Contact: Sheila Little, 01962 847545, [email protected]

1 Summary

1.1 This report up-dates on the projected end of year spend for 2005/06 as compared to the revised budget for Children's Services. The cash limit for the service for 2005/06 is £782.975m (split £652.996m for Schools Budget, £64.944m for LEA Budget and £65.035m for Children's Social Care Budget). Although a projected overspend against the cash limit of £285,000 is projected at this stage, experience over the last three years suggests that by the end of the financial year, after applying all contingencies, the service will balance within the cash limit.

1.2 The Children's Services revenue budget for 2005/06 supports the corporate strategy aims, specifically maximising life opportunities, achieving economic prosperity and improving services by focusing financial resources in these areas.

1.3 Also, Children's Services contribute to the five outcomes of the Children Act and the revenue budget uses the six priorities established in the Annual Performance Assessment (APA) to set the key performance indicators underpinning the financial strategy.

2 Forecast Outturn 2005/06 up-date

2.1 At the revised budget stage in January 2006 an under spend of £85,000 was projected. Monitoring now indicates an overspend of £285,000. The main changes since January 2006 are discussed in the following paragraphs, with a summary provided for Education services in paras 2.3 to 2.13 and summary for Children's Social Care services in paras 2.14 to 2.18, with the overall position collated in para 2.19.

2.2 A positive figure denotes an over spend as compared to the revised budget, a negative figures denotes an under spend or additional income.

Inclusion and Behaviour (Special Education Needs) +£313,000

2.3 This includes out-county placements (cash limit £7.231m), statements (cash limit £6.753m), Education Otherwise Than At School (EOTAS) (cash limit £6.608m) and inter-authority recoupment (cash limit £618,000).

2.4 Independent (Out-county) special schools +£176,000. Increases in fees accounts for £33,000 of this overspend. The remaining £143,000 being a combination of the continuation of a placement, which had been expected to finish, and changes in costs resulting from pupil turnover.

2.5 EOTAS -£100,000. This reflects income of £100,000, which had not previously been budgeted for, in respect of Emotionally Vulnerable and Unwell pupils.

2.6 Inter-Authority Recoupment +£237,000. This is the net effect of payments to other authorities for Hampshire pupils in their special schools, less receipts from other authorities in respect of their pupils in Hampshire special schools. Placements are settled and payments are made a year in arrears, so the 2004/05 year end position was based on an estimate of placements and expected costs. The amount reported for 2004/05 was an underspend of £91,000, but as a result of differences in pupil numbers, and other authorities increasing their charges, the actual figure was an overspend of £72,000. A continuation of this overspend contributes to the £237,000 estimated overspend in 2006/07.

2.7 The difficulties Hampshire faces with timely financial monitoring due to the retrospective adjustments is a national issue which affects most authorities and is one that the County Council is pursuing with other partners including the DfES.

Home to School Transport +£73,000

2.8 This budget (cash limit £20.94m), continues to be difficult to forecast due, in particular, to the unpredictable nature of the outcome of contract price re-negotiation. A further overspend of £73,000 has been identified between November and December 2005.

Other School Centrally held Budgets +£120,000

2.9 There has been an increase in the number of occasions when schools require support to supplement staffing pressures, resulting in a projected overspend of £120,000 on a budget of £235,000. Officers will be spending time understanding the longer-term implications of this and determining the most appropriate financial implications for schools in the future.

Early Years - Education Payments -£30,000

2.10 The payments to private, voluntary and independent settings for the Spring term have been made during January/ February and indicate 68 fewer pupils than expected for the Spring term (total pupils was 7,800). This results in a reduction of £30,000 of the estimated overspend set out in the January PRC report. Overall the additional take-up for the year produces a projected outturn over spend of £125,000 against a cash limit budget of £19.393m.

ICT -£106,000

2.11 Delays to projects (data warehouse) have resulted in an under spend of £30,000 and a technical adjustment to charges from IT Services has benefited the service by a further £76,000.

Support Services -£70,000

2.12 This is the net effect of a small under spend on salaries totalling £6,000, savings relating to the production of publications £35,000 and unplanned income of £29,000 received following a successful legal case.

Summary for Education Services

2.13 The table below summarises the variations, which show that, excluding the significant under spend on the Early Years Sure Start grant, there is an overall over spend projected of £762,000 (net of general contingency) against the original budget. The strategy will be to continue to manage the budgets to reduce this overspend by the year-end.

