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

Summary

1.1 The following decisions are sought:

1.1.1 That the Executive Member for Social Care agrees the proposed allocations from the contingency, which will be formally incorporated into the revised budget.

1.1.2 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

1.1.3 That the Executive Member for Social Care makes representations to the Office of the Deputy Prime Minister and the Department of Health about the unreasonable funding reduction for the Supporting People budget and copies of her letter be sent to the Leaders of the District Councils, Hampshire Members of Parliament, the Probation Service and the Strategic Health Authority.

1 Reasons

1.1 The Cabinet requested that Executive Members consider the impact of any growth or savings included in 2004/05 budget plans, in particular the impact on performance targets.

1.2 To update the Executive Member on the latest position regarding the 2004/05 revenue budget, including proposals and expected outcomes from the use of the additional growth.

1.3 Decisions on the revenue budget will support the County Council's corporate aims and its four priorities by focusing financial resources on areas such as improving the quality of life of children in need, vulnerable adults and older people.

2 Other options considered and rejected

2.1 None

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

3.1 None

4 Dispensation granted by the Standards Committee

5.1 Not applicable

4.1 Not applicable

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

5.1 Not applicable

Approved by: Date of decision:

Councillor: Felicity Hindson

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

1 Executive Summary

1.1 The 2004/05 Revenue Budget was approved by the Executive Member for Social Care in January 2004. This detailed proposals for new growth of £14.3m included a contingency provision of £1.5m to repay any overspend in 2003/04 and to meet any other high priority or unforeseen pressures. The resultant position on the 2003/04 revenue budget (as reported elsewhere on this agenda) means that decisions can now be taken to release some of this contingency.

1.2 The Cabinet has agreed, subject to approval of a business case, to provide an additional £0.4m on a `pump-priming' basis in 2004/05 only to Social Services against a targeted business plan for improvements in children's services. Proposals are due to be considered by the Cabinet on 28 June 2004.

1.3 The department has agreed a strategy for dealing with a potential £1.8m funding shortfall within the Supporting People element of the budget. Nonetheless, representations will continue to be made to the Office of the Deputy Prime Minister on the unreasonableness of the late reductions required.

1.4 Future budget monitoring reports to the Executive Member will update on progress on funding issues, the achievement of outcomes of the additional investment in services and other key activity and performance data.

1.5 The Social Services revenue budget for 2004/05 supports the County Council's corporate aims and its four priorities by focusing financial resources on areas such as improving the quality of life of children in need, vulnerable adults and older people.

2 Introduction

2.1 The Revenue Budget 2004/05 report to the Executive Member for Social Care meeting on 23 January 2004 set out the details of the proposed budget at that time. The base budget was agreed at £285.3m. With the addition of agreed growth , the cash limit was subsequently set at £294.9m.

2.2 The report identified an estimated £14.3m that would be available for growth, made up of:

	£m
Net increase in passported FSS increase	9.8
Estimated increase in government specific grants	4.5
	14.3

2.3 The agreed allocation of this growth is detailed in Appendix 1, summarised below:

	£m
General contingency	1.5
Children and families	3.6
Older People	5.8
Adults	2.8
Management and Support	0.8
Additional income	(0.2)
Total	14.3

2.4 At its meeting on 12 February 2004 the Cabinet agreed to provide an additional £0.4m on a `pump-priming' basis in 2004/05 only against a targeted business plan for improvements in children's services. The business plan for this is due to be considered by the Cabinet on 28 June 2004 and the additional funding will be dependant upon specific performance outcomes being achieved.

2.5 The cash limit for 2004/05 will be revised as a result of the carry forward of underspend from 2003/04, changes arising from slippage from 2003/04 grants, 2004/05 grant figures being finalised (especially residential allowance), the addition of £0.4m referred to above, and other minor adjustments. The Executive Member will be formally asked to approve these changes as part of the revised budget process later in the year.

3 Use of contingency

3.1 The general contingency of £1.5m was included in the 2004/05 budget to meet any overspend from 2003/04, to provide further capacity to absorb any further demands or cost pressures on children's services and to meet any other unforeseen pressures. As reported elsewhere on this agenda there was an underspend of £0.8m in 2003/04 and, therefore, the £1.5m contingency provision can be fully utilised on meeting other pressures.

