Hampshire County Council
	Executive Member for Adult Social Care		Item 1
	28 July 2008
	Budget Monitoring 2008/09 - period 01/04/2008 to 31/05/08 and 2007/08 Final Accounts
	Report of the County Treasurer and Director of Adult Services

Contact: Erica Meadus, (01962) 846195; [email protected]

1 Summary

1.1 This report covers budget monitoring for the first two months of the financial year which forecasts a small £332,000 underspend for the year, as well as giving an overview of the final accounts for 2007/08 which resulted in an underspend of £1.8m. In line with County Council policy, 50% of the underspend is carried forward into the Adult Services 2008/09 cash limit and is therefore additional resource. Plans and use of this will be monitored and reported going forward. It is requested to use £500,000 of the carry forward underspend to increase the social care and community development elements of the innovations project to all Districts (see para 4.17). It is further requested to use £200,000 to increase the safeguarding resource within the Adult Services Department to address both operational and strategic priorities (see paras 4.18 to 4.20).

1.2 The main factors impacting on the 2008/09 revenue budget following the closing of the 2007/08 accounts, and approval by the cabinet on 23 June 2008, are summarised in the table below:

	£'000
Planned carry forward of unused winter pressures contingency	1,500
Grants carry forward	3,773
50% share of 2007/08 underspend	932
Pay & Benefits provisional allocation	3,793

The carry forward of the unused winter pressures contingency will be used to bolster the 2008/09 contingency to £3.3m (which is seen as an adequate amount to cover unforeseen pressures) as set out in para 4.10. The grants carried forward will be used as set out in para 4.14.

The report for the first two months of this financial year shows the projected outturn to be in line with the budget with a small £332,000 underspend forecast for the year. This is explained in Part C later in the report and assumes all of the £3.3m winter pressures contingency will be required in 2008/09.

1.3 Decisions on Adult Services revenue expenditure and capital programmes impact on the financial resources available to this service to contribute to the following corporate strategy aims:

i) Aim 1 - Hampshire safer and more secure for all - includes protection of vulnerable people, and helping young adults to live positive lives

ii) Aim 2 - Maximising wellbeing - Maximising life opportunities - through provision of high quality and accessible caring services for vulnerable people and their carers. Improving services - ensuring services are inclusive and continuously improving to meet the changing needs of existing and potential service users and providing opportunities for people to help themselves

iii) Aim 3 - Enhancing our quality of place - Providing excellent services/facilities including residential homes and supported living and planning for the future

Final Outturn 2007/08

1.4 At the same stage of the 2007/08 financial year an operational overspend of £1.9m was predicted if no remedial action was taken. During the financial year this figure decreased steadily in line with remedial action taken by members and the department. In addition, with no significant winter pressures this led to an underspend of £1.865m against the revised budget.

1.5 The underspend of £1.865m is 0.7% of the 2007/08 adjusted revised revenue cash limit of £268.065m (see Appendix 1). This was mainly the result of additional Learning Disability savings from minimising transition costs, achievement of high cost placement reviews and additional savings in continuing health care, particularly in the last quarter of the financial year. The impact of the Home Care Modernisation project refocusing to deliver reablement across the county also contributed to the management of care package costs within Older Persons budgets.

1.6 The Cabinet agreed in June 2008 that 50% (£0.932m) of the £1.865m underspend be carried forward to 2008/09. Plans and use of this will be monitored and reported going forward. The first £500,000 is planned to be spent on the Innovations Project (see para 4.17).

1.7 The recovery savings target for 2007/08 of £13m was achieved during the financial year marking the successful completion of the two year financial recovery programme. The savings are summarised in Appendix 5. In particular, an additional £400,000 Learning Disability savings were achieved from minimizing transition, high cost placement reviews and continuing health care funding.

1.8 Further details on the main differences between the actual revenue expenditure for 2007/08 and the revised budget for cash limited expenditure for 2007/08 are given in Part A below. Part B covers capital expenditure. More detailed information is contained in appendices 1 to 6 at the end of the report.

1.9 On capital, schemes to the value of £2.952m were committed in the year and Cabinet approval has been given to carry forward schemes to the value of £3.802m to start in 2008/09. The combined value of schemes started and to be carried forward is £6.754m, which is equal to the programme limit.

2008/09 Revenue Budget Strategy

1.10 A budget strategy was agreed as part of the budget setting process in February. Within the budget for 2008/09 are growth pressures of £15.6m, which are funded from:

· redeployment of resources of £6.8m

· extra guideline growth of £6.5m

· shortfall £2.3m *

* £0.8m already met from the planned carry forward built into the budget. The £1.5m balance will be met from winter pressures monies carried forward from 2007/08.

1.11 Following the closure of the 2007/08 accounts, Cabinet has agreed that Adults Services carry forward the £3.5m unused winter pressures contingency from 2007/08. The first £2m will be allocated to capital in order to invest in social care building stock, particularly extra care. The remaining £1.5m will be transferred to the winter pressures contingency to meet the residual £1.5m shortfall above and balance the budget.

2008/09 Revenue Budget Position

1.12 This is the first budget monitoring report for 2008/09, and is based on data to the end of May. The headlines are shown below.

1.13 The total cash limit for the service at period 2 is £291.237m. The predicted outturn based on the position at the end of May 2008 is estimated to be £290.905m, a small underspend of £332,000. The cash limit includes an estimate of £3.7m to cover the increased cost of pay and benefits implemented in February 2008.

1.14 The Pay & Benefits allocation is a provisional figure. This will be increased for back pay for successful appeals for 2007/08 and arrears of protection for staff formerly on inclusive pay. The final figure will be reported in a subsequent monitor.

1.15 The 2008/09 contingency is £3.3m, after including the one-off £1.5m carry forward from 2007/08, and it has been outturned to budget at this stage, although none of it has been committed.

