Contact: Gordon Shinn, (01962) 847545; [email protected]

1 Summary

1.1 This is the fifth revenue budget monitoring report for the financial year 2007/08, showing a forecast year end underspend of £1,885,000 as at 31 January 2008 (Period 10). This is made up of a forecast underspend of £1,552,000 on the Schools Budget and a forecast underspend of £333,000 on non-schools budgets (after applying one-off funding totalling £624,000), as shown in the tables below:

	Period 8	Period 10	Change
	£000	£000	£000
Schools	-1,173	-1,552	-379
Non-schools	+624	+291	-333
One-off funding	-624	-624	0
Net non-schools	0	-333	-333
Total	-1,173	-1,885	-712
Analysed by Branch:
Performance & Resources	-940	-912	+28
Education & Inclusion	-108	-510	-402
Children & Families	-125	-463	-338
	-1,173	-1,885	-712

1.2 Period 8 (October) figures were reported to the Executive Lead Member for Children's Services (Education) on 23 January 2008.

1.3 The non-schools budget would show a forecast £291,000 overspend were it not for the one-off funding that is being applied to achieve the current position. As this is one-off funding in 2007/08 only, it means that there is an ongoing pressure in 2008/09 and this has been addressed within the three year budget proposals approved by the County Council on 21 February 2008.

1.4 Forecast variances have been adjusted to reflect decisions made to carry forward grant-related underspends to be added to the 2008/09 budgets. For the Schools Budget the following carry forwards were agreed at Schools Forum on 15 February:

· Combined Budget -£280,000

· Children's Centres - £1,400,000

· Early Years - £131,000.

1.5 The balance of the forecast Schools Budget underspend, after taking account of these items, is £1,552,000 as shown above. As these budgets are ring-fenced, the actual level of underspend will be carried forward to 2008/09 as part of the final accounts process.

1.6 The additional savings within the non-schools' budgets reflect the continued management action to manage down pressures in order to minimise the impact on 2008/09 and are also as a result of increased vacancies and difficulties in staff recruitment, particularly social work staff in the south east of Hampshire (both employees and agency staff). Some of these vacancies have been held pending re-organisation within the social care teams. However, recent recruitment exercises appear to have been more successful and, with improved salaries available through Pay & Benefits and following the re-organisation, it is anticipated that the extra investment included in the 2008/09 budget will be fully utilised.

1.7 The County Council's policy is that 50% of any service `unplanned underspend' would normally be available to that service on a one-off basis in the following financial year. Therefore, according to current forecasts, £167,000 (being 50% of £333,000) would be available to Children's Services to carry forward to 2008/09.

2 Recommendation

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

1 Agree the current financial issues that are being addressed within the 2007/08 budget.

3 Revenue Budget Monitoring 2007/08 at 31 January 2008 (Period 10)

3.1 The full analysis of the current adjusted cash limit and variances is shown in Appendices 1 (a) and 1 (b), with 1 (a) showing the analysis between the Schools Budget and non-schools budgets. The following are the most significant reported variances by Branch:

3.2 The following paragraphs provide explanations for the forecast variances.

Performance and Resources Branch Budget

Pay Reform Payments
Cash Limit £19,208,000 Variance -£150,000 (-0.8%)

3.3 This relates to performance-related payments to teachers and is the latest estimated position. Some payments relating to 2007/08 may be paid in 2008/09.

LMS (Schools) Contingency
Cash Limit £4,087,000 Variance -£760,000 (-18.6%)

3.4 This is an increase in underspend of £205,000 since Period 8, which is the result of further school budget share allocations and some additional income. The significant underspend is mainly due to the budget being increased with unallocated Dedicated Schools Grant (DSG) arising from underspends in 2006/07. This was agreed for carry forward but subsequently omitted when the 2007/08 budget was prepared. Schools Forum has agreed that this should be kept centrally to offset pressures which may arise.

Home to School Transport
Cash Limit £22,206,000 Variance +£276,000 (+1.2%)

3.5 The pressure of £276,000 is made up as follows:

3.6 The total number of contracts is currently 1,335, compared with 1,302 previously reported in November and 1,322 a year ago.

3.7 The increased costs are mainly associated with children with Special Education Needs (SEN), the largest element of which relates to the Education Inclusion Service.

Premature Retirement
Cash Limit £2,787,000 Variance -£100,000 (-3.6%)

3.8 This is based on the latest review of commitments against the budget. There is no change since Period 8.

Education and Inclusion Branch Budget

Early Education and Childcare Unit
Cash limit £14,744,000 Variance -£239,000 (-1.6%)

3.9 There have been a number of changes since Period 8, which have resulted in this projected underspend. The budgets and commitments have been reviewed in order to maximise the use of ring-fenced grant and minimise the possibility of any grant having to be repaid. The £239,000 projected underspend is on `core budgets' within the Dedicated Schools Grant (DSG) and, as such, is eligible to be carried forward to 2008/09.

