Contact: Gordon Shinn, Head of Finance, ext 7526

1. Summary

1.1 The following decision is sought:

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

1 Reason(s)

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

2 Other options considered and rejected

2.1 None

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

3.1 None

4 Dispensation granted by the Standards Committee

4.1 None

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

5.1 Not applicable

Approved by: Date of decision:

Cllr Felicity Hindson

Contact: Gordon Shinn, Head of Finance, Ext: 7526

1 Executive Summary

1.1 The demand pressures on Social Services continue to be significant, most notably on services to children and families. At the same time additional funding is being targeted on improving services in key performance areas, such as intensive home care and the reduction in delayed hospital discharges.

1.2 The projected revenue budget pressure is a potential overspend of £2.3m (0.8% of budget) were no corrective action to be taken. This is fairly typical at this time of year as cautious projections of the impact of management actions tend to overstate the position. At this time last year a pressure of £3.6m (1.7%) was reported and the final position was a £72,000 underspend. Nonetheless there is a need for continued management action that prioritises and maximises cost-efficient service provision.

2 Introduction

2.1 This report provides the first budget monitoring details of 2003/04, showing a pressure of £2.3m (0.8%) at 31 July. This is accounted for by pressures on children and families services of £2.2m, services for people with learning disabilities of £0.5m and other pressures of £0.2m, offset by an underspend on centrally held budgets of £0.6m (see Appendix 1).

2.2 On 20 June 2003 the Executive Member for Social Care received a report on the 2003/04 revenue budget. That report provided an update on issues that were uncertain at the time the budget was originally agreed, in particular:

· The level of, and conditions relating to, specific grants

· The details of hospital bed- blocking fines

· The outcome of price increases for the purchase of care

· The requirements of the National Care Standards Commission relating to staffing levels within County Council residential establishments

2.3 That report also set out how the revised allocation for growth would be used and identified the key outcomes and impact on performance targets. The summary is repeated at Appendix 2 and an update on Performance Assessment Framework (PAF) indicators is shown at Appendix 4.

2.4 The cash limit of £266m includes the additional £3.5m agreed by the Cabinet for older people services to help address the delays in hospital discharges. The forward projections assume this will be spent. However, this funding is still subject to the formal approval by the Cabinet of a business case for its use.

2.5 Further changes will be made to the cash limit in respect of :

· The withdrawal of residential allowance from clients in independent sector residential accommodation from 6 October 2003; and

· The final allocation of Supporting People grant.

· More detail is provided below on these two issues. However, for now these are being treated as a neutral impact on the bottom line position.

3 Revenue Budget Pressures

Children & Families

3.1 Pressures on Children & Families budgets have continued to increase, primarily as result of four factors:

· Increased numbers of looked after children for whom residential accommodation is required. The number of children accommodated in non-county residential placements and independent foster agency care has increased by 22 since the start of the year. At an average cost of over £40,000 this is creating a significant pressure on the budget. Placements continue to be scrutinised closely and review work has identified the potential for a number of placements to be brought back `in-house' to either residential children's homes or foster care. Opportunities for doing this are being explored, although there is not enough capacity to achieve significant savings.

· Additional staff time spent on post Climbié (Laming report) work and to meet Social Services Inspectorate requirements. Outcomes of the SSI inspection and self audit have been reported to the Executive Member for Social Care on 10 September 2003 and the Social Care Policy Review Committee on 12 September 2003. This additional investment in staff time - at a cost of about £200,000 - has helped to achieve the improvement in the outcomes.

· Additional spend on staff recruitment and retention initiatives. A report on the success of the recruitment and retention initiatives was considered by the Social Care Policy Review Committee on 12 September. The additional cost is approximately £0.6m. The longer term impact of the initiatives should result in savings, particularly from more effective review work and reduction in agency spend.

· Pressure on in-house residential units, particularly on staff costs. A number of units have pressures due to additional costs of staff cover, especially where there are particularly difficult children requiring a high staff ratio. Reviews of these placements are being carried out to assess whether care could more appropriately be provided in other more cost-effective ways.

