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 Social Services Department is taking a number of actions to manage down a projected pressure of £2.4m and to stay within the revenue budget cash limit. In order to achieve this, efforts are being focused on reducing spend in areas where there is minimal impact on service users and front-line staff.

1.2 There are significant demand pressures on Social Services, particularly on services to children and families. New pressures have also emerged during the year for which no financial provision was made when the original budget was set. At the same time funding is being targeted on improving services in key performance areas, such as intensive home care and the reduction in delayed hospital discharges, and maintaining other levels of performance.

1.3 Some of the actions being taken now are of a `one-off' nature (including the possible transfer from capital budget at the year end), which means that alternative measures will need to be put in place for 2004/05 to avoid an ongoing financial pressure. Under current financial rules any overspend this year would have to be repaid from next year's cash limit.

2 Introduction

2.1 This report provides the second budget monitoring details of 2003/04, showing a pressure of £2.4m (0.9%) as at 30 September, a slight increase compared with £2.3m (0.8%) at 31 July (as reported to the Executive Member in September). The largest variances are on children and families services of £2.9m and services for people with learning disabilities of £0.6m. The central contingency of £0.5m is now shown as not committed i.e. it is offsetting the other pressures and is taken into account in the bottom line figure. Appendix 1 summarises these figures.

2.2 The cash limit of £266m includes the additional £3.5m agreed by the Cabinet on 27 October for older people services to help address the delays in hospital discharges. The forward projections assume this will be spent.

2.3 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. This was reported in some detail in the last budget monitoring report. The Government grant, expected to be about £3.4m, should be sufficient to cover the income loss and associated costs. However, this will not be known until financial assessments are completed and the impact can be more closely analysed.

· The final allocation of Supporting People grant. Again, this was considered as part of the last budget monitoring report. The final funding allocation for 2003/04 (the `platinum cut') has recently been announced by the Office of the Deputy Prime Minister (ODPM). The grant is £33.5m and, although this requires an estimated saving of £345,000 to be achieved in the current year, it is believed that pressures can be contained within the funds available.

2.4 These two issues are being treated as having a neutral impact on the bottom line position.

2.5 An unallocated amount of £595,000 had been held in `Contingency/Grants' in respect of the grant received for former Preserved Rights clients. This has now been allocated to Learning Disabilities and the cash limit adjusted accordingly. This has no impact on the `bottom line' figures, as it was being shown as `uncommitted'. It does affect the presentation of the Learning Disabilities figures in Appendix 1. In the formal accounts, as presented in the final accounts paper, this would have been allocated to Learning Disabilities in any event.

2.6 In considering the current financial forecasts, the Department's Management Team members have put in place a number of actions to ensure that spend remains within the cash limit for 2003/04. The following paragraphs describe some of the demand pressures being faced, actions being taken to contain spend and the potential consequences and risks associated with those actions.

3 Revenue Budget Pressures

Children & Families

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

· 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

· 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 carried out at least twice a year in order to check needs are met and to assess whether care could more appropriately be provided in other more cost-effective ways, in accordance with the needs as assessed.

· Increased demand for legal services, including the implementation of the Climbié recommendation for a twenty-four hour legal advice service. Extra staff resource has been put in place by the Chief Executive, the cost of which falls on Social Services.

3.2 The following actions are being taken to reduce budget pressures by an estimated £0.9m:

· Placements in independent sector residential and foster care are being reviewed and a number have been identified that could possibly be brought back `in-house' to either residential children's homes or foster care. Opportunities for doing this are being explored, although in order to achieve financial benefits it is the more expensive placements (and the more challenging) that need to be returned.

· Commitments are being closely scrutinised, in particular where there are new developments proposed that have not yet started.

· Operational managers have been given financial targets to deliver against without impacting on front-line services and key performance areas.

Adults

3.3 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.

3.4 Continuing care assessments are being done in accordance with the agreed toolkit. A target was set at the beginning of the year to ensure appropriate access to continuing health care. Whilst there has been some success in this, agreements take longer to reach and have not been as successful as originally anticipated. The Council, therefore, needs to reinforce application of the toolkit, which has been agreed by the health authorities.

3.5 The continuation of management actions should achieve further savings in the region of £0.2m. These actions include:

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

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

Older People

3.6 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, for which a business case was approved by the Cabinet on 27 October. 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. A more detailed report on this was considered by the Social Care Policy Review Committee on 12 September 2003.