3.10 In addition to this Schools Forum has agreed that £131,000 of DSG expenditure chargeable to General Sure Start Grant (GSSG) can be carried forward to assist with the pressures due to the reduction in grant in 2008/09.

Payments for 3 and 4 year olds
Cash Limit £24,548,000 Variance -£210,000 (-0.9%)

3.11 This budget relates to 3 and 4 year olds in Private, Voluntary and Independent Schools. The position after the spring payments shows a forecast increase in underspend since period 8 of £60,000.

Education Inclusion Service
Cash limit £7,813,600 Variance +£190,000 (+2.4%)

3.12 This forecast has increased by £10,000 since Period 8. Details of the underlying pressures were given in the Period 7 report, presented to the Executive Lead Member for Children's Services (Education) on 10 December 2007. Briefly, these were:

· Increasing demand for the services

· Several special cases requiring 1:1 tuition

· Use of agency staff to cover vacant posts

· Establishment of a new team to undertake preventative work in schools in the Basingstoke and Deane area

· The impact of `day 6' legislation.

Education for Children Looked After
Cash limit £932,000 Variance -£131,000 (-14.1%)

3.13 As previously reported, the team is undergoing a review which will result in a significant restructure of the staffing that is due to be implemented in April 2008.

3.14 There is an increased underspend of £19,000 since period 8, which reflects the posts being held vacant pending implementation of the new structure.

Children and Families Branch Budget

Statemented Pupils
Cash Limit £7,827,000 Variance -£388,000 (-5.0%)

3.15 This forecast underspend consists of:

3.16 The number of mainstream low incidence statements as at January 2008 reduced since April 2007 (from 902 to 868). This is an increase of 10 since September 2007. This is significantly lower then the Spring term in the previous year.

Term	2007/08	2006/07
Summer (April)	902	909
Autumn (September)	858	861
Spring (January)	868	916

Inter-authority Recoupment +£266,000 (+%)

3.17 This is an increase of +£231,000 since period 8 and is due to the delayed notification of placements for recoupment.

3.18 The variance reported against inter-authority recoupment has arisen due to the increasing number of Hampshire pupils who are supported within other local authority schools.

	Number of OLA pupils in Hampshire Schools			Number of Hampshire Pupils in OLA Schools
Term	2007/08	2006/07		2007/08	2006/07
Summer (April)	137	Unknown		195	Unknown
Autumn (September)	127	130		203	190
Spring (January)	132	137		209	193

Out of County Special Schools
Cash limit £8,281,000 Variance -£380,000 (-4.6%)

3.19 The forecast underspend consists of:

	November Variation £'000	January Variation £'000	Movement £'000
Out County Special School Placements	-440	-500	-60
Pre-School placements for 3 and 4 year olds	+150	+120	-30
Total	-290	-380	-90

3.20 The average number of children placed in Out County Placements during 2007/08 has reduced slightly from the previous year (from 224 to 221).

Term	2007/08	2006/07
Summer (April)	228	237
Autumn (September)	214	220
Spring (January)	221	214
Average across year	221	224

3.21 The forecast expenditure for 2007/08 includes assumptions around future placements which may be made during the remainder of 2007/08, and the estimated recharges for joint funded placements.

3.22 The SEN service has been successful in challenging annual fee increases for SEN pupils during 2007/08, and this, together with ongoing work to negotiate fee refunds, has contributed to the reported underspend.

3.23 The overspend reported against pre-schools has resulted from an increase levels of 3 and 4 year olds supported by SEN.

3.24 In addition to increasing placement numbers, the final invoices received from other local authorities in respect of charges for 2006/07 are higher then originally estimated. This has therefore also impacted on the estimated charges for 2007/08.

Inclusion (broken down into major component parts)

- Combined Budget (Locality Teams & CAF)
Cash Limit £1,600,000 Variance £NIL

3.25 The underlying underspend is £280,000. However, the variance has been adjusted to reflect the agreement by Schools Forum (15 February 2008) to carry forward this underspend to 2008/09. The cash limit will be adjusted accordingly in the year end accounts.

- Locality Teams (Education Welfare Service)
Cash Limit £1,620,000 Variance -£136,000 (-8.4%)

3.26 This is an increase in underspend of £12,000 since Period 8 following a review of staffing forecasts and vacancy assumptions.

