Contact: Sheila Little, (01962) 847545; [email protected]

1 Summary

1.1 This report is the regular budget monitoring report for the financial year 2006/07 and shows there is an overall overspend of £3.044m for Children's Services at period 8 (end of November 2006). However, after implementation of the department's recovery plan, there is a projected net pressure on the Children's Services budget of £1.061m made up as follows:

1.2 The 2006/07 budget position as at period 7 (October) was presented to the Executive Lead Member for Children's Services on 15 December 2006. The report gave details of an underlying pressure of £2.784m, offset by a recovery plan showing £1.483m savings (including £1.183m relating to services and the use of £300,000 of Business Unit balances).

1.3 The underlying forecast outturn at the end of period 8 (November) shows a pressure of £3.044m, an increase of £260,000, the majority of which relates to Children Looked After. Savings from the recovery plan are being achieved (£1.483m), leaving a projected pressure of £1.561m.

1.4 Following a review of the children's centres revenue funding, a report on which was submitted to Schools Forum on 12 December 2006, it has been possible to identify £500,000 of General Sure Start Grant (GSSG) that can be used to offset 2006/07 budget pressures. This can be done by charging two elements of expenditure to the grant, as follows:

· Charge allowable early years expenditure from the LEA Budget of £340,000 in 2006/07 giving an under spend on early years strategic management that can then support the pressures elsewhere on Children's Services for 2006/07

· To apply £160,000 of the allowable early years expenditure from within the Schools Budget for 2006/07 to GSSG.

1.5 This leaves a budget pressure of £1.061m. Options for charging up to a further £500,000 to GSSG are being explored and, if identified, would reduce the overall revenue budget pressure to £561,000.

1.6 A separate budget report on this agenda considers the implications of this in the context of the forward budget proposals for 2007/08.

2 Revenue Budget Monitoring 2006/07 as at 30 November 2006 (Period 8)

2.1 Details of the main variances and changes since period 7 are shown in the table below and summarised in the following paragraphs:

	Adjusted Original	October 2006	November 2006	Movement
	Budget	Variation	Variation
Cash limited expenditure	2006/07
	£'000	£'000	£'000	£'000
Schools Budget
Out-County	7,357	+480	+480	0
Statemented Pupils	7,454	-400	-400	0
Inter LEA Recoupment net	634	+225	+225	0
EOTAS	5,611	+150	+150	0
School Catering	133	-6	-6	0
LMS contingency	3,376	+64	+64	0
Total Schools Budget		+513	+513	0
LEA Budget
Home to School/College Transport	21,439	+417	+417	0
SEN Audit moderation	54	-24	-24	0
Interest on school balances	-853	-127	-127	0
Youth Service	5,946	-25	+23	+48
Departmental strategic and support services	27,531	+154	+154	0
Unallocated budget adjustment	115	-115	-115	0
Other continuing education	512	-27	-8	+19
Training and Curriculum Development (LEA Budget)	6,017	-9	-9	0
Total LEA Budget		+244	+311	+67
Children's Social Care Budget
Commissioning and social work	17,858	+434	+335	-99
Children Looked After	31,416	+1,909	+2,165	+256
Family support services	6,470	+502	+480	-22
Youth Justice	2,345	-72	-111	-39
Other children and families services	5,919	-562	-568	-6
Management and support	-338	-184	-81	+103
Total Children's Social Care		+2,027	+2,220	+193
Total Children's Services		+2,784	+3,044	+260

Schools Budget

2.2 Within the Schools Budget there are no changes in forecast variations since period 7.

Out County Special Schools +£480,000

2.3 This represents 6.5% of the cash limit of £7.357m. The main pressure is fee increases in 2006/07 which have ranged from 5% to 17%. Placements and expenditure are closely scrutinised by the County Placement Group.

Other Special Education Needs (SEN) -£400,000

2.4 Based on updated pupils at the beginning of the Autumn Term, a -£400,000 saving (5.4% of the cash limit of £7.454m) is forecast. This is in line with the outcome for the 2005/06 low incidence statement budget, which was not identified until after the budget for 2006/07 was set. This will be used to off-set the pressures on the Out County Special Schools budget.

Inter Local Authority Recoupment +£225,000

2.5 The budget of £634,000 reflects the net cost of the movement between Hampshire and other local authorities for special school and special unit places. The variation represents 35% of the net budget or 8% of gross payments (approximately £2.8m).

