assumed that it will be funded from the £2m detailed in paragraph 3.9.

3.11 The actual reduction in numbers counting as delayed discharges depends on a number of factors, in particular the throughput of clients and the availability of appropriate care. At the time of the release of the additional funding it was estimated that approximately 760 packages of care would need to be provided in order to bring the target number of delays down by about 75 - from 200 to 125 - at 31 March 2003.

3.12 The accounting for, and definition of, delayed discharges is still subject to debate and, details are not yet known of how any fining system will operate. However, Hampshire County Council has an agreement with local trusts in terms of accounting for delays of Social Services clients only. As at 2 February 2003 this figure was 122, as compared with the overall figure of 198 reported to the Department of Health.

Domiciliary Care

3.13 The total number of clients receiving domiciliary care provided by the independent sector has increased by 7.5% between the end of March 2002 and the end of December 2002. However, the number of clients receiving intensive domiciliary care (i.e. more than 10 hours plus at least 6 visits per week) remains well short of the Public Service Agreement (PSA) target. The target is 18 per 1000 over 65 years by 2004, with an interim target of 10 per 1000 in 2002/03. The current figure is about 6 per 1000.

3.14 This indicator is somewhat misleading as the Department of Health does not allow the inclusion of some relevant services, namely Direct Payments and day care. As one of the leading authorities in the provision of Direct Payments (about 600 users at a cost of about £4m per annum) the exclusion of this has a significant bearing on assessing comparative performance. It is estimated that the inclusion of both Direct Payments and day care would change the figure to about 15 per 1000.

Adults

3.15 This includes physical disabilities, learning disabilities and mental health, which combined show a net overall pressure of about £0.9m. Pressures continue from additional placements, particularly for learning disabilities. However, further work on maximising grant claims (particularly for former Preserved Rights clients) and transitional housing benefit continues and it is expected that this will be sufficient to achieve a balanced budget for the adults sector.

3.16 Following lengthy consultation with Health colleagues a new Continuing Care protocol was agreed by the Executive Member on 15 November 2002. This included the development of standardised assessment tools to support judgements in determining eligibility criteria for continuing care and the appeals procedures and proposed training. Following the introduction of this new toolkit the process of securing funding for clients with some health needs has become a lot clearer and this has resulted in quicker decision making. A report on the financial impact and monitoring arrangements will be submitted to the Executive Member in due course.

Preserved Rights

3.17 A detailed report was submitted to the Social Care Policy Review Committee meeting on 27 September 2002. A grant of £13.5m has been transferred to the County Council to cover the costs of clients who formerly received preserved rights. This includes Older People and Adults.

3.18 A considerable amount of work continues in order to ensure all clients are care managed and appropriate levels of care are provided and paid for. The grant also covers `additional costs' for arranging the care, assessing and monitoring. The total grant is considered to be sufficient to meet all direct care costs and associated additional costs.

3.19 Following completion of this work virements (budget transfers) will be made to the appropriate client group budgets. This will reduce the forecast overspends, particularly for Learning Disabilities services.

Fieldwork and Management and Support Services

3.20 Where possible fieldwork budgets are charged directly to client groups. The balance,-together-with-management and support services, is managed and monitored separately and recharged to client groups at the end of the year.

3.21 The target of achieving a £0.5m underspend is considered achievable by continuing the management actions of:

· Focusing recruitment on the most crucial posts and with the aim of reducing agency costs

· Reviewing the training programme

· Slowing down premises-related work

4 Capital programme

4.1 The capital programme cash limit for 2002/03 is £6,337,000, including funds carried forward from 2001/02, capital receipts generated in 2001/02, supplementary credit approvals for the development of mental health services and the social care information system, grants for information management developments and information technology for looked-after-children, a joint finance contribution from Health, and Policy and Resources funding of the older persons' homes investment strategy.

4.2 As at 31 December 2002, schemes to the value of £2,371,000 were committed as shown in Appendix 2

4.3 As regards the progress of significant schemes: the refurbishment schemes at Green Meadows, Denmead, was completed in November and those at Solent Mead, Lymington and Deeside, Basingstoke, Homes for Older People are due to complete in February and March 2003 respectively. The work on the new Alton Day Services building is due to start in May 2003.

4.4 Expenditure on minor works, furniture and equipment and information technology is projected to be contained within the respective block allocation cash limits.

Recommendations

It is recommended that:

1 The Executive Member notes the budgetary position at 31 December 2002.

2 The Executive member approves the management actions being taken to restrict spending to within the cash limit.

3 The Executive Member welcomes the additional financial support agreed by the Cabinet in order to assist with the problem of delayed hospital discharges

4 The Executive Member requests the Director of Social Services to continue to raise with the Social Services Inspectorate the issue of accounting for Direct Payments within performance indicators for domiciliary care and day care.

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