- Special Education Needs (SEN) & Specialist Teacher Advisers (STA)
Cash Limit £5,510,000 Variance +£490,000 (+8.9%)

3.27 This is an increase of £99,000 compared with Period 8. The overspend was previously £719,000, reflecting the former Vulnerable Children grant that was absorbed into the Children's Services Grant and was offsetting pressures in Family Support (see below).

3.28 Schools Forum has agreed to fund some of these preventative and early intervention services from the Schools Budget in 2008/09, allowing the services to continue.

Commissioning and Social Work
Cash Limit £12,491,000 Variance - £640,000 (-2.3%)

3.29 This position reflects the difficulties in recruiting to a number of posts (both in-house and via agencies. Recruitment to the various fieldwork teams is also being considered as part of a countywide review of social work teams (spans of control etc) and the impact of the implementation of Hantsdirect.

3.30 The underspend has increased by £359,000 since Period 8. This is as a result of a review of assumptions on recruiting to vacant posts, as it is proving difficult to fill vacancies even through agency appointments, particularly in the South-east of the county.

Children Looked After
Cash Limit £30,590,000 Variance +£314,000 (+1.0%)

3.31 The numbers of full-time Children Looked After has reduced from 1,034 as at March 2007 to 1,004 as at January 2008. This is a further reduction of 16 since November (from 1,020).

3.32 The average number of full-time Children Looked After during 2007/08 is the lowest over the last four years.

3.33 Funding previously allocated for Children Looked After has therefore been used to address the pressures in other areas of service provision (£1.1m). i.e. Family Support Services and Edge of Care.

3.34 The graph below shows the recent trends and the total number of children looked after. A breakdown of these figures is provided in Appendix 2.

3.35 The overall forecast outturn is broken down as follows:

Purchased Residential Care (Non-County Placements) +£171,000

3.36 This represents +2.0% of the cash limit of £8,557,000, which is a reduction of £234,000 compared with period 8. Average numbers (about 58) have been slightly higher than budgeted (57) but nonetheless represent an overall reduction in numbers and costs compared with 2006/07 (total cost £9.2m, average of 65 placements). The unit cost is about £150,000 per annum.

3.37 The number of children placed in NCPs has remained at 56 (excluding block and respite placements), with three new placements and three having ended.

Independent Fostering Providers (IFPs) +£164,000

3.38 This represents +2.6% of the cash limit of £6,451,000. This is an increase in forecast expenditure of £64,000 since period 8.

3.39 The budgets have been set in line with anticipated average activity for 2007/08, based on previous years' trends and expectations around achievements from the LPSA in-house fostering investment project. However, activity for purchased fostering placements has been higher than budgeted for. The budget had been based on expectation of an average of 143 placements during 2007/08. Actual numbers have been higher than this at an average of approximately 147 placements (at a unit cost of approximately £47,000 per annum).

3.40 The reduced number of children placed within in-house foster care has resulted in higher then anticipated number of children needing to be placed within higher cost purchased fostering placements.

3.41 There has been a net increase of two children placed within independent fostering provider placements since period 8, from 145 placements to 147. Within this net increase, 14 new placements have been recorded, and 12 have been confirmed as ceasing. This is illustrated within the following table:

3.42 Work is on-going around re-negotiating some high-cost NCP costs, as well as following up continuing care funding agreements with Health and seeking other agency contributions/responsibility, some of which should result in reduced costs against existing placements

Residential Children's Homes -£133,000

3.43 This represents an underspend of 2.1% on a cash limit of £6,462,000, a reduction of £92,000 since period 8. The reduction in forecast expenditure has occurred as a result of further reviewing the agency and other staff forecasts for the remainder of the financial year.

Fostering Service +£207,000

3.44 This is an overspend of 2.4% on the cash limit of £8,812,000 and is a decrease of £27,000 compared with period 8. The breakdown of the overspend compared with period 8 is as follows:

	November 2007 Variation £'000	January 2008 Variation £'000	Movement Nov - Jan £'000
Family Placement Teams (Staffing)	0	-80	-80
Family Placement (Skills Fees)	-18	-11	+7
Fostering Allowances and other payments	+252	+298	+46
	+234	+207	-27

3.45 Based on the number of payments going through SAP to foster carers, the average number of children placed with HCC foster carers has increased to 561 at the end of January 2008 compared with 558 at the end of November. This change has resulted in an overall increase of 20 placements since 31 March 2007. Further details are provided in Appendix 2. The average number during 2007/08 is 543, compared with 569 in 2006/07.

Other Residential -£95,000

3.46 This represents a projected underspend of -24.8% on a cash limit of £383,000. This an increase in underspend of £1,000 since period 8. The majority of this expenditure relates to care leavers who are placed in supported lodgings and other accommodation.