2.6 The pressure has arisen due to a combination of reasons, but is primarily as a result of late notification of pupil movements in 2005/06 (+£100,000) and above inflation charge increases for 2005/06 by other local authorities, (+£110,000).

Education Otherwise Than At School (EOTAS) +£150,000

2.7 This represents 2.7% on a cash limit of £5.6m. The main pressure relates to additional supply cover, required as a result of long-term sicknesses and to meet the requirements of individualised packages.

Catering -£6,000

2.8 This reflects an adjustment to the expected saving and is the result of an anticipated increase in income from milk sales.

Local Management of Schools (LMS) Contingency +£64,000

2.9 The overspend is 1.9% of the cash limit of £3.376m and includes£20,000 in respect of adjustments for temporary classroom rentals relating to 2005/06, £41,000 for extra 2006/07 costs associated with extra pupils admitted to Elvetham Heath Primary School, and£3,000 in respect of retrospective pupil number claims for special schools.

LEA Budget

2.10 There is an increase of £67,000 since period 7 as detailed in the paragraphs below.

Home to School/College Transport +£417,000

2.11 No change since period 7.

2.12 This forecast represents 1.9% of the cash limit of £21.439m. The significant elements are:

· increased contracted hours for escorts +£60,000. (changes to routes, and an increase in the number of escorts for set routes)

· Increased contract costs +£841,000. (inflation, catchment schools being full, net effect of pupil movements, and complex needs, offset by spend to save savings)

· Season tickets and income +£33,000. A £7,000 pressure on season tickets, and £26,000 less income from other local authorities

· Applying the Home To School Transport contingency -£517,000.

SEN Audit Moderation -£24,000

2.13 No change since period 7.

2.14 The projected underspend is 44.4 % of the cash limit of £54,000. The SEN Audit for which this budget is intended has stopped, hence this estimated saving.

Interest on School Balances -£127,000

2.15 No change since period 7.

2.16 The projected underspend is 14.9% of the cash limit of -£853,000 and arises from increased balances and an increase in interest rates.

Youth Service +£23,000

2.17 This variation, which equates to 0.4% of the cash limit of £5.946m, has increased by +£48,000 since period 7. This has occurred as a result of clarification of the contribution to the Youth Offending Team after the budget preparation.

Departmental strategic and support services +£154,000

2.18 No change since period 7.

2.19 This projected overspend is 0.6% of the cash limit of £27.531m and is mainly due to a combination of Change for Children project costs and other minor variations.

Unallocated Budget Adjustment -£115,000

2.20 No change since period 7.

2.21 This represents the full balance of the budget and will be used to offset overspends elsewhere within the Children's Services Department.

Other Continuing Education -£8,000

2.22 A saving of £8,000 is in respect of costs related to enhanced pensions for Further Education and Higher Education staff for early retirements when they were part of the County Council (prior to the changes in 1989 and 1993).

Training and Curriculum Development (Standards Fund) -£9,000

2.23 No change since period 7.

2.24 This saving is 0.1% of the cash limit of £6.017m and reflects a number of minor adjustments made to the base budget.

Children's Social Care

2.25 There is an increase of £193,000 since period 7 as detailed in the paragraphs below.

Commissioning and Social Work +£335,000

2.26 The projected over spend is 1.9% on a cash limit of £17,858,000. This has reduced by £99,000 since period 7. The pressure has arisen due to a number of factors, including the on-going cost of the seconded Data Quality Project Officers until March 2007, the net effect of pressures from staff being appointed above the budgeted midpoint on the pay scales, recruitment bonuses and market supplements.

Children Looked After (CLA) +£2,165,000

2.27 A paper presented to the Children and Young People Policy Review Committee on 12 December 2006 (Non County Placements & Independent Fostering Provider Placements) presents an up-to-date summary of trends in CLA in detail, while the graph below shows the recent trends:

2.28 This overspend, which has increased by £256,000 since period 7, is made up of the following:

Non-County Placements (NCPs) +£837,000

2.29 This pressure represents 9.6% of the cash limit of £8,754,000 and reflects the growing complexity, and consequently costs, of children's needs. There is an increase of £103,000 since period 7.

2.30 There has been a reduction of three NCP placements since period 7 from 62 to 59. All related to children who are now 18 years of age, and have transferred to Adult Services. As these were planned placement endings, no additional savings have been achieved within period 8 as the reduced placement costs had been reflected within the forecasted expenditure reported in previous periods.