Adults

3.2 The main area of pressure is on Learning Disabilities, particularly on residential services. Actions were taken in 2002/03 to move people from lower levels of support in residential and domiciliary care to the supported living sector (now Supporting People). Learning Disabilities year on year is facing increasing pressure from high cost packages for complex needs, and challenging behaviour where families are no longer able to cope. However, the continuation of management action should ensure that this pressure reduces and a spend within cash limit should be achievable. These actions include:

· Continuing care assessments in accordance with the agreed toolkit. This appears to be working well and Primary Care Trusts are picking up their financial commitments as individual cases are agreed. Until each individual assessment is finalised the exact contribution is not known and, therefore, cautious projections have been made.

· Ensuring that Independent Living Fund (ILF) is applied where appropriate, and included in projections.

· Where homes have deregistered at the end of 2002/03 that the orders for the clients have been adjusted accordingly. This is an ongoing issue due to some homes applying for deregistration late in the last financial year.

· Ensuring that, where appropriate, Supporting People contracts and funding are used.

Older People

3.3 The Older People's budget forecast outturn is projected to be on line with the cash limit. This includes the additional £3.5m for addressing delayed discharges, which is subject to the formal approval of a business case by the Cabinet. Some of this is being invested in the employment of additional care management staff to ensure the processes are managed as efficiently as possible. Some of it is being used to prevent hospital admissions. The scheme starts in `shadow' form in October 2003, with full implementation from 5 January 2004. A more detailed report in this was considered by the Social Care Policy Review Committee on 12 September 2003.

3.4 Progress continues to be made in reducing the level of delayed discharges (PAF indicator D41). Although the figures fluctuate from week to week there is a definite downward trend in the proportion of delays that are the responsibility of Social Services, as the following table shows:

	Total Delays	Social Services Responsibility	% of Total
30 March 2003	225	116	51.6
27 April 2003	196	123	62.8
25 May 2003	165	81	49.1
29 June 2003	188	74	39.4
27 July 2003	175	53	30.3

3.5 As at 31 August the number of delays for which Social Services bears responsibility was 52. It is anticipated that these improvements will continue over the rest of the year in preparation for the implementation of the hospital reimbursement legislation and, therefore, minimise the amount of any fines. The shadow period of operation - from October to January - will help to determine any particular `hot spots' where action can be targeted.

3.6 The County Council has received a grant of £1.2m to cover the cost of implementation in 2003/04. This will cover the cost of fines based on current activity and also help with additional investment to meet increased demand over the winter period.

3.7 The development of intermediate care facilities in the County Council's own residential homes is proceeding, albeit a bit slower than anticipated. Primary Care Trusts are being consulted in order to maximise the use of these places.There have been some difficulties encountered regarding the placement of `out of area' patients i.e. clients who are not patients of the General Practitioners in the area of the home.

3.8 An extra £3.5m was also approved by the Cabinet for investment in intensive home care services, with the aim of increasing the C28 Performance Assessment Framework (PAF) indicator from 6.5 in 2002/03 to between 10 and 12 in 2003/04. The current position is estimated at 7.6.

3.9 The budget update report to the Executive Member on 20 June 2003 advised that increased staffing levels were required in the County Council's homes for Older People, as a result of new staffing ratio standards being imposed by the National Care Standards Commission (NCSC) following their inspections.. A total of 101 additional posts are required and are being recruited to. This number, although significant, is less than originally was thought would be necessary and is being funded from within the budget. Some of this is being achieved through a reduction in the use of agency staff compared with 2002/03. However, the financial risk is that these posts may not all be successfully filled and may result in more agency staff being recruited in order to meet NCSC deadlines.

4 Residential Allowance

4.1 Earlier this year the Government announced the withdrawal of the residential allowance paid to clients who entered independent sector residential care prior to 8 April 2002. The allowance had already been withdrawn from new clients from that date.

4.2 During the Summer the Government issued two consultation papers on the issue: one on the methodology of grant allocation and one on the proposals regarding the change to residential care charges.