3.7 Progress continues to be made in reducing the level of delayed discharges (PAF indicator D41). Although the figures fluctuate from week to week there has been a 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
31 August 2003	155	52	33.5
29 Sept 2003	190	74	38.9
27 Oct 2003	159	59	37.1

3.8 The figures at the end of September show an increase, which is largely attributable to an, as yet, unexplained increase in Portsmouth Hospitals.

3.9 Every effort is being made to reduce the number of delays to as close to nil as possible, which will minimise the amount of any fines following the full implementation of the hospital reimbursement legislation in January 2004. The shadow period of operation - from October to January - should help to determine any particular `hot spots' where action can be targeted. It is too early at this stage to judge the effectiveness of the `shadow' operation. Early indications are that the notification systems are not fully operational.

3.10 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.

3.11 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.

3.12 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 about 8 and it is envisaged that 10 should be achieved by March 2004.

3.13 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 at an estimated additional annual cost of £1m, of which approximately £600,000 has been earmarked in 2003/04. This number of staff, 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.

3.14 In order to assist the department to deliver a balanced budget the following actions, aimed at realising a reduction in pressures of £0.5m:

· Development of schemes within the Home Care service are being deferred (£0.3m). Recruitment difficulties are in any event resulting in delays to schemes such as First Response in parts of the county.

· There may be some slippage in recruiting to residential care posts in the County Council's Older People's homes (£0.2m). Although there was no specific provision in the original budget a sum was set aside to cover increased staffing levels required by the NCSC.

Management & Support

3.15 The majority of this budget is managed by the Assistant Director (Resources). The main budget areas giving rise to the projected £286,000 pressure are:

· Recruitment advertising. Over 80% of this budget has already been committed, primarily as a result of campaigns to recruit to key vacancies

· Criminal Records Bureau fees. On 1 July 2003 fees were increased from £12 per disclosure to £24 for standard disclosures and £29 for enhanced disclosures. Additionally, the National Care Standards Commission required that disclosures should be carried out for all staff employed prior to 1 April 2002 who work with or are responsible for children/vulnerable adults in settings regulated by them, at an estimated additional cost of £90,000.

· Staff costs remain difficult to contain within budget as, occasionally, essential support services have to be covered by agency staff in order to maintain operational activities.

3.16 Actions being taken in order to contain the spend within budget include:

· Re-deployment of IT resources instead of acquiring new kit, particularly that associated with the SAP and SWIFT systems developments. This can only be a temporary measure as the numbers of new users requiring access will increase significantly over the coming months.

· Delaying appointments to vacant posts wherever possible, without impacting on front-line service delivery.

· Exploring further options to reduce recruitment advertising costs.

4 Capital programme

4.1 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.

4.2 As at 30 September 2003, schemes to the value of £3,503,000 were committed as shown in Appendix 2.

4.3 As regards the progress of major building-work schemes: the refurbishment of Malmesbury Lawn Older Persons' Home in Havant began at the end of September and the construction of the new Alton Day Services building is due to start early in the new year.

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

4.5 Capital budget transfer to revenue may need to be considered in order to assist the Department to contain the revenue spend within cash limit. Given that the majority of the locally resourced programme is limited to the most essential works and other major budgets are directly linked to specific external funding, there is limited scope for this. However, up to £500,000 may be achievable by:

· Delaying essential works into the next financial year. This will mean that there is extra pressure on next year's small allocation.

· Using the uncommitted contingency of £98,000, but this will mean less flexibility in meeting price increases and other higher than expected design costs etc.

· Using the uncommitted Supported Housing allocation of £260,000. However, this will delay any proposals to develop services with partner agencies, particularly in relation to `Extra Care Housing'. Withdrawal of this funding could also affect the amount of specific grant that could be attracted in 2004/05 and 2005/06.

5 Summary of proposals to contain revenue spend within cash limit

Service area	£m
Children & Families	0.9
Adults	0.2
Older People	0.5
Management & Support	0.3
Capital budget transfer	0.5
Total	2.4

Recommendations

1. That the Executive Member notes the budgetary position at 30 September 2003.

2. That the Executive Member endorses the management actions being taken to contain spending within the cash limit, as set out in paragraphs 3 and 4.

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