1.16 The successful Invest to Save bid to enhance the transition service and support continuing health care applications will mean a one-off cash limit increase of £139,000 in 2008/09 to be repaid by a one-off reduction in 2010/11.

1.17 The government has launched stroke assistance grant. Hampshire's allocation is £145,000. A detailed plan to maximise the use of the grant is being prepared by the OP/PD Strategic Commissioning Director for a future DMT meeting. The Government has also launched a new carer's strategy but the grant impact for Hampshire has not yet been announced. The money will be allocated to PCTs who will be required to work with their local authority partners to publish joint plans. An announcement from the government of the Hampshire figure is expected in the next few weeks.


Capital Budget Strategy 2008/09

1.18 The total capital cash limit for 2008/09 is £8.698m. This includes £2m transferred from revenue, and £3.8m carried forward from 2007/08, as agreed by Cabinet on 23 June 2008.

1.19 The capital programme position and proposals to spend the transferred £2m are in part D.

1.20 Further details of the overall revenue budget position and projected outturn for 2008/09 are set out in Part C below. Part D gives an update on the 2008/09 capital programme position.

Detailed Explanation

2 Part A - 2007/08 revenue expenditure under the Service's control

2.1 Revenue expenditure under the Service's direct control was subject to a cash limit. For 2007/08 the adjusted amount is £268.085m as set out in Appendix 1.

2.2 The final outturn was £1.865m less than the cash limit. During 2007/08 the financial recovery plan has been completed and progress reported to the Leader and to Members on a regular basis. The overall final position is analysed in Appendices 2 and 3. Paras 2.6 to 2.12 and appendix 4 includes a more detailed statement of variations since the revised budget was prepared in November. Appendix 5 summarises savings made against the 2007/08 budget as part of the financial recovery programme.

2.3 The final position for 2007/08 compared to the outturns for the previous three years is shown in the table below (note that variations relate to Social Services and include elements relating to Children and Families Social Care for the year 2004/05):

	Variations from Revised Budget
	£'000	%
2004/05	+532	+0.2
2005/06	+11,124	+4.5
2006/07	+7,494	+2.9
2007/08	-1,865	-0.7

2.4 The last financial year has been a successful one with financial recovery completed and 3-star status achieved. As well as meeting savings targets, the client groups, through close management have constrained the impact of key demographic pressures notably transition costs from Children's Services (with support from Children's Services).

2.5 The following paragraphs briefly describe some of the more significant variances across each client group since the revised budget was prepared in November.

Older people -£653,000 underspend (-0.5%)

2.6 The main areas of underspend in older people are purchased Domiciliary care, Direct Payments and Assessment & Care Management (ACM). For ACM this was due to tight vacancy management pending the restructure. Domiciliary care has seen a 5.6% decrease in client activity over the financial year, partly due to the successes of the Community Response Team in re-abling 24% of cases dealt with, and strict screening at Panel to ensure only clients meeting the eligibility criteria receive care.

2.7 Management action has been targeted at increasing direct payment client activity to meet performance targets, and by the year end activity levels had increased back to previous levels.

2.8 These under spends have been partly offset by an overspend on purchased residential care, where, although client activity has remained fairly constant, higher dependency levels have led to the average package cost being above the budgeted level. Also, an overspend on in-house nursing, due to a reliance on agency staff and overtime payments resulting from high dependency clients, and difficulties in recruiting staff, and pressures on non-staff budgets.

Adults with a physical or sensory impairment +£449k,000 overspend (+1.7%)

2.9 The primary reason for the overspend was high demand for domiciliary, nursing and residential care, caused by increased level of need, rather than significant increases in client activity. This has been partly offset by underspends on Direct Payments and Assessment & Care Management.

Adults with learning disabilities -£1.403m underspend (-2.4%)

2.10 Purchased client numbers overall increased in year by 126 (costing £1.8m) with the increases predominantly relating to community based services. This was somewhat offset by a reduction in high cost residential client numbers (24 cases saving £1.3m). This reduction was mainly the result of a successful high cost placements project and an improvement in securing continuing health care funding. The latter was achieved through focussing resources on working with local health colleagues on the implementation of the new continuing health care guidance. This included a marked improvement in securing continuing health care funding for young people moving across from children's services. This success, along with other care management action to avoid and minimise costs led to a £1.2m underspend against the £2.5m growth set aside in the 2007/08 for transition clients. There were also significant underspends (£0.700m) in the in-house services, particularly day care, as a result of vacancy management.

Adults with mental health needs +£67,000 overspend (+0.5%)

2.11 The primary reason for the overspend was a shortfall in income due to an increase in the number of clients falling under Section 117 who could not be charged.

Other services -£235,000 underspend (-14.1%)

2.12 The underspend was principally due to assessment and care management vacancies for substance misuse and reduced expenditure on HIV purchased services

Recovery plan

2.13 The savings target for 2007/08 was £12.9m. The final position was £13.3m savings achieved. This marked the successful completion of the two year financial recovery programme. The savings are summarised in Appendix 8. In particular, additional £400,000 Learning Disability savings were achieved from minimsing transition, high cost placement reviews and continuing health care funding.

3 Part B - 2007/08 Capital expenditure

3.1 The outturn for 2007/08 is set out below with details of the total resources and of the individual schemes started/completed in the year appearing in Appendix 6.

	£'000
Total resources	6,754
Value of schemes started/completed in 2006/07	2,952
Balance of Cash Limit	3,802

3.2 The total programme limit for 2007/08 amounted to £6.754m and schemes to the value of £2.952m were committed in the year.