Family Support Service
Cash Limit £6,408,000 Variance -£310,000 (-4.8%)

3.47 There has been a reduction in underspend of £26,000 since period 8. This variance and movement from period 8 is broken down below:

3.48 The number of children receiving direct payments has increased by eight since the end of March 2007, from 129 to 141, an increase of two since November. Whilst the recent growth allocations to Direct Payments budgets have improved the reported variance against this budget heading since 2006/07, a pressure continues to be reported. This is partly as a result of the increasing use of this scheme.

3.49 Increased direct payments and home care packages have been used to support continued placements within the community, avoiding more costly residential placements. However, a review of the packages set up for direct payments and home care has resulted in a reduction in forecast expenditure since period 8.

3.50 New contracts with two organisations to provide day care services have also been invested in to provide support to children and their families in need.

3.51 Additional investment into other allowance support payments (e.g. residence orders and kinship care) and preventative services are currently reflecting an underspend. This is partly due to teams not recruiting to unqualified social services assistant posts, as well as the number of transitional CLA children moving into residence order, kinship care, special guardianship and adoption placements being lower then had been assumed for the budget assumptions made for 2007/08.

3.52 The increase reported in day care reflects changes that have been made to forecasts in relation to running costs of two `family centre' premises.

3.53 Further to the previous, report additional work has been completed by teams to review the accuracy of home care packages, resulting in a net reduction in forecasts of -£24,000.

Other Children's Services
Cash Limit £5,598,000 Variance +£ 416,000 (+7.4%)

3.54 This variance is broken down below:

	November 2007 Variation	January 2008 Variation	Movement Nov - Jan
Service	£'000	£'000	£'000
Adoption Services	+23	-18	-41
Leaving Care Services	+216	+309	+93
Other Children's Services	+233	+125	-108
Total	+472	+416	-56

3.55 The forecast overspend is primarily within Leaving Care services. The number of care leavers has increased significantly over the last twelve months as demonstrated below:

	31 Jan 2007	31 Mar 2007	31 Jan 2008
Number of Care Leavers	419	426	478

3.56 Many of these young people are placed within supported lodgings placements, some of which are high cost. In addition some former Children Looked After care leavers are still placed within purchased and in-house fostering placements, contributing to the increasing costs of this service.

4 Grants Monitoring

4.1 The Department's Management Team receive a monthly detailed breakdown of grant-related expenditure. Commitments against all of these are being reviewed and, where there is scope within the grant rules and to achieve most cost-effective use of the funds on highest priority areas, savings have been sought in order to reduce the pressure on this year's budget position and with a view to the longer term impact.

4.2 This has already led to a reduction of over £300,000 on some project budgets (see SEN budget commentary above) and has also identified underspends that will be carried forward to 2008/09 in accordance with the grant rules.

5 Partnerships

5.1 In 2007/08 the County Council has further developed best practice in terms of financial reporting. In part this has included ensuring significant partnerships are regularly reported. Within Children's Services there are two partnerships that fall within this category - Wessex Youth Offending Team (YOT) and the CAMHS Children's Trust.

Wessex YOT

5.2 The total budget for Wessex YOT is about £8m in 2007/08. It is funded primarily by the Youth Justice Board and partner organisations (whose contributions may be in cash and/or contributions in kind). The Children's Services contribution for 2007/08 is £2.079m.

5.3 The Wessex YOT Management Board receives regular finance and performance reports. At its meeting on 11 March 2008 the Management Board received a report on the financial position for 2007/08 as at the end of February 2008. This showed that, although there are a number of pressures, an overall balanced budget is anticipated.

CAMHS Children's Trust

5.4 On 5 March 2008 the Board received an update on the position as at 31 January 2008, showing an increase in underspend of £178,400 to £653,500. However, this was largely due to delays in implementing projects, the funding for which is to be carried forward to 2008/09. This left an uncommitted balance of about £57,000. The Board reviewed its previous decisions and made further proposals regarding the use of the underspend for one-off projects and carry forward.

6 Consultation

6.1 The forecast outturns are based on ongoing financial monitoring in consultation with partner organisations where appropriate e.g. Youth Offending Team.

7 Legal implications

7.1 None.

8 Financial implications

8.1 The financial implications are summarised at paragraph 1.

9 Personnel implications

9.1 None.

10 Impact assessment

10.1 The proposals contained in this report are not considered to be discriminatory .

11 Crime prevention issues

11.1 None.

12 Views of the Local County Councillor

12.1 No specific consultations or views sought.

13 Conclusion

13.1 There is a projected net underspend of £1,885,000 on the Children's Services Revenue Budget. This is made up of a forecast underspend of £1,552,000 on the Schools Budget that is ring-fenced and a forecast underspend of £333,000 on the non-schools budgets (after applying one-off funding of £624,000).

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

TITLE None