Contact: Annal Nayyar, Social Services Finance Unit Ext: 7526, email: [email protected]

Contact: Annal Nayyar, Social Services Finance Unit Ext: 7526, email: [email protected]

1. Summary

1.1 The original 2005/06 cash limit for the department was £315.045m. The cash limit will be amended to £314.418m, principally as a result of the deduction of the overspend from 2004/05 (£0.532m).

1.2 There are significant pressures on the cash limit principally arising from the full year impact of pressures arising in 2004/05, which are summarised:

1.3 Given that the budget already contains efficiency savings requirements of £3.1m, and that the flexibility offered by provision of a contingency is already used up in reaching the assessment of £4.4m pressures, strong measures will be needed to bring the budget within the cash limit. Management action, detailed in the report, has already commenced but further, significant management will be required.

1.4 Whilst the Social Services budget is not yet formally split, the Executive Member for Adult Services will be principally interested in the adults element of the spend, a summary pressure of £2.8m. The relevant Directors will take over responsibility at officer level for the Children's and Adult's element in the budget from 15 August, and, as agreed when the 2005/06 budget was set, there will be no virement between Adult's and Children's heads without agreement of the relevant Executive Members.

2. Introduction

2.1 This is the first budget monitoring report for the 2005/06 financial year. It is based on information obtained in the first two months to May 2005 and an assessment of the impact ongoing pressures arising in 2004/05 will have in this financial year. Even with the additional growth of £14.2m (4.5%) provided in the 2005/06 budget, there are already severe pressures on this year's budget.

2.2 Demand is projected to continue to grow in 2005/06, from pressures placed on acute services, whilst children needs tend to be high-cost and so the impact of an increase in the number of children requiring social care has a disproportionate effect on the overall budget. It is also important to note that although investment in preventative action will yield savings in the future , the immediate pressures for the most vulnerable remain and still have to be met

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2.3 As Members will be aware the Directors of Children's and Adults' Services have been appointed with effect from 15 August 2005 and will take on immediate accountability for the Children's and Adults' Services budgets respectively. Until the re-organisation of Children's Services is complete, services will continue to be provided by teams previously accountable to the Director of Education and the Director of Social Services, both of whom have separate budgets.

2.4 During the transitional period, it is necessary for joint budget monitoring arrangements to be implemented in 2005/06, with joint reporting of the current Social Services budget monitoring to both the Children's and Adult Services Management Teams and Executive Members. Joint arrangements for defining the 2006/07 budgets for Children's Services are also necessary to ensure all pressures are identified, with separate budgets for Children's and Adults Services being reported from 1 April 2006

3. 2005/06 Cash Limit

3.1 Since the cash limit was agreed by the County Council in February 2005 as £315.045m the following movements have occurred:

3.2 The deduction of the £0.532m overspend is from a £1.3m contingency that was included in the 2005/06 budget specifically for this purpose and to fund any new pressures arising in 2005/06. In accordance with this the remaining £0.768m in the contingency has been allocated pro rata to the divisional budget pressures that occurred in 2004/05 that are ongoing into this year (i.e Children & Families £0.308m and Adults / Older People divisions £0.460m).

4. Forecast Outturn 2005/06

4.1 It is still an early stage in the financial year with relatively limited information available, and budget monitoring has been further complicated by problems associated with the roll-out of SWIFT (an action plan is in place to tackle these issues). However against this backdrop there are already indications of significant budgetary pressures on the department. These will require prompt and significant management action if expenditure is to remain within the overall cash limit. The pressures, details of savings proposed or achieved and planned management action are summarised below by client group:

Children and Families

4.2 There is a net pressure of approximately £1.6m within this area. £0.4m is the full year effect of pressures arising in 2004/05 after the 2005/06 budget build process was completed. £0.8m is predicted to arise from children looked after in Non County Placements (NCP's) and Independent Fostering Agencies (IFA's) - In the first two months of the year there has already been a net increase of 9 placements. In addition the pilot Foster Care project has dealt with four children who would have otherwise required NCP or IFA placement . It is also anticipated that four additional children will need to be placed in the next two weeks. The main reasons for this increase in demand are the ongoing pressure in Children with Disability (CWD) and children who have not been moved from extended placements in CWD units. A pressure of £0.4m is also predicted from staffing and related costs within Commissioning and Social Work and £0.3m will arise from Other Children and Families expenditure (principally relating to a larger than anticipated number of care leavers than was originally budgeted for).