3.3 Schemes not started in 2007/08 and carried forward to 2008/09 include the balance of minor works in residential and day care premises, furniture and equipment, and improvements to residential homes. The list of schemes started and proposed for carry forward are included in Appendix 6.

3.4 The combined value of schemes which started in 2007/08 and those carried forward to start in 2008/09 is £6.754m which is equal to the cash limit.

3.5 In accordance with the County Council's Financial Procedures, the final costs of capital schemes controlled on an expenditure basis completed in 2007/08 are listed in Appendix 6. "Completed" in this context means when the final payment has been made. Some of these schemes may have been in operation prior to April 2007, but the final payment was only made in 2007/08. The final cost of the schemes completed in 2007/08 is £2.952m.

4 Part C - 2008/09 Overall Revenue Budget position and projected outturn

Budget Strategy

4.1 In setting the budget for 2008/09 in February the following key assumptions were provided for :

_ Budgets have been set for the client groups at levels to meet current demand as well as demographic pressures

_ Saving plans are ambitious but will be closely monitored during the year, reported to Members on a regular basis and remedial action taken where appropriate

_ 2008/09 will be a year of significant modernisation of the service and will require significant project management

The budget is constructed at the cash limit and allows for:

Category	£m
Pressures	15.6
Savings	(6.8)
Net Growth	8.8
5.6% Cash Increase	(6.5)
Further savings to be identified *	(2.3)
Balance	0

* This shortfall has now been covered by the planned carry forward from 2007/08 of £820,000 and the carry forward of the unused winter pressures contingency of £1.5m (see para 4.10).

4.2 The report for the first two months of this financial year shows the projected outturn to be in line with the budget with a small £332,000 underspend forecast for the year. The current cash limit amounts to £291.237m. There has been an increase of £10.282m to the cash limit following Cabinet on 23 June 2008. The movement in the cash limit is set out in the table below:

	£ m
Budget as per Budget Book 2008/2009	280.955
Winter pressures carry forward (one-off) *	1.500
50% of £1.865m underspend (one-off)*	0.932
Supporting people grant c/f (one-off)*	2.684
Emergency respite care grant c/f (one-off)*	0.298
Delayed discharges grant c/f (one-off)*	0.500
Training grant c/f (one-off)*	0.246
MCA training grant (one-off)c/f *	0.025
MH Act Training grant (one-off)c/f *	0.020
Pay & Benefits **	3.793
Invest to Save	0.139
Stroke grant	0.145
Cash limit as at 24 June 2008	291.237

* approved by Cabinet 23 June 2008

** provisional allocation

4.3 This is the first budget monitoring for 2008/09 and needs to be treated with some caution at this early stage of the year with only two months's spending incurred and with full year commitments being included in the projected outturn which may not come to fruitition.

4.4 The overall position by business group may be summarised as follows:

Client Group	Adjusted P2 Cash Limit 2008/09 (£000)	Projected Spend (to 31/03/09) (£000)	Variation Over/(Under) Spend
			£'000	%
Director, Deputy Director and Performance & Business Management	22,734	22,997	263	1.2
Commissioning and Partnerships	46,239	46,048	(191)	(0.4)
Older People / Physical Disability	149,810	149,839	29	0.0
Mental Health / Learning Disability	67,179	67,173	(6)	(0.0)
Contingency & Centrally Held	5,275	4,848	(427)	(8.1)
Grand Total	291,237	290,905	(332)	0.1

Note: The table above analyses the budget in terms of management responsibility and is not, therefore, the same as the presentation used in the budget book, which follows the external reporting requirements of CIPFA's best value accounting code of practice.

4.5 The Director, Performance & Business Management pressure mainly relates to County Treasurer's recharge budgets for the Financial Assessments and Benefits (FAB) and Devolved Finance Units (DFU) support to the service and the Administration function at headquarters. Both FAB and the DFU are currently being reviewed and the outcomes of the reviews may lead to savings on these functions. The delay of the implementation of the administration review at HQ has meant that agency staff have had to be taken on which was not forseen. At this early stage of the year there are still management actions to be implemented such as vacancy management to bring the budget projections in line with the cash limit.

4.6 The Commissioning and Partnerships underspend is largely the result of staff vacancies across the teams.

4.7 The small Older People and Physical Disability pressure of £29,000 is the net effect of various pressures and under spends, as summarised below and explained in the following paragraphs.

o Domicilliary care pressure £3.025m

o Direct Payments -£1.106m

-----------

£1.919m

o In house residential & nursing £0.910m

o Purchased residential & nursing -£2.847m

-----------

-£1.937m

o Other pressures and under spends £0.047m

----------

Net pressure £0.029m

· The domiciliary care pressure is due to increasing client numbers and package complexity. In view of the success of the reablement programme in reducing domiciliary care placement numbers during 2007/08, the domiciliary care budget for 2008/09 was set on the assumption of 20% (1,150) fewer clients than budgeted for in the previous year. However, there has been an increase in cases recently. The pattern is not yet regular, and so it is too early to tell whether the budget assumptions will prove over-optimistic. Care managers' projections suggest that there may be a pressure of up to £3m on this budget, equivalent to an additional 600 clients on average at an approximate net cost of £5,000 per year. In order to take a prudent view, that estimate has been used at this stage in assessing the pressure on the budget, but it is hoped that a more reliable picture will emerge by the next budget monitor.

· This is partly offset by a £1.1m under spend on Direct Payments, as client activity has not yet increased in line with performance targets, as allowed for in the budget (it was assumed clients would transfer from domiciliary care).

· In-house nursing and residential are forecast to overspend by £900,000 in total, due to the high dependency of clients, and additionally for in-house nursing a pressure has been identified on non-staff budgets, exacerbated by rising food and fuel costs.