2.31 The increase in pressure reported includes the impact of two placement provisions where actual costs of care packages have exceeded the initial estimates.

Independent Fostering Agencies (IFAs) +£785,000

2.32 This represents a pressure of 14.3% on a cash limit of £5,503,000. This is an increase of £69,000 since period 7.

2.33 The number of IFA placements has reduced by six since period 7 from 139 to 133. Within this net reduction, two new placements have been made, and eight have ended. Additional costs in respect of the new placements, together with the actual costs of five IFA placements exceeding the initial estimates, (three as a result of an extending the placements), have resulted in the increase of £69,000 since period 7. Of the eight ceased placements, only two of these released any savings against the pressure reported in period 8, as all other placements had been included as planned endings within the previous periods forecast.

2.34 There has been a net reduction of ten NCPs, and a net increase of twenty two IFA placements since the start of the financial year. This is illustrated within the following table, while the average number of NCPs and IFAs has been 65 and 129 respectively:

Residential Children's Homes +£111,000

2.35 This represents a pressure of 1.4% on a cash limit of £7,951,000 and is an increase of £5,000 compared with period 7. A significant amount is due to increased operational costs in 2006/07 following reduced occupancy levels during 2005/06, as a result of some homes operating with a reduced number of beds, partly due to staff vacancies and sickness during the year. An increase in pay costs has occurred as a result of many staff vacancies now being recruited to, with homes now operating to their full bed capacity.

Fostering Service +£495,000

2.36 This is a pressure of 5.6% on the cash limit of £8,828,000 and is an increase of £139,000 compared with period 7. The majority of this pressure relates to a review of the estimates of allowances paid to foster carers.

2.37 The number of children placed within in-house foster placements remained relatively stable at the start of the financial year at approximately 590 placements, but has since reduced over October and November to 560 placements. The increase in pressure since period 7 does not therefore reflect an increase in the number of placements, but represents work which has been undertaken to further review the accuracy of forecasted expenditure for 2006/07.

2.38 The authority's desire to increase in-house foster care capacity has also led to further pressure within the family placement teams as they try to recruit to all vacancies in order to maximise support and capacity for the in-house carers, therefore reducing dependency on external providers0

Other Residential -£63,000

2.39 This represents a projected underspend of 16.6% on a cash limit of £380,000, a change of -£51,000 compared with period 7.

2.40 The majority of this expenditure relates to care leavers who are placed in supported lodgings and other accommodation. Where these are asylum seekers a significant proportion of the spend is reclaimable from the Home Office.

Family Support Services (Direct Payments, Day Care, Under 8s, Home Care, equipment and adaptations) +£480,000

2.41 This represents a pressure of 7.4% on a cash limit of £6,470,000, a reduction in pressure of £22,000 since period 7.

2.42 Most of these budgets are used to support children with disabilities. The main variations relate to an increase in projected expenditure through Direct Payments (£175,000), home care services (£178,000), and other preventative family support services (£221,000).

Youth Justice -£111,000

2.43 The under spend, an increase of £39,000 compared with period 7, is 4.7% of the cash limit of £2,274,000 and relates primarily to Swanwick Lodge secure unit where there is a reduction of expenditure on agency staff compared to last year, and the overall under spend reflects the use of more casual staff and the continued reduction in long-term sickness.

Other Children's Services -£568,000

2.44 The under spend is 9.6% of the cash limit of £5,919,000 and has increased by £6,000 since period 7. This largely reflects three areas where budgets were set up at the start of the year that need to be re-allocated (Youth Justice, Quality Protects and Asylum Seekers).

Management and support -£81,000

2.45 The projected under spend is 1.1% of the cash limit of £7,350,000 (gross figure before recharges). The under spend, which arises mainly from holding vacant some senior manager posts, has reduced by £103,000 since period 7 after taking into account some one-off costs in respect of pension contributions.

2.46 Management and Support includes the budget for legal services of £766,000, against which £916,000 is currently forecasted to be spent (an overspend of £150,000)

3 Impact assessment

3.1 The proposals contained in this report are not considered to be discriminatory although work will be developed to ensure that the implementation of the recovery plan does not have an adverse impact.

Recommendations

The Executive Lead Member for Children's Services is recommended to:

1. Note the projected outturn position for 2006/07 for the department

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. - none