Contact: Gordon Shinn, Head of Finance, ext 7526, e-mail: [email protected]

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.

1.2 This decision supports Aim 5 of the Corporate Strategy (Improving Services) by ensuring that resources are directed at the highest priority performance areas.

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, e-mail: [email protected]

1 Executive Summary

1.1 Every effort is being made by the Social Services Department to manage down significant pressures and to stay within the revenue budget cash limit. These efforts are focused on reducing spend in areas where there is minimal impact on service users and front-line staff. It remains possible that, even with the potential transfer of £0.5m from capital budgets, there may be a revenue overspend. However, it is also possible that, as a result of effective use of government grants, there may be no need to make a capital transfer.

1.2 Within the 2004/05 revenue budget proposals a sum of £1.5m has been set aside as a contingency. The first call on this will be to repay any overspend from 2003/04 before any balance can be used for other pressures.

1.3 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.

1.4 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.

2 Introduction

2.1 This report provides the third detailed budget monitoring details of 2003/04, showing a pressure of £1.3m (0.5%) as at 31 December 2003, a reduction of £1.1m compared with £2.4m (0.9%) at 30 September 2003 (as reported to the Executive Member on 21 November 2003). The 2004/05 Revenue Budget report to both the Policy Review Committee and the Executive Member on 23 January 2004 includes a report on the 2003/04 revised budget where the possibility of an overspend is identified.

2.2 The cash limit has been increased by £6.3m, the following being the major changes:

· £3.4m addition in respect of residential allowance grant - to offset the income loss associated with the withdrawal by the Department for Works and Pensions of this allowance to residents in independent sector care (effective October 2003). The impact is being monitored, although the grant is higher than originally envisaged.

· £3.9m for Supporting People. The final funding allocation for 2003/04 (the `platinum cut') has recently been announced by the Office of the Deputy Prime Minister (ODPM). The total grant for 2003/04 is - as was expected - £34.5m and commitments against this are being reviewed.

· £1.4m reduction for County Treasurer's services now being treated as outside the cash limit

· £0.4m increases in government grants e.g. Youth Justice Board £0.2m

2.3 The last detailed report to the Executive Member on 21 November identified the pressure areas and actions being taken to reduce those pressures with the aim of achieving an overall balanced budget.

2.4 Subsequently, the Department's management team has monitored and reviewed the proposals and accepts that the pressures on children and families are so great that the proposed level of reduction could not be achieved. It was agreed that the overspend on that cash limit should be contained at £2.4m (£0.4m higher than previously proposed) with a corresponding reductions to other services.

The financial impact of these actions (with grant-related changes expected to contribute at least £0.2m) is estimated as follows:

Service area	December forecast £m	Management Actions £m	Outturn forecast £m
Children & Families	2.7	(0.3)	2.4
Adults	(0.0)	(0.2)	(0.2)
Older People	(0.7)	0.0	(0.7)
Management & Support	(0.1)	(0.1)	(0.2)
Capital budget transfer		(0.5)	(0.5)
Other/Contingency	(0.6)		(0.6)
Total	1.3	(1.1)	0.2

2.5 The £0.7m forecast underspend on older people services is partly due to higher than anticipated government grant (residential allowance) and is after the extra £7m funding agreed by the Cabinet is being used on key older people performance areas. More detail is provided in paragraphs 3.6 to 3.10 below.

2.6 The following paragraphs report in a summarised version the pressures and management actions that were discussed in some detail in the report to the Executive Member on 21 November 2003, with updates where appropriate.

3 Revenue Budget Pressures

Children & Families

3.1 Pressures on Children & Families budgets remain high, primarily as result of :

· Increased numbers of looked after children for whom residential accommodation is required (27 to 31 December 2003), at an average cost of over £40,000 per placement

· Additional staff time spent on post Climbié (Laming report) work and to meet Social Services Inspectorate requirements, resulting in significant improvement in key performance areas (£0.3m).

· Additional spend on staff recruitment and retention initiatives (approximately £0.6m).

· In-house residential units' additional costs of staff cover, especially where there are particularly difficult children requiring a high staff ratio.

· Increased demand for legal services provided by the Chief Executive including the implementation of the Climbié recommendation for a twenty-four hour legal advice service.

3.2 The following actions are being taken that have already reduced the overall pressure by £0.2m and a further £0.27m is anticipated by the year end:

· 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.

· Commitments are being closely scrutinised.

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

· Review of foster care to ensure cost-effective provision

Adults

3.3 The main areas of pressure are on residential services, particularly in learning disabilities and domiciliary care, particularly in physical disabilities. 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. In the nine months to December 2003, within Physical Disabilities, there has been an increase of 9% in the number of clients receiving domiciliary care services, thus contributing to the key performance indicator of helping people to live at home.

3.4 Management actions to reduce overall pressures included successful negotiations with a health trust, resulting in backdated contributions of transitional housing benefit in respect of learning disability clients (£0.4m). However, pressures within other service areas have meant that targeted areas for reductions have not fully materialised.

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

Older People

3.6 The additional funding approved by the Cabinet - £3.5m for addressing delayed discharges and £3.5m for intensive home care - has been used very effectively.

3.7 Progress continues to be made in reducing the level of delayed discharges (PAF indicator D41). The last report showed the trend in reduction of Social Services delays - down to 59 at 27 October 2003. The `fining' regime came into force on 5 January 2004. As at 30 January 2004 the total number of delays was 166, of which 29 (17%) were for social care reasons, but not all were of a type subject to reimbursement. The total amount of fines for the 4 weeks in January was £25,100, which means there was an average of nine clients at any one time for whom a fine was incurred.

3.8 The additional investment in intensive home care services has improved the C28 Performance Assessment Framework (PAF) indicator from 6.5 in 2002/03 to about 8.4. The target of 10 by the end of the financial year should be achieved.

3.9 Deferring schemes within the home care service have reduced financial pressures. Delays were inevitable in any event due to staff recruitment difficulties.

Management & Support

3.10 The majority of this budget is managed by the Assistant Director (Resources). The last budget monitoring report identified the key pressure areas:

· Recruitment advertising.

· Criminal Records Bureau fees increased from £12 per disclosure to up to £29.

· Staff costs where, occasionally, essential support services have to be covered by agency staff in order to maintain operational activities.

3.11 Actions continue to be taken in order to contain the spend within budget, including:

· 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 31 December 2003, schemes to the value of £4,192,000 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 is due for completion in July; and the construction of the new Alton Day Services building is due to start in the near future.

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

4.5 A 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 if necessary, by:

· Delaying 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'.

Recommendations

1. That the Executive Member notes the budgetary position at 31 December 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