3.2 The department's management team has already agreed to make some allocations from the contingency:

· £0.3m to meet the additional cost of management grade pay awards (agreed at 5% compared with the provision of 2.5%)

· £0.2m as the `match funding' for the additional funds agreed by the Cabinet in respect of partnership developments (subject to approval by Cabinet of the business case) - see paragraph 5 below

· £0.3m in respect of recruitment and retention issues within the children's services - see paragraph 5 below

3.3 The unallocated balance of £0.7m will be retained to meet other pressures arising during the year. This will be subject to the regular budget monitoring reviews carried out by the management team. Some or all of this is likely to be required to meet staff pay awards due on 1 April 2004 but not yet agreed. The budget contains provision for a 2.5% award. An extra 0.5% will cost approximately £0.4m. Any further allocations will not, therefore, be made until the pay award outcome is known, and will then be reported to the Executive Member.

4 Supporting People

4.1 There was a small underspend of about £0.4m on the Supporting People budget in 2003/04. This was due to slippage in some schemes. The grant conditions allow this funding to be carried forward into 2004/05.

4.2 The Supporting People grant for 2004/05 was not known at the time the 2004/05 budget was prepared although it was known that a savings requirement would be likely. However, it was assumed that schemes would be reviewed in order to keep within the available funding

4.3 The grant for 2004/05 is £33.5m, slightly less than 2003/04 whereas, to keep pace with inflation at 2.5% would have required an additional £0.8m. This allows no increase for meeting the full year costs of pipeline schemes started in 2003/04 and those due to start in 2004/05. This leaves a shortfall in funding of £1.8m in 2004/05. The Office of the Deputy Prime Minister (ODPM) believes savings should be made by reviewing schemes.

4.4 The Supporting People County Core Group has supported proposals by the Supporting People team to achieve these savings and a strategy has been agreed by the social services management team. In addition to the carry forward of the 2003/04 underspend, this includes capping service costs, re-negotiating contract prices and deferring implementation of some schemes.

4.5 Within the Supporting People contracts there is a clause to the effect that service changes can only be effected 12 months after the review and this was agreed by the ODPM. This, therefore, makes the achievement of significant savings very difficult, especially in the first full year of operation. As this is part of the ODPM's standard contract it is felt that representations should be made to get them to re-consider the funding allocations. The Department of Health also needs to be made aware of the impact.

4.6 Indications are that funding for 2005/06 is likely to be even tighter - possibly as much as a 17% (£5.6m) reduction. Therefore, the strategy for 2004/05 is to put in place longer-term savings as well as to try and over-achieve this year's savings requirement and carry forward the balance in order to reduce the impact in 2005/06.

5 Performance targets

5.1 The Revenue Budget 2004/05 report to the Executive Member described in some detail how current service plans would impact on performance targets. It also showed the impact of the proposed allocations of the £14.3m growth (summarised in Appendix 1).

5.2 In 2003/04 the Cabinet agreed to allocate additional funds to help meet the highest priority performance targets. These were:

· 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.

5.3 Some of the additional funding in 2004/05 is also being targeted at these key priorities. As mentioned in the January budget report, there has been additional investment in children's services resulting in some improvement in performance indicators. However, it is felt that this will be a continuing challenge to sustain despite the increase in funding. The most critical indicators are:

· PAF C20 - Reviews of child protection places.

· DIS 1703,1704,1705 - Completion of assessments

· PAF C19 - Health of Looked After Children

· DIS 1206 - Statutory reviews held on time

· PAF A1 - Placement stability

5.4 The additional investment of £0.4m to be considered by the Cabinet on 28 June will help to maintain and improve elements of these indicators, through developing partnership work and targeting increases in foster care and family and friends care. Maintaining improvements in staff recruitment and retention will help to ensure sustained progress.

5.5 The department's management team has already agreed to release £0.5m of the £1.5m contingency for additional investment in children and families services (see paragraph 3.2 above).

5.6 Performance targets will be reviewed on a regular basis and will be reported to both the Social Care Policy Review Committee and the Executive Member for Social Care.

Recommendations

1 That the Executive Member for Social Care agrees the allocations from the department's contingency as set out in paragraph 3.2.

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

3 That the Executive Member for Social Care supports continued representations by officers to the Office of the Deputy Prime Minister and the Department of Health about the unreasonable funding reduction for the Supporting People budget.

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 2004/05

Social Services - Use of Growth Funds in 2004/05