Contact: Gordon Shinn, ext 7526

1 Summary

1.1 The attached report was submitted to the Executive Member for Social Care on 20 June 2003.

1.2 The report outlines a number of changes that have occurred since the original budget was considered by both the Executive Member for Social Care and the Social Care Policy Review Committee in January 2003.

1.3 The principal changes since then are:

1.3.1 Allocations and conditions of government grants have become clearer, in particular the consolidation of 14 grants into one `High Performers' grant, with no conditions or audit inspection requirements.

1.3.2 Inflationary increases, whilst still significant, are less than budgeted.

1.3.3 Priorities and pressures have been reviewed, resulting in £1m addition to children and families services funded from the inflation contingency and management and support costs.

1.3.4 An extra £7m has been made available by the Cabinet for two priority areas: £3.5m each for intensive home care and helping to address the problem of delayed hospital discharges. The first £3.5m has been added to the 2003/04 cash limit whilst the second £3.5m is subject to a business case due to be presented to the Cabinet on 28 July.

1.3.5 The Cabinet has asked for a report on how the impact of any `growth' funds will be measured and monitored.

1.4 As a result of the above the allocations of growth have been revised to £15.2m as detailed in the appendix to the attached report.

1.5 Future budget monitoring reports to the Executive Member for Social Care will include information on the effectiveness of the use of growth funding and the impact on key performance indicators.

2 Recommendation

2.1 That the report be noted.

Contact: Gordon Shinn, contact ext: 7526

1 Executive Summary

1.1 At the time the 2003/04 Revenue Budget was approved by the Executive Member for Social Care, in January 2003, there were a number of significant uncertainties. Subsequently pressures and priorities have been reviewed, primarily as a result of updated information on activity levels, government grants and price increases.

1.2 The revised Formula Spending Share (FSS) has resulted in Hampshire Social Services having the second lowest FSS per head of population out of the 34 Shire County Councils, and the lowest of all those in the South East.

1.3 This review has meant that additional investment has been made possible in children and families services, for example in developing partnership work in teenage pregnancy services and staff recruitment and retention. Additional funding has also been made available to meet the costs of looked after children being accommodated in non-county resources. Also the additional £7m funding provided by the Cabinet will enable improvements in three key performance targets, primarily for older people.

1.4 Future monitoring reports will focus on the achievement of outcomes of the additional investment in services, together with other key activity and performance data.

2 Introduction

2.1 The Revenue Budget 2003/04 report to the Executive Member for Social Care meeting on 24 January 2003 set out the details of the proposed budget at that time. That report identified an estimated £15.5m that would be available for growth, made up of:

	£m
Net increase in passported FSS increase	6.6
Estimated increase in specific grants	8.9
	15.5

2.2 The report also outlined a number of uncertainties that resulted in the overall picture being unclear. These included:

· the level of some grants were unknown

· the exact nature of un-ring-fencing of grants was not certain

· full details of the introduction of fines for blocking hospital beds was unknown

· the outcome of price increases for the purchase of care was not clear

· the full impact of new National Care Standards Commission requirements were not clear, particularly the impact of new staffing levels

2.3 Given all these uncertainties a provisional assessment was made of how the growth of £15.5m could be used. Approximately half of this was earmarked for above inflation increases with the rest to meet unavoidable pressures.

2.4 Proposals were made on the basis of estimated pressures at that time and an assumption that there would not be an overspend in 2002/03 to be repaid in 2003/04. A separate report on this agenda shows that there was a small underspend (£72,000) in 2002/03.

2.5 On 10 February 2003 the Cabinet agreed to provide an extra £7.0m to Social Services in 2003/04 to help meet inescapable pressures, as follows:

· £3.5m for domiciliary care for older people to meet performance targets

· £3.5m for older people to address delays in hospital discharges

2.6 The current cash limit for 2003/04 is £264.5m, which includes the £3.5m for domiciliary care and additional adjustments for revised government grant figures. The £3.5m for dealing with the delayed discharges has not yet been added.

2.7 The Cabinet also agreed to release up to £2m to Social Services to help address the problems of delayed hospital discharges - in 2002/03 and into 2003/04. It is assumed that the unspent balance of this (about £0.9m) will be added to the 2003/04 cash limit.

2.8 The following paragraphs provide an update on the issues referred to in paragraph 2.2, the revised position with regard to the allocation of growth funding and the impact on performance targets.

3 Government Grants and Formula Spending Share

3.1 Most Government grant figures for 2003/04 have now been confirmed, with the following notable exception:

· Supporting People. The initial allocation of the main grant to fund the schemes is £29.8m. The final grant figure will not be known until July when more information will be available to assess the adequacy of the funding. The administration grant for 2003/04 is £815,000, an increase of £185,000 on 2002/03.

3.2 Following the approval of the initial budget proposals, the Formula Spending Share (FSS) for Social Services was reduced. A late change to the Area Cost Adjustment figures resulted in a £4m reduction in Hampshire County Council's overall FSS, including a £1m reduction in Social Services. The revised Social Services FSS figure - £203.6m - is equivalent to the Social Services budget for 2003/04.

3.3 Hampshire County Council has the second lowest FSS per head of population of all 34 Shire Counties - £162.50. It is the lowest figure of all the County Councils in the South East.

3.4 The FSS change had a knock-on effect to some grants where national allocations are based on FSS figures and these have been reduced accordingly.

