Contact: Matthew Bennion-Pedley Ext 7161 E-mail:[email protected]

1 Executive Summary

1.1 The pressures on Social Services continue to be significant, both in order to meet demand (most notably on services to children and families and to adults with learning disabilities) and to improve services in key performance areas e.g. intensive home care and services for looked after children.

1.2A higher than expected grant (£1.5 million) to compensate the Council for the loss of residential allowance income means that at the end of July the Department was projecting a small revenue underspend of £716,000 (0.24% of budget). As the Executive Member will know however there is often great volatility in demand for some social care services and at the time of writing, the position looks closer to a balanced budget but requiring concerted management action to avoid a deficit. The Director of Social Services is

1.3 This report needs to be seen in the corporate context. The Cabinet will be considering the Council's overall budget strategy on 27 September and its decisions, especially in relation to the transitional cost reserve set up to deal with Pay and Benefit outcomes, will need to be informed by an understanding of overall Social Services pressures. The current budget monitoring position, including the proposed use of contingencies available, will therefore be reported to Cabinet.

1.4 Three specific projects are being recommended for contingency funding at this stage. One is detailed in appendix 5 and the other two are being considered in more detail as separate agenda items. The proposals are:

£209,000 to supplement the capital project proposals for Nursing Home and Nurse Call IT projects - the balance of the capital funding required for these projects is already within existing budgets and ongoing revenue costs of £84,000 p.a. will need to be met from future years' Social Services cash limits.i)

£270,000 to fund the capital project proposals
ii)for IT mobile working

iii) £64,000 to fund a "Careers in Social Care" training scheme (Appendix 5) - full year costs of £250,000, again needing to be met from within future years' Social Services cash limits if the scheme is continued.

1.5 If these allocations are agreed, then the full list of uses proposed for the additional £1.5 million grant confirmed since the previous budget monitoring report (paragraph 1.2) will be as follows:

Purpose	£'000
Local government pay award (0.25% above budgeted 2.5%)	200
Balance of funds required to maintain existing recruitment and retention incentives for new staff	325
Investment in Community Equipment Store to improve performance in area formerly served by Southampton City Council	100
Nursing Home and Nurse Call IT projects	209
IT Mobile Working Project	270
"Careers in Social Care" training scheme	64
Pressures already identified in year	159
Contingency for in-year pressures	173
Total	1,500

1.6 The capital programme is currently on course and within budget. Of its £4,424,000 cash limit, schemes totalling £1,014,000 are already under way; schemes totalling £3,309,000 are planned and £101,000 remains as an uncommitted balance and contingency for inflation.

1.7The Council's investment in social care has led to improvements in performance, particularly for intensive home care and delayed discharges from hospital, which was the major investment priority in 2003/04.

2 Introduction

2.1 This report provides the first budget monitoring details of 2004/05 and shows a projected underspend of £716,000 (0.24%) based upon known activity at 31 July. This is due to a significant increase (£1.5 million) in residential allowances grant compared to the initial budget estimates, which has served to bolster the residue of the £1.5 million contingency created at the beginning of the year to repay a potential overspend in 2003/2004. As advised to the Executive Member in the budget update report presented on 18 June 2004, the contingency was not needed for this purpose since the social care budget delivered a £784,000 underspend in 2003/2004.

2.2 Appendix 1 shows the detail behind the projected underspend. Owing to the increase in residential allowances grant and Cabinet agreement to provide £0.4 million additional investment for services for children and families (28 June 2004), the Social Care cash limit now stands at £298.4 million. As can be seen, although the overall projection is currently a £716,000 underspend, there are already significant underlying budget pressures, particularly in services for children and families and for adults with learning disabilities (see section 3). Putting this another way all the residue of the original £1.5 million contingency plus an element of the recent grant increase (see 1.5) are currently earmarked to offset budget pressures elsewhere. Concerted management action will be needed if these and further pressures are to be contained within existing budgets.

2.3 The report needs to be seen in the corporate context. The Cabinet will be considering the Council's overall budget strategy on 27 September. This will include an assessment of market pressures on jobs across the Council and the extent to which the transitional cost reserve set up to deal with Pay & Benefit outcomes might be used in 2004/05 and subsequently to pay market supplements in pressure areas (i.e. to make increased payments which might otherwise have been rendered unnecessary as a result of the implementation of the Pay and Benefits review process, had that not been delayed). Most of those proposals are likely to relate to Social Services jobs.

2.4 The Cabinet decision will need to be informed by an understanding of overall Social Services pressures in order to assess to what extent any such market supplement costs can be funded from the existing Social Services cash limit rather than from corporate funds. The current budget monitoring position, including the proposed use of contingencies available, will therefore be reported to Cabinet.