· Conversely purchased nursing and residential are forecast to under spend by £2.8m (£1.3m and £1.5m respectively) due to a small reduction in client activity, the impact of in-house units having a higher proportion of the high dependency clients, and also the impact of domicilliary care being given to higher dependency clients that would otherwise have been in residential care.

4.8 The Learning Disability sector is showing a £119,000 overspend projection as at period 2. This is largely the result of the following pressures:

· delay in realising the Learning Disability share of the departmental savings in relation to the implementation of HantsDirect (£0.590m)

· cost of new packages of care (£0.080m)

· increase in the average weekly cost of purchased care orders of approximately 1% (£0.450m).

The impact of these pressures has been largely offset by a projected £1m underspend on the cost of Transition clients. This is the result of a combination of more focussed care management resources and unplanned delays in the start of care packages.

4.9 Mental Health-Operations are forecasting a £125,000 underspend at this stage which mainly relates to vacancies.

Contingency

4.10 The contingency is made up of:


o Contingency in the base budget £3.3m

o Savings and contingency funding to be identified -£2.3m

o Planned carry forward from 2007/08 (one off) £0.8m

-------

o Sub-Total £1.8m

o One off carry forward of 2007/08 Contingency £1.5m (to bolster contingency)

--------

o Total contingency after carry forward addition £3.3m

o Contingency for specific pressures £1.1m

(e.g. section 117 etc)

o One off carry forward from 2007/08 ( 50% pending £0.9m allocation to service areas)

--------

o Total in table in para 4.4 above £5.3m

--------

4.11 At this stage of the year the winter pressure element (i.e. £3.3m) of the total £5.3m contingency needs to be kept intact to cover winter or operational pressures which may occur as the year progresses.

Government Grants

4.12 The 2008/09 government grants allocation of £48.224m for the service is summarised in Appendix 7. Since the budget was set, the Department of Health has released new ringfenced funding for providing support services to stroke survivors for the three years 2008-09 to 2010-11. Hampshire's allocation for each year is £145,000. It has also launched a new carer's strategy. The grant impact for Hampshire has not yet been announced. Full details of 2008/09 grants (including the new stroke grant) are in Appendix 7.

4.13 A new grant for Social Care Reform has been introduced for a period of three years, which will be used to promote inclusion in communities. This grant will give Adult Services £1.537m in 2008/9; £3.6m in 2009/10 and £4.5m in 2010/11 and will be used for the Putting People First programme to implement the personalisation agenda, including Self Directed Support (SDS). The ultimate aim is to empower individuals who are in need of support in the definition and purchase of services they need for their well being. The grant is to pay for the costs of the transformation required by Putting People First, including Self Directed Support, not for operations. The future of the funding beyond the 3 year period is uncertain. The 2008/09 grant has been allocated as follows:

	£'000
Self- Directed Support - core implementation of Self Directed Support countywide. Includes funding for IT developments, service users, and carer involvement, care brokerage, training, and funding for a small team of staff to develop policies and processes	1,071
Self Funders website - enhancement of "CareChoice" for non Adult Services clients wishing to purchase care.	120
Practise Based Commissioning - project management costs to lead on bringing health and social care commissioning closer together to support people to stay at home	50
Person Centre Planning - Implementing Valuing People through providing support for HCC and provider organisations to offer more personalised services. Ensuring support is available for individual people with learning disabilities to develop person centred plans. Includes funding of coordinator post, meeting venues and training costs for project steering group and beneficiaries, and promotional material.	71
Contract quality - to establish local quality outcomes and monitoring groups in each area to work with improving the residential and nursing sector	100
Workforce development - to develop a clearer strategy and better links with partners (including JobCentrePlus) to help ensure we can meet future demand for care workers, particularly under SDS.	25
Community Innovations - to support the OP MH strategy in Winchester and Andover	100
Total	1,537

4.14 Cabinet has also approved the carry forward of unspent government grant of £3.77m. However, only £1.106m is available for the main service and this is earmarked for specific service areas in line with the agreed carry forward procedures. It includes grants for training, delayed discharges, and mental health. Expenditure against these grants will be closely monitored. The remaining £2.684m is the underspend from the Supporting People programme. These grants need to be utilised in the current financial year.

Client activity

4.15 Since September 2007 (the numbers on which the budget was set) client numbers across the main client groups have risen by 127 (0.8%).

· The decreases in residential and nursing client numbers are due to unusually high client turnover over the Winter period.

· Improvements made in recording both purchased and in-house domiciliary and day care block contracts for Learning Disability and Mental Health in preparation for the launch of the new Block Contracts module on the Care Management database, SWIFT, are the main reason for the increase in activity in these care types. In addition, there have been a number of new Learning Disability placements in these areas, but these were largely provided for in the budget for 2007/08 as part of the Transition.

· Older Persons domiciliary client activity was also affected by unusually high client turnover over the winter months, however in the first two months of the current financial year, client activity has increased by 200 clients, due to higher dependency clients being given domiciliary care instead of residential or nursing care where possible in line with Personalisation, and also reduced waiting lists following recruitment to staffing vacancies. The domiciliary care client activity figures also reflect the impact of the Home Care Modernisation Programme, with clients transferring from in-house to purchased care.

· Direct payment activity increased significantly in March due to one off payments to over 85 clients, but are now showing a small increase on the September figures due to management activity to increase this type of client activity to meet performance targets.