3.5 The flexibility of the use of grants for CPA `Excellent' Councils has also been confirmed. This has resulted in 13 revenue grants being brought together into one special grant - the Social Services (High Performers) Grant. For Hampshire County Council this amounts to £20.8m for which there are no specific spending conditions.

3.6 The result of these changes is minimal in terms of the overall budget position. However, it does provide more scope to move funds to areas of highest pressure.

4 Delayed Discharges

4.1 A figure of £2m was included in the cash limit based on the Council's estimated share of the proposed grant at the time the budget was prepared (£100m nationally). The Government has confirmed that the `reimbursement' scheme will commence in shadow form on 1 October 2003 and actual payments will start from 1 January 2004. A grant of £50m nationally is available in 2003/04. Hampshire County Council's share of this is £1.232m. The cash limit will be reduced by £0.8m to reflect this reduced grant figure.

4.2 In addition to this grant, the new funding available for addressing this issue includes the balance of the £2m made available in 2002/03 (i.e. £0.95m) and the additional £3.5m approved by Cabinet. Other developments - including the intermediate care services in older people's homes and intensive home care - will also help to alleviate the problem.

4.3 The business case to secure the release of the additional £3.5m contingency set aside for this issue is being prepared for submission to the Cabinet once full details of the regime are known. That will focus on:

· Using the total funds available to increase, or at least maintain, overall market capacity. The Council's intentions in this respect have already been demonstrated through substantial increases in fees paid to independent sector providers and development of other services, not least the planned provision of nursing home places.

· Demonstrating that funds are being used effectively to minimise the number of acute delays that are Social Services' responsibility, and therefore keep any financial penalties to a minimum

· Identifying progress and proposals for the necessary business process arrangements, including any need for additional staffing in hospitals, to meet the requirements of the re-imbursement regime.

5 Growth Allocation

5.1 Following the changes to the Government grant figures and the increased flexibility, the balance available to meet growth requirements has been reduced from £15.5m to £15.2m.

5.2 Appendix 1 shows a breakdown of the growth and how it is planned to be used. £8m was originally earmarked for price increases above the corporate inflation assumption of 2.5% provided in the base budget.

5.3 Although increases have been substantial (over 10% on both nursing care and domiciliary care for older people) it is estimated that £0.5m can be released to meet other pressures.

5.4 New care standards are being imposed by the National Care Standards Commission, resulting in increased staffing levels in the County Council's homes for older people. This is being phased in during the year as inspections are carried out, at an estimated cost of £0.4m in 2003/04, offset by anticipated savings of £0.3m on agency costs. The full year effect is an estimated additional £0.5m cost.

5.5 The 2002/03 final accounts report, elsewhere on this agenda, shows an overspend of about £3m on children's services. The original budget proposals included an extra £3.3m for children's services, of which £2.4m was to meet ongoing pressures. Since the budget report was prepared in January pressures have continued to increase, with a net 19 more children accommodated in residential placements and 15 more in foster placements. Further resources have also been identified to develop services for teenage pregnancy, mental health and staff recruitment and retention initiatives. Consequently an extra £1m has been allocated to Children & Families services.

5.6 This £1m increase on Children & Families budgets is funded by the release of £0.5m due to lower inflation increases than budgeted and a £0.5m reduction on management and support costs as a result of increased grant flexibility.

5.7 The Workforce plan, recently approved by the Cabinet, identified a total of 1,013 new posts, of which 263 are included within the budget and 750 are subject to funding being agreed. No appointments can be made, therefore, to these posts within budget plans. However, many of these posts relate to the provision of nursing care places yet to be built and unlikely to come on stream until the latter part of 2004.

6 Performance Targets

6.1 On 16 May 2003 the Social Care Policy Review Committee considered a report on the management action plans to improve performance. That report focuses primarily on the `investigate urgently' or `one blob' Performance Assessment Framework (PAF) indicators.

6.2 Three indicators have been noted as areas needing `significant' investment, namely:

· Intensive Home Care (C28) i.e. the number of households (of all adults) receiving more than 10 hours care in the home and more than 6 visits during the week, against the population in Hampshire aged over 65.

· Older People helped to live at home (C32) i.e. the number of older people aged 65 or over helped to live at home as a proportion of the population of people in Hampshire aged over 65.

· Delayed Discharges (D41) i.e. the number of people over 65 experiencing delayed discharges from acute hospital beds.

6.3 As mentioned in paragraph 2.5 the Cabinet agreed to provide an extra £7.0m to help meet these pressures. The business case for the use of the £3.5m for intensive home care was subsequently approved by the Cabinet on 24 March 2003. It is estimated that, with the addition of this £3.5m together with other additional budgetary provision, the C28 PAF indicator will increase from 6.5 in 2002/03 to between 10 and 12 by the end of 2003/04. This will also help to improve the C32 indicator.

6.4 Appendix 1 shows details of the expected outcomes of the additional growth, in particular on specific performance indicators. However, this only forms part of the picture and it is intended that key activity and performance data, incorporating the growth funds, will be monitored on a regular basis throughout the year.

Recommendations

1 That the Executive Member for Social Care agrees the revised allocation of the growth funds provided by the County Council.

2 That future budget monitoring reports to the Executive Member for Social Care include information on the effectiveness of the use of the growth funding and the impact on key performance indicators

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

Appendix 1

Social Services - Use of Growth Funds in 2003/04

Social Services - Use of Growth Funds in 2003/04