2.5 Appendix 2 sets out how 2004/05 growth funds are to be used and identifies the key outcomes expected and forecast impact on performance targets. This is followed in Appendix 3 by an update on Performance Assessment Framework (PAF) indicators. Appendix 4 is devoted to the capital programme.

3 Revenue Budget Pressures

Children & Families

3.1 Pressures on Children & Families' residential purchasing budgets have continued to rise (£1.757 million), primarily as a result of a significant increase in the proportion of children fostered with independent foster agencies (IFAs) rather than with in-house foster carers. The recruitment of more in-house foster carers is one of the most significant challenges facing the Children and Families section and has recently been the subject of a County Treasurer's Department Professional Services review. Cabinet on 28 June agreed a pump-priming investment of £200,000 in this area and the Executive Member will shortly be asked to consider a report setting out options to meet this challenge. The cost of these options ranges from £811,000 to £2,728,000 in a full year but they are designed to be self-financing in the longer term due to the effect they are expected to have on the need for more expensive non-county placement and independent foster agency provision.

3.2 Expenditure on permanent staffing continues to rise but this reflects the Department's success in increasing its practitioner numbers through recruitment and retention measures. An additional £325,000 has been built into the budget for this purpose. Expenditure on agency staff continues to be a concern with projected costs of £533,000 by the end of the year.

3.3 On the positive side of the financial equation is a significant increase in income for the secure unit at Swanwick and reductions in in-house residential care staffing costs (£600,000), although the latter is due to the continued closure of Woodend and Cypress Lodge. At Swanwick the Department has secured an increase in the number of beds purchased on a block basis by the Youth Justice Board. This, along with an increase in the price charged for spot bed purchases will provide an additional £490,000 per year.

3.4 The net effect of these budget pressures, combined with other minor variations, is a projected overspend of £947,000. It is important to note however that if non-county and independent foster agency placements continue to increase, the overspend is likely to be considerably higher.

Adults

3.5 Learning Disabilities is the client group predicting the largest budget pressure at £1,450,000. £550,000 of this is related to the maximum potential impact of reductions in Supporting People contract prices during the year. As reported to the Executive Member on previous occasions, the Supporting People team has been forced to implement cuts of approximately £1.8 million this financial year due to reductions in national grant funding. £550,000 of this will be to schemes offering services to Learning Disability (LD) clients. Work is currently being undertaken to assess the impact of this upon the LD budget. In some cases it may be possible to negotiate a different level of service with scheme providers. In others Social Services will have to assess whether services no longer funded by Supporting People are sufficiently high priorities for the LD budget to make up the shortfall. For the time being the Department is assuming a worst case scenario of having to make good all £550,000. However it is hoped that later in the year we will be able to report an improvement in this position. The remaining £900,000 pressure is merely a reflection of the budget position at the end of 2003/2004. Learning Disabilities finished the year with a £175,000 overspend but the position would have been much worse were it not for a windfall achieved through the reimbursement by Health of £423,000 transitional housing benefit funding relating to 2002/2003 and a one-off contribution from Mental Health of £258,000. Management actions to contain costs in this client group are primarily focusing upon:

· Ensuring that all requests for either above inflation price rises or increases in care packages are properly scrutinised and evaluated

· Implementing a cost management model for block purchase arrangements, working with providers to identify core and additional expenditure, so as to achieve clearly constituted costs.

· Undertaking continuing care assessments in accordance with the agreed toolkit.

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

· Reviewing cases to maximise income both from charging individual service users and other local authorities through contracts we have with local providers.

· Ensuring that provider claims for replacement funding resulting from reductions in Supporting People funding are properly evaluated to ensure that the services being provided match Social Services' eligibility criteria.

3.6 Mental Health are also currently predicting an overspend (£258,000). This is primarily due to increased activity in North and East Hampshire (29 new clients since April 2003) Management action to address this projected overspend is being directed at:

· Developing action plans with locality managers and finance staff to address the overspends in North and East Hampshire, including a review of all residential placements in North Hampshire

· Tighter scrutiny generally of residential care placements, orders and commitments and improved income generation from charging proposals

· Using community care statistics as a more integral part of budget monitoring in order to identify activity trends

· Proposals for an induction, training and development programme to improve understanding of key social services policies and practice issues and their impact on budget management

· A longer term action to develop a residential care and housing strategy to enable more users to move from residential care into supported housing.


3.7 The Physical Disabilities client group is currently predicting a balanced budget, although this would of course be vulnerable if there were a sudden increase in demand.

Supporting People

3.8 The Supporting People programme is on course to deliver a balanced budget, although the potential impact of this upon Learning Disabilities has been explored in paragraph 3.5.