(All Client Group Activity by Care Type and by External & Internal Provider)
						Movement Between
Care Type	Sep-07		Mar-08		May-08	Sep 07 & May 08
Nursing Care - External	1,525		1,414		1,435	-90
Nursing Care - In-house	401		408		410	9
sub-total Nursing Care	1,926		1,822		1,845	-81
Residential Care - External	2,620		2,584		2,568	-52
Residential Care - In-house	788		756		756	-32
sub-total Residential Care	3,408		3,340		3,324	-84
Domiciliary Care - External	6,545		6,603		6,851	306
Domiciliary Care - In-house	662		500		501	-161
sub-total Domiciliary Care	7,207		7,103		7,352	145
Day Care - External	1,728		1,780		1,811	83
Day Care - In-house	1,605		1,636		1,623	18
sub-total Day Care	3,333		3,416		3,434	101
Direct Payments - External	662		944		701	39
Direct Payments - In-house	0		0		0	0
sub-total Direct Payments	662		944		701	39
Other - External	138		138		145	7
Other - In-house	1		1		1	0
sub-total Other	139		139		146	7
Grand Total	16,675		16,764		16,802	127

The movement in the individual client groups is summarised below and detailed in Appendix 9.

4.16 The relationship between client activity and spending patterns is an area that both the department and the DFU are seeking to develop a better understanding. This is a major part of the planned enhancements to the budget monitoring process as part of the department's response to the Corporate BPI initiative.

Initial Proposals for using carry forward underspend

Innovations

4.17 It is requested to use the first £500,000 of the carry forward underspend to increase the social care and community development elements of the innovations project to all Districts. This is in line with the emerging Hampshire model for personalisation and supports the early intervention agenda through providing active support to older people including, access to information and advice, links to universal services, and links to community health services. The outcome being that we facilitate access for older people to maximise all resources that are available to them within their community.

Safeguarding

4.18 It is requested to increase the safeguarding resource within the Department to address both operational and strategic priorities. There is a clear increase in volume of work as well as complexity. This is impacting upon front line care management teams and administrative staff. The risk to service users as well as to the Local Authority is underlined in current themed CSCI inspections and in recent inquiries and judgements.

4.19 An evaluation of the role of the safeguarding coordinators who have been in post for nine months shows that they are having a positive impact on front line response to abuse of vulnerable adults. Their input offers clarity, structure and consistency. The increased strategic agenda also means that current staff are stretched so that significant areas of work cannot be developed.

4.20 Aspects such as the personalisation agenda require detailed input. Evidence from other comparable Local authorities also suggests that we are currently under resourced. The additional cost is in the region of £400,000 in a full year with a part year effect in 2008/09 of £200,000. It is requested to use £200,000 from the carry forward underspend to fund the £200,000 required in 2008/09.

Other Factors

4.21 In addition the following factors need consideration.

4.22 Outstanding debt relating to client contributions totals £534,000 of which £41,000 is at risk of being taken to the write-off panel for further consideration. There is one proposed write-off (totalling £11,000) that is over the £5,000 limit so will need to be formally written off by the Executive Member.

4.23 Outstanding debt from other local authorities and Health has decreased from £756,000 to £572,000 between end of March and end of May 2008. It is all anticipated to be recovered.

4.24 Pay and Benefits: The final allocation for 2008/09 is still to be agreed with Corporate Finance. A provisional figure of £3.793m has been included. Corporate Finance have agreed to fully fund the 2007/08 costs of appeals. A decision has not been taken yet on whether to fund the 2008/09 costs. The position will be updated when known.

4.25 In order to meet the requirements of the service it has been necessary to appoint a number of additional key staff many of whom will be funded from grant money. A future report will be brought clarifying these appointments.

5 Risks and Challenges

This section highlights potential risks and challenges which could impact on the service. There may be a need to use some of the contingency if required to offset potential cost pressure.

Self Directed Support

5.1 Phase 1 of the implementation of Self Directed Support (SDS) is in its early stages but progress is  steady with 11 LD service users and 9 OP-PD service users within the process at this time (3 have progressed to support planning and provision stage) . Nevertheless, there are still significant challenges in relation to the  future  budgetary impact of the funding allocation system, charging for client contributions and risk management. These challenges and the associated risks are being actively managed by the SDS Project Board. The learning from Phase 1 will help inform how SDS is rolled out across the County though some of the issues will also be subject to developments at a national level.

Independent Living Fund (ILF)

5.2 Changes to the ILF scheme to reduce the contributions payable and the number of qualifying clients will result in increased spend on non-residential care across all client types. As ILF clients are not recorded separately on SWIFT, this pressure is not yet quantifiable, however, care managers have been asked to record details of ILF clients at Panel to provide more information on the likely impact.

Extra inflation pressure

5.3 There may be additional inflationary pressures over and above that provided in the budget that emerge across the service during the year.

LD Budget Transfer

5.4 The Department of Health has not yet issued guidance on the transfer of commissioning budgets for learning disability from PCTs to local authorities.

Ordinary Residence

5.5 Hampshire is a net "importer" of residents in residential care funded by other local authorities. Recent determinations by the Seceratary of State on the Ordinary Residence status of clients in residential setting that subsequently de-register may pose a significant financial risk to Adult Services should it have to pick up the costs of all clients including those currently funded by another local authority. Adult Services are working with Legal Services and Finance to scope these risks. This is likely to take time to be fully resolved and will involve working closely with other local authorities to formulate a considered response to the determination.

Managing risks

5.6 In order to manage the risks associated with Adult Services operations and modernisation programme a policy statement has been published in line with corporate practice. This enables risks to be regularly monitored by a nominated DMT member and the designated risk owner. There is also guidance for manager working parternship with other agencies to ensure that the liabilities held by the County Council are understood and appropriately managed. This report will provide an overview of risks and challenges for the programme which may change as national policies emerge and risks become clearer.

6 Part D - 2008/09 Capital Programme Position

6.1 The total capital cash limit for 2008/09 is £8.698m as set out in the table below. This includes £2m transferred from revenue, and £3.8m carried forward from 2007/08, as agreed by Cabinet. In addition, Cabinet agreed a further £400,000 for building maintenance repairs for Adult Services to improve the quality of life in residential homes. This will be met from the Policy & Resources cash limit and is most welcome. The slippage in the 2007/08 programme was due to delays on projects and technical resource constraints.