4.3 The grant allocation is intended to cover the loss of income from clients and additional costs in respect of carrying out additional financial assessments on these clients (over 2000) and care assessments in respect of clients who were previously self-funding but may now seek County Council support (known as `Boyd Loophole' cases). It is difficult to be certain of the financial impact, as there is no detailed database of individuals' financial circumstances. However it is estimated that the total grant of about £3m (which is for the part year of 6 October 2003 to 31 March 2004) should cover these elements. Further work will be done to monitor the impact. The grant for 2004/05 is not yet known.

4.4 At the same time as this change the Government is also introducing a new Pension Credit, which increases the benefit for those people who have savings set aside to supplement their state pensions. It is believed that this will be disregarded for financial assessment purposes and, therefore, will not impact on the County Council's income.

4.5 The consultation on these changes is extremely late. The deadline for the second document was 5 September and does not give much time to implement the final outcome. Officers are working closely with Provider Homes and their representatives to minimise the disruption of these changes.

5 Supporting People

5.1 The principal development in Supporting People has been the successful completion of the `Platinum Cut' submission. This will be used by the Office for the Deputy Prime Minister (ODPM) to finalise Hampshire's grant allocation for 2003/04 and beyond.

5.2 The original grant allocation notified at the beginning of the year was £29.752 million for Supporting People services plus £851,000 for the administration grant. This was based on the `Golden Cut' on 17 December 2002, which formed an initial assessment of the overall costs of schemes, which the ODPM used to distribute the grant funding available. Whereas the administration grant is fixed, the grant for services will change in light of the Platinum Cut submission.

5.3 The `Platinum Cut' was a position statement by authorities as at 31 July 2003, consisting of two elements:

· `Sizing the pot' - approved figures for the different funding streams of the various agencies involved i.e. `inherited' schemes.

· `Pipeline' schemes - newly approved schemes, some of which are in place, some not.

5.4 Based upon the Platinum Cut, Hampshire's total is estimated at £33.2m for inherited scheme and £1.8m for pipeline services. This is currently being verified by the ODPM and will be subject to audit later in the year.

5.5 It is anticipated that the ODPM will revise their grant allocation to match the £35 million figure but this will not be known until October. The Supporting People team is therefore now focusing its efforts upon quantifying the impact of any changes to services since 31^st March 2003. This will indicate whether the Authority needs to identify savings in order to offset service growth or whether there has been a decline in either the volume or price of services that will afford a financial cushion.

5.6 Early indications are that, if the ODPM matches the Authority's claim of £35 million, the Supporting People team will be able to manage any in-year growth through savings generated through service reviews. The concern at the moment is whether the ODPM's national grant control total is large enough to accommodate all authorities' Platinum Cut submissions.

6 Performance Indicators

6.1 Appendix 4 shows the draft position on the Performance Assessment Framework (PAF) indicators, following the input of 2002/03 actual figures. These are subject to formal ratification by the Social Services Inspectorate (SSI) who will publish the national figures in November 2003. At that time it will be possible to identify more clearly how the Council's performance has changed relative to the national picture.

6.2 Comments on some of these indicators are included in the paragraphs above. A more detailed report will be submitted to the Executive Member after the figures are released by the SSI.

7 Capital programme

7.1 The Capital programme cash limit for 2003/04 is £7,066,000, including funds carried forward from 2002/03, 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, Performance Fund and intermediate Care grants and Policy and Resources funding of the older persons' homes investment strategy.

7.2 As at 31 July 2003, schemes to the value of £1,499,000 were committed as shown in Appendix 3.

7.3 As regards the progress of major building-work schemes: the refurbishment of Malmesbury Lawn Older Persons' Home in Havant is due to commence in October and the construction of the new Alton Day Services building is due to start in November of this year.

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

Recommendations

1. That the Executive Member notes the budgetary position at 31 July 2003.

2. That the Executive Member endorses the management actions being taken to contain spending within the cash limit, as set out in paragraph 3.

Section 100 D - Local Government Act 1972 - Background Documents

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.

None