4.3 This net pressure of £1.6m includes savings of £0.2m on supported lodgings and in house units. Other management action is required and is planned to include increased use of fostering and reduced purchasing from elsewhere and examining the scope for service reductions.

Adults

4.4 The total pressure within all adult client groups is in the region of £4.1m. This is principally made up of a pressure of £3.7m on Adults with Learning Disabilities (£2.7m arising from the full year effect of 2004/05 pressures on placements and domiciliary care due to increased care needs, reluctance of health to accept responsibility for funding under continuing care and loss of supporting people funding that are expected to be repeated this year and £1.0m additional costs due to the transition of children into adults. This pressure from transition is an estimate based on data from the previous financial year, where approximately 30 new clients arise in this manner at a typical cost of £35,000 p.a. and £0.4m on Adults with a Mental Health Needs (across all service areas).

4.5 Management action that is being progressed so far includes the following:

· Closer links with PCT's to increase their funding of placements where there is a health focus under the continuing care criteria

· Increasing the amount of Independent Living Fund (ILF) applied for wherever possible

· Minimise the cost of transition by ensuring children currently in high cost placements have cost effective care plans when transferring to adults

· Reducing the use and cost of transport by 5%

· Increasing income from non residential charges where possible

· Review domiciliary care with the intention of increasing the use of more cost effective block contracts

· Ensuring effective use of day services

· Holding vacancies and reducing the use of agency staff

· Considering the replacement of respite provision in one Learning Disability residential unit by long term care

· Exploring the opportunities for mitigating the Supporting People cost impacts on Learning Disability budgets.

4.6 The savings from these measures are yet to be accurately quantified but current data suggest that they will broadly be in the region of £1.0m (which combined with the allocation from the contingency of broadly £0.3m referred to in paragraph 3.2 will give a net pressure of £2.8m) and it is certainly prudent to assume that they will not offset the pressures described above in full. Therefore these new spend requirements are being investigated further to see if they can be avoided and additional management action will need to be taken which may have an adverse impact on service delivery and performance indicators.

Older People

4.7 There are significant pressures within the older people sector due in the main to pressures carried forward from 2004/05 over and above 2005/06 allocated growth. The full year effect of these are broadly estimated to be in the region of £1.3m and although systems issues have prevented a recent assessment of actual activity, it is unlikely that activity levels have fallen since December and if the December level is projected into 2005/06 then that would lead to the estimated overspend. Also pressures arise across the purchased domiciliary care and direct payments budgets. In addition to this there is a need to make efficiency savings of £1.5m. Whilst at this stage this target is expected to be met, any shortfall will increase the overall pressure.

4.8 Management action has been initiated to balance the budget based on target activity. This will involve a reduction in purchasing basic residential and very dependant residential packages (reducing packages by 170 will save up to a net £1.6m), although some growth in residential EMH packages is anticipated. The planned opening of the new in house nursing provision is expected to increase nursing bed capacity by an average of 170 across the year: if demand does not increase, that will reduce the number of external purchased placements by 170 (with the planned saving of £2.7m already being incorporated into the forecast, otherwise a pressure in the region of £4.0m would be reported). All in house services (residential and home care) are expected to balance their budgets. Based on this strategy it is assumed that the cash limit will not be exceeded but progress in implementing the plan will be monitored and any variance reported accordingly.

4.9 Given the uncertainties involved and the need to contribute if possible to meeting the overall pressures, it is proposed to look at options for increasing income from non-residential charges, which relate mainly (but not wholly) to older people.

Management and Resources

4.10 Initial indications are that pressures identified so far of £0.7m due to additional costs of the Swift/SAP training and interface issues, Financial Assessment and Benefits (FAB) team and IT costs will be contained within the overall budget through savings on premises, vacancy management and more effective management of IT access and usage. The level of savings will be monitored on a regular basis and any further action required will be put in place.

5. Management Action

5.1 As highlighted in the relevant sections, management action is being taken and possible further actions considered, as actions currently in place will not be sufficient to offset the pressures. Some assistance may also be available through the receipt of reward grant from the department's performance in the first round of Local Public Service Agreements: a report to Cabinet on 25 July will set out the approach intended and the outcome will be reported orally.

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 rel2ied 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