6.2 At this early stage of the year, most of the programme remains uncommitted. Of the £2m transferred from revenue, £0.5m is planned to be spent on fire precautions and other improvements in the residential setting; and £1.5m on extra care housing. The latter will be spent on a combination of planned new-build schemes: Gosport and Basingstoke and remodelling, for example, White Wings.

6.3 The capital programme position is summarised below. More details are in Appendix 2.

Capital Programme 2008/2009 - Position as at -	May
Resources	£'000s
2008/2009 Capital Programme	2,285
Balance of Cash Limit brought forward from 2007/2008	3,802
Capital Receipts	320
Revenue Contribution to Capital Programme *	2,000
Mental Health Capital Grant	291
Capital Cash Limit 2008/2009	8,698
Schemes committed (at contract prices)	1,436
Schemes not yet committed (at latest approved prices)	7,262
Total schemes	8,698

* Carried forward from 2007/08 revenue

7 Impact assessment

7.1 Adult Services budgets are targeted at the most vulnerable in society. How budgets are used have a significant impact on the most excluded. The operational directors have lead responsibility to ensure that impact assessments take account of the needs of these groups. The Head of Finance is a member of the Departmental management team, and part of her role is contribute to these impact assessments. This budget monitoring report provides information on the current performance of the Directorate and will contribute to better outcomes for all.

Recommendations

1 That the current budget position for 2008/09 be noted and the proposed spending from the £932,000 50% carry forward from 2007/08 of £500,000 on the innovations project be approved, and the proposed spending of £200,000 on safeguarding be approved.

2 That the final accounts for 2007/08 be 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.

TITLE

Appendix Contents

1 Construction of the 2007/08 cash limit

2 Summary of 2007/08 revenue expenditure

3 Analysis of 2007/08 cash limited revenue expenditure over services

4 Major variations in 2007/08 cash limited expenditure

5 Recovery plan savings against the 2007/08 budget

6 Capital expenditure 2007/08

7 2008/09 Government grants

8 2008/09 Capital Programme Position

9 Client activity

10 Comparison of Period 2 Projected Outturn with the latest cash limit

Appendix 1

Adult Services

Revenue Expenditure 2007/08

Construction of cash limit

1 In the revised budget revenue expenditure under the service's direct control was subject to a cash limit set by Cabinet of £272.9m. Business rates were an exception because the level of business rates on the County Council's own properties could not be determined precisely when the revenue budget was set. As a result of revaluations actual expenditure on rates is £11,000 lower than was provided for in the revised budget and the cash limit has been adjusted accordingly.

2 Further adjustments to the cash limit have also been made in respect of:

		£'000
Changes in Government Grants:
	Training Support LAA Pooled Budget DAAT	-246 -17
	Mental Health	-20
	Mental Capacity	-25
	Delayed Discharges	-500
	Emergency Respite Care	-298
	Supporting People	-2,684
		-3,790
Virements across Services
	LPSA Performance Grant for LAA Flagship	153
Pay & Benefits		2,276
Winter Pressures targeted savings		-3,500

3 The adjustments referred to above are incorporated in the table below which summarises the position for the service in the year:

	£'000	£'000
Revised cash limit for 2007/08		272,957
Reduction for the lower level of business rates payable	-11
Variation in government grants	-3,790
Virements across Services	153
Pay & Benefits	2,276
Winter Pressures targeted savings	-3,500
		-4,872
Amended cash limit		268,085
Net expenditure		266,220
Net underspending against Service's controllable expenditure.		-1,865

Appendix 2

Adult services

Final Accounts 2007/08

Summary of Revenue Expenditure

		(1)	(2)	(3)
		Adjusted revised estimate	Actual 2007/08	Variation (Col 2 - Col 1)
		£'000	£'000	£'000	%
Cash limited expenditure		268,085	266,220	-1,865	-0.7
Capital charges		2,245	4,338	2,093	93.2
Other expenditure which is controlled centrally by Policy and Resources and recharged to this service
- repair and maintenance of buildings		1,197	1,020	-177	-14.8
- central support services		8,945	9,974	1,029	11.5
		280,472	281,552	1,080
- adjustment for pension costs		1,335	1,034	-301	-22.5
Expenditure controlled by this committee recharged to Policy and Resources committee:
- corporate and democratic core		-196	-196	-	-
Net expenditure before grant		281,611	282,390	779	0.3
Government grants:
	Access and systems capacity	10,759	10,759	-
	Homeworkers	2	2	-
	National training strategy	1,145	1,145	-
	Human resources	536	536	-
	AIDS support	158	158	-
	Mental health	2,596	2,596	-
	Supporting people	30,861	30,861	-
	Invest to save	120	120	-
	Preserved rights	6,025	6,025	-
	Delayed discharges	2,328	2,328	-
	Carers grant	2,713	2,713	-
	Prevention Pilots	1,493	1,493	-
	LAA Pooled Budget (DAAT)	103	103	-
	Mental Capacity	318	318	-
	LPSA Pump Priming	93	93	-
	CSCI grant	13	13	-
		59,263	59,263	-
Total net expenditure		222,348	223,127	779	0.4
Reconciliation with total net expenditure in the budget book:
Net expenditure (on page B3 of the budget book)		223,430
Adjustments
	Pay & Benefits	2,276
	Virements across Services	153
	Decrease for higher level of business rates	-11
	Winter Pressures targeted savings	-3,500
		222,348

