Budget situation - a note from John Clifton

to all Adult Services staff

You may have read in local newspapers about the County Council's recent debates on the 2006/07 budget - coverage has been extensive. You may also have read about the outcome of these debates in the article currently posted on the front page of Hantsnet by Jon Pittam, the County Treasurer http://www3.hants.gov.uk/finance/budget/corpfin0607budget.htm. You will have got a clear understanding of the difficulties that the Council is having to deal with as a result of a very poor financial settlement from the Government and a strict limit on the extent to which it can increase the amount of money raised from Council Tax. Jon Pittam's article is fittingly entitled `a budget of tough choices in hard times'.

Another major source of financial pressure on the Council is the Adult Services budget. We are forecasting an overspend of between £10-£12m for 2005/06. I am hopeful that this figure may come down as the end of year approaches and as we rigorously audit March payments and commitments - an exercise to which we can all contribute - but it is extremely unlikely that we will balance the books. We are more likely to be entering a new financial year with an overspend to repay which greatly exceeds the £2m we had set aside in the 2006/07 budget as a contingency.

Increased client numbers and care costs are not only part of the problem for this year but will continue to be a challenge in the future. The departmental restructuring and service remodelling, which is part of the White Paper, gives us an opportunity to look at the way we provide services and put in place a structure which takes into account the tension between growing demand and financial constraints. Partnership working with voluntary agencies as well as Health will be major factor in how we leverage more by sharing resources and partnership working.

While the Council has been extremely supportive - recognising the service pressures we are under - and is doing all it can to make more resources available, there is a clear limit to the support we can expect. A £10-£12m overspend from us makes it very difficult for the Council as a whole to balance its budget, bearing in mind the many other financial pressures with which it is having to deal. While we work towards a structure which fits the future, in the short-term - for the remainder of this year and next financial year - all of us have got to do our bit - avoiding spending which is not absolutely necessary wherever possible and ensuring that the Council's income is maximised, for example through a rigorous application of charging criteria

When we talk in millions, it can be difficult to see what a difference we can make as individuals. To give a couple of examples - a year's care in a residential unit costs between £17,000 and £22,000, so 50 additional placements across the county equals £1m or if each of our 300 care managers supply an extra hour's home care a week for just one of their service users, the extra cost would be over £200,000 a year.

So, we can all make a difference, if we put our minds to it, whether that is by minimising photocopying, by avoiding car journeys or by prompt reviewing of service users' care packages

We will not be able to avoid a large overspend this year, but we still need to be doing all we can to reduce it as much as possible so that we start the new financial year in as strong a financial position as possible. The new financial year does not mean the slate is wiped clean. This is why the spending restrictions we currently have in force - including, detailed scrutiny of requests to fill vacancies; assumptions against replacing furniture and equipment; thorough review of training and attendance at courses - will continue for the foreseeable future.

It is vital that overspends of this size do not recur, or we lose the confidence of elected Members. As it is, the Leader has called for a detailed external audit of the Department's financial management and this will take place during March and April.

I am aware that the current situation puts an additional pressure on all of us, particularly for staff working directly with service users and carers. However, I ask for - and expect - your full co-operation. It is only by working as a team that we will be able to find our way through these exceptionally difficult circumstances.

John Clifton

Deputy Director of Adult Social Services

2 March 2006