3.9 The Executive Member will recall that in the budget update report presented on 18 June 2004 a bleak outlook was painted for the Supporting People programme (potentially requiring an additional £3.7 million saving in 2005/2006) and the Executive Member wrote to the Deputy Prime Minister to voice Hampshire's concern. An announcement has now been made with national funding being set at £1.72 billion for 2005/2006 and approximately £1.7 billion in 2006/2007 and 2007/2008. This compares favourably to the £1.5 billion previously available but the ODPM has said that £0.1 billion might be held back for national priorities. The settlement therefore still represents a significant and extremely challenging reduction compared to the current £1.8 billion, especially allowing for inflation. It is difficult to assess exactly how this will all affect Hampshire since the government is also to introduce a new funding distribution mechanism in the autumn. However, assuming for the moment equal reductions across the country, Hampshire is likely to lose £1.5m (4.4%) or £2.2m (6.5%) allowing for the likely effects of inflation. Actions are already taking place to make these savings, which need to be identified in advance due to the contractual position.

Older People

3.10 The Older People (OP) team are currently forecasting a balanced budget. Investment is continuing in providing intensive home care and delayed discharge statistics continue to be encouraging (PAF indicator D41). Delayed discharges due to Social Services delays are now averaging 30 (down from 125 in March 2003) and the proportion of all delayed discharges due to Social Services is now 20% compared to 59% in March 2003. This implies fines totalling some £1.1m in 2004/05 (compared to a grant of £1.2 million) and this forecast is built into the budget projections. This and the next few years are of course ones of great change for the OP sector with the advent of 500 new nursing beds and the inevitable disruption to existing residential homes of some of the building work. So far however occupancy estimates for our own residential homes are proving reliable and the first few nursing homes are due to open on schedule. The OP team are therefore relatively confident that a balanced budget will be achieved.

Wessex Youth Offender Team

3.11 Following a funding review in 2003/2004 the YOT's partner agencies agreed a new distribution of funding responsibility. This was due to reduce Hampshire Social Services' contribution for 2004/2005 by £59,000 with further reductions due in 2005/2006 and 2006/2007. Future years' reductions now look less secure and short term funding difficulties in 2004/2005, due to large scale changes that are taking place within Health and Probation Services, have resulted in the Management Board having to request that the two partner agencies that benefited most from the new arrangements (Hampshire Social Services and Police) surrender their 2004/2005 windfalls.

4 Performance Indicators and the Use of Growth Funds

4.1 Appendix 2 sets out how 2004/2005 growth funds are to be used and identifies the key performance targets to be affected. This is followed in Appendix 3 by an update on Performance Assessment Framework (PAF) indicators, following the input of 2003/2004 actual figures. These are subject to formal ratification by the Social Services Inspectorate (SSI) who will publish the national figures in November 2004. At that time it will be possible to identify more clearly how the Council's performance has changed relative to the national picture. However there is strong evidence that the Council's investment in social care has led to improvements in performance, particularly for intensive home care (most recent figure 8.1 per 1000) and delayed discharges from hospital, which was the major investment priority in 2003/2004

4.2 A more detailed report will be submitted to the Executive Member after the figures are released by the SSI.

5 Capital programme

5.1 The current position on the capital programme is shown in Appendix 4. The cash limit for 2004/05 is £4,424,000, including funds carried forward from 2003/04.

5.2 As at 31 July 2004, schemes to the value of £1,014,000 were already under way; schemes totalling £3,309,000 were planned and £101,000 remained as an uncommitted balance and contingency for inflation. However, this position hides a plethora of other schemes (£6 million +) that the Department would wish to see progressed if further funds were available.

5.3 The large capital project to create 500 nursing beds, managed by Property, Regulatory and Business Services, is also progressing well and the first home is due to open later this year.

6. Recommendations

5.4 6.1 The Executive Member is asked to:

i) note the budget position at the end of July, together with the additional pressures highlighted at the meeting

ii) accept reassurances from the Director of Social Services that these additional pressures will be contained and that the Social Services cash limit will be met

iii) agree to the progression of the Nurse Call IT project (item 9) on the basis that it will now be supported by up to £209,000 savings from within the existing Older Persons' revenue and that the Director of Social Services will also ask health colleagues for a financial contribution

iv) agree to the progression of the IT mobile working project (item 7) subject to agreement by the Leader and funding being found by reprioritising a combination of other IT and general capital projects already within the funded capital programme

v) support in principle the progression of the Nursing Home IT project (item 8) but, due to increased costs being presented at the meeting that make this a key decision requiring Leader approval, give this support subject to the Director asking health colleagues for a financial contribution and a further report being prepared setting out revised figures, evaluating other possible options and identifying appropriate sources of funding

vi) agree to the progression of the "Careers in Social Care Training" proposal (Appendix 5) on the basis that the funding required is now to be supported by savings being made elsewhere within the Assistant Director of Resources' revenue budget

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

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