Appendix 3

Adult services

Revenue Expenditure 2007/08

Analysis of cash limited revenue expenditure over services

		(1)	(2)	(3)
		Adjusted revised estimate	Actual 2007/08	Variation (Col 2 - Col 1)
		£'000	£'000	£'000	%
Cash limit expenditure
Service Strategy and Regulation		502	453	-49	-9.8
Older people (aged 65 or over) including older mentally ill
	Assessment and care management	14,153	13,725	-428	-3.0
	Net costs of services	121,514	121,289	-225	-0.2
		135,667	135,014	-653	-0.5
Adults under 65 years with physical or sensory impairment
	Assessment and care management	6,846	6,384	-462	-6.7
	Net costs of services	19,425	20,336	911	4.7
		26,271	26,720	449	1.7
Adults under 65 years with learning disabilities
	Assessment and care management	3,882	3,795	-87	-2.2
	Net costs of services	54,999	53,683	-1,316	-2.4
		58,881	57,478	-1,403	-2.4
Adults under 65 years with mental health needs
	Assessment and care management	5,600	5,636	36	0.6
	Net costs of services	7,815	7,846	31	0.4
		13,415	13,482	67	0.5
Other adult services
	Assessment and care management	394	361	-33	-8.4
	Net costs of services	1,272	1,070	-202	-15.9
		1,666	1,431	-235	-14.1
Supported employment
	Net costs of services	482	452	-30	-6.2
Supporting people
	Net costs of services	30,861	30,861	0	0.0
Unapportionable overheads
	Compensatory added years	340	329	-11	-3.2
Net cash limited expenditure		268,085	266,220	-1,865	-0.7

Appendix 4

Adult Services

Revenue Expenditure 2007/08

Major variations in cash limited expenditure - underspending of £1.865m.

Budget heading	Variation	Adjusted cash limit	Reason
	£'000	£'000
Service strategy and regulation Older people (aged 65 or over)	-49 -653	502 135,667	Fewer complaints than in previous financial year. Reduced demand for direct payment and domiciliary care since the budget was set, and tight vacancy management pending the restructure, offset by an increase in high dependency, high cost residential packages.
Adults under 65 years with a physical or sensory impairment	449	26,271	Tight vacancy management pending the restructure more than offset by increased demand.
Adults under 65 years with a learning disability	-1,403	58,881	Secured more Continuing Health Care than planned and delays / reductions in the cost of clients transferring from Children's Services. Overachievement of savings from review of high cost placements.
Adults under 65 years with mental health needs	67	13,415	Shortfall in income as a result of increase in Section 117 clients who cannot be charged client contributions.
Other adult services	-235	1,666	Assessment & care management vacancies for substance misuse and reduced expenditure on HIV purchased services, partially offset by increased demand for residential substance misuse care packages.

Appendix 5

Adult Services

Recovery Plan savings against the 2007/08 Budget

Budget heading	Planned savings per budget	Actual savings achieved	Comments
	£'000	£'000
Service strategy and regulation Older people (aged 65 or over) including older mentally ill	- 9,557	- 9,276	The relatively small underachievement of planned savings primarily relates to the delayed implementation of the review of Day Care and Meals on Wheels projects. Lower than planned savings resulting from the slowed timescale for the Better Housings project were largely offset by additional savings from the phased opening of the in-house nursing unit beds.
Adults under 65 years with a physical or sensory impairment	1,080	1,046	Most savings targets were achieved as planned. Various small under achievements were mostly offset by an overachievement on the continuing health care (CHC) funding target.
Adults under 65 years with a learning disability	1,480	1,876	Overachievement of savings from high cost placement review and continuing health care targets
Adults under 65 years with mental health needs	172	367	Additional one-off staff savings through vacancy management
Other adult services	668	759
Total savings	12,957	13,324

Appendix 6

Adult Services

Capital Expenditure 2007/08

						£'000
1	Construction of total resources
	Original programme limit per 2007/08 budget book					4,139
	Cash limit brought forward from 2006/07					2,484
	Share of 2006/07 capital receipts					151
	Transfer of resource to Childrens Services					(20)
						6,754
2	Schemes committed during 2007/08
	The Horrill Centre (Challenger Way) Older Persons Day Centre					750
	Minor Works in Residential and Day care Premises					351
	Information Technology Equipment and Systems					129
	Information Technology Training Base					228
	Information Management System					313
	Mental Health Supported Capital Expenditure (Revenue )					185
	Improvements to OP Homes					989
	Improvements to Residential Homes					7
	Total schemes committed during 2007/08					2,952
3	Schemes carried forward, already approved by the Cabinet to start in 2008/09
	a) Schemes controlled on a starts basis:
	Minor Works					487
	Furniture and Equipment in Residential and Day Care Premises					444
	Furniture and Equipment in Office Bases					178
	Improvements to Residential Homes					893
	b) Schemes controlled on an expenditure basis - adjustment for variation between planned and actual expenditure:
	Mental Health Supported Capital Expenditure (Revenue)					432
	Information Management System					148
	Extra Care Supported Housing					166
	Community Equipment Stock					200
	IT Equipment					113
	Improvements to OP Homes					381
	Information Technology Equipment and Systems					360
	Total					3,802
4	Summary of 2007/08 capital programme:
	Total resources					6,754
	Schemes committed during 2007/08					2,952
	Balance of cash limit as 31 March 2008					3,802
	Schemes carried forward to 2008/09					-3,802
	Net balance of cash limit remaining to meet inflation costs					-
	Cash limit carried forward to 2008/09					3,802
5	Costs of capital schemes completed/started in 2007/08
	Scheme	Final cost	Funded from external contributions	Net cost chargeable to capital cash limit	Latest approved cost		Variation
	Completed projects:	£'000	£'000	£'000	£'000		£'000
	Mental Health Supported Capital Expenditure	185		185	185		0
	Information Technology Equipment/Systems	129		129	129		0
	Information Management System	313		313	313		0
	Improvements to OP Homes	989		989	989		0
	Sub-total	1,616		1,616	1,616		0
	Starts and block schemes
	The Horrill Centre	750		750	750		0
	IT training base	228		228	228		0
	Minor Works	358		358	358		0
	Sub-total	1,336		1,336	1,336		0
	Total	2,952		2,952	2,952		0