Budget Description	Variation from cash limit Jan 2006	Changes from Jan to March	Projected outturn March 2006
	£'000	£'000	£'000
Inclusion and Behaviour (SEN)	+340	+313	+653
Other School Centrally held Budgets	0	+120	+120
Interest on School Balances	-204	0	-204
Home to School Transport	+403	+73	+476
New Early Years Placements	+155	-30	+125
ICT	0	-106	-106
Support Services Recharge	-85	-70	-155
Other minor variations	+38	0	+38
Total pressure	+647	+300	+947
Less : General contingency	-185	0	-185
Net pressure	+462	+300	+762
Less: Sure Start Grant flexibility	-2,547	0	-2,547
Net under spend	-2,085	+300	-1,785

Non-County Placements (NCP) / Independent Fostering Agency (IFA)

+£159,000

2.14 Although there have been no new placements since the figures reported in January, the projected outturn costs have increased by £159,000 as a result of more accurate placement cost information for five existing placements for which only estimates were known in January.

Family Support Services -£85,000

2.15 This reduction in the projected outturn overspend reflects success by front line staff in targeting resources more effectively in making service provision decisions, as a result of firm management action.

Other minor variations -£119,000

2.16 The main variations are:

· Additional income of £25,000 relating to the sale of beds at Swanwick Lodge

· A reduction in agency staff projections of £24,000 have been identified at Merridale Respite Unit, Kingsworthy

· Savings of £35,000 have been identified in the projections in Care Leaver costs due to reviews to the levels of support.

Delivery against Management Targets +£115,000

2.17 A total of £65,000 of the target savings have been achieved, £40,000 relating to family support services, as discussed in para 2.15 and £25,000 relating to the sale of beds at Swanwick Lodge as discussed in para 2.16. This therefore reduces the savings target remaining to be achieved in the final weeks of the year. In addition, however, delays to a placement change from non-county to Linden Avenue (a facility owned by the National Children's Home (NCH) where the authority have a block contract which is cheaper than NCPs), means a reduction in the expected savings by £50,000. Targets still expected to be achieved amount to £350,000.

Summary for Children's Social Care Services

2.18 The table below summarises the overall position, which represents a projected outturn over spend (net of management initiatives to reduce the pressures) of £2,070,000 (an increase of £70,000 from the January reported position) and sets out the developing strategy that is in place to manage the budgets to reduce this overspend by the end of the year.

Budget Description	Variation from cash limit Jan 2006	Changes from Jan to March	Projected outturn March 2006
	£'000	£'000	£'000
Non County Placements (NCP) / Independent Fostering Agency (IFA)	+1,882	+159	+2,041
Legal expenses	+246	-	+246
Family support services	+316	-85	+231
Change for Children	+117	-	+117
Other minor variations	-96	-119	-215
Total pressure	+2,465	-45	+2,420
To be funded by:
Staff savings from specific posts	-50	-	-50
CAMHS planned savings	-75	-	-75
Relocation of NCP to Linden Avenue	-100	+50	-50
Sale of additional beds at Swanwick Lodge	-100	+25	-75
Target savings - for Care Leavers	-75	+25	-50
Target savings - for Children with Disability support	-65	+15	-50
Net pressure	+2,000	+70	+2,070

2.19 The table below summarises the overall projected outturn position across all Children's Services.

3 Business Units

3.1 The latest indications are that in total the Education Business Units balances will increase to a cumulative surplus of £1,653,000. Of the total balances £332,000 relates to Stubbington and Minstead Study Centres to self-fund their building programme agreed as part of their long-term business plan. The business units are projecting that by 31 March 2007 the balance will reduce to £536,000, excluding the two study centres. This is due mainly to two of the six units forecasting short-term deficits in 2006/07 as schools purchase less volume of business and the units downsize and/or re-organise to cover that change in demand. This is in line with earlier budget reports that explained the highly volatile market environment within which business units trade with schools and provide core services to the County Council.

4 Legal implications

4.1 None

5 Financial implications

5.1 A summary of the financial implications are given in Section 2 and will be further reported at the next meeting.

6 Personnel implications

6.1 None

7 Impact assessment

7.1 Race and equality impact assessment has been considered in the development of this report and no adverse impact has been identified.

8 Crime prevention issues

8.1 None

9 Views of the Local County Councillor

10.1 None

Recommendations

1 That the budget monitoring report and identification of budget variations is

noted.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have 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.

List documents here or type `none'.