Appendix 7 2008/09 GOVERNMENT GRANTS		Variations
	Grants 2007/08 £'000	Existing Grants £'000	New Grants £'000	Grants 2008/09 £'000
Specific Grants *
Stroke Survivors			145	145
HIV/Aids Support	133	0		133
Homeworker's scheme	2	-		2
Social Care Reform	0		1,537	1,537
Learning Disabilities Campus Programme		240	0	240
	135	223	1,682	2,057
Moved to Revenue Support Grant
Acces&SysCap	10,759	(10,759)		0
Delayed Discharges	1,981	(1,981)		0
	12,740	(12,740)	0	0
Grants Ceased
Pump Priming Grant	93	(93)		0
Preventative Technology	996	(996)		0
	1,089	(1,089)	0	0
Area Based Grants
Existing Grants
Mental Health Grant	2,382	(152)		2,230
Drug Action Team	120	(17)		103
Adult Social Care Workforce (was NTS/HR)	1,693	186		1,879
CSCI Reimbursement	13	(13)		0
Carers Grant	2,653	625		3,278
Preserved Rights	6,025	(269)		5,756
IMCA & IMCAS Mental Capacity Grant	262	171		433
Supporting People Admin	820	(41)		779
	13,968	490	0	14,458
New Redirected from PCT
Learning Disability Development Fund		699		699
	0	699	0	699
Total Area based Grants	13,968	1,189	0	15,157
Total Grants exc Supporting People	27,932	(12,400)	1,682	17,214
Other Specific Grants
Supporting People Care Grant	31,111	(101)		31,010
Total Grants inc Supporting People	59,043	(12,501)	1,682	48,224
Variation between 07/08 & 08/09				(10,819)
Moved to Revenue Support Grant				12,740
Less Learning Disability Development Fund previously received from PCT				(953)
Cash Impact				968

* New Carers grant announced value unknown

Summary of 2008/09 Capital Programme Position Appendix 8

Capital Programme 2008/2009 - Position as at -	May
Resources	£'000s
2008/2009 Capital Programme	2,285
Balance of Cash Limit brought forward from 2007/2008	3,802
Capital Receipts	320
Revenue Contribution to Capital Programme	2,000
Mental Health Capital Grant	291
Capital Cash Limit 2008/2009	8,698
Schemes committed (at contract prices)
Furniture and Equipment in Residential and Day Care Premises	333
Minor Works in Residential and Day Care Premises	200
Furniture and Equipment in Office Bases	6
OPH Fire precautions / Improvements	825
Community Equipment Stock
Extra-care / supported housing
IT Equipment	15
Perf Man Info
MH Infrastructure & Systems
Multi Agency Info Sharing
ESCR	45
Self service & Self assessment
SWIFT	12
Lone Working
Sub-Total	1,436
Schemes not yet committed (at latest approved prices)
Furniture and Equipment in Residential and Day Care Premises	282
Minor Works in Residential and Day Care Premises	543
Furniture and Equipment in Office Bases	269
OPH Fire precautions / Improvements	1,468
Community Equipment Stock	300
Extra-care / supported housing	252
IT Equipment	173
IT Projects	960
MH SCE	432
MH Grants	291
Information Management Grant	91
Improving the Care Homes Environment	381
Extra Care Housing	1,500
Capital receipt	320
Sub-Total	7,262
Total schemes	8,698

Appendix 9 (Summary) (Client Group Activity by Care Type)
Older Persons
	Sep-07	Mar-08	May-08	Movement Sep 07 to May08
Nursing Care	1,787	1,707	1,725	-62
Residential Care	2,287	2,211	2,201	-86
Domiciliary Care	5,375	5,212	5,413	38
Day Care	1,524	1,506	1,522	-2
Direct Payments	147	410	165	18
Other	39	36	42	3
Total	11,159	11,082	11,068	-91
Physical Disabilities
	Sep-07	Mar-08	May-08	Movement Sep 07 to May08
Nursing Care	86	81	85	-1
Residential Care	107	103	104	-3
Domiciliary Care	753	723	748	-5
Day Care	299	286	289	-10
Direct Payments	338	348	350	12
Other	15	23	21	6
Total	1,598	1,564	1,597	-1
Learning Disability
	Sep-07	Mar-08	May-08	Movement Sep 07 to May08
Nursing Care	37	21	21	-16
Residential Care	897	909	901	4
Domiciliary Care	835	889	909	74
Day Care	1,153	1,259	1,262	109
Direct Payments	158	168	168	10
Other	73	69	71	-2
Total	3,153	3,315	3,332	179
Mental Health
	Sep-07	Mar-08	May-08	Movement Sep 07 to May08
Nursing Care	16	13	14	-2
Residential Care	117	117	118	1
Domiciliary Care	244	279	282	38
Day Care	357	365	361	4
Direct Payments	19	18	18	-1
Other	12	11	12	0
Total	765	803	805	40
GRAND TOTAL	16,675	16,764	16,802	127

Appendix 9 (Detailed) (Client Group Activity by Care Type and by External & Internal Provider)
						Movement b/w
Provider	Care Type	Sep-07	Mar-08	May-08		Sep 07 & May 08
	OLDER PEOPLE
External	Nursing	1,386	1,299	1,315		-71
	Residential	1,573	1,538	1,527		-46
	Dom Care	4,855	4,824	5,022		167
	Day Care	1,013	1,014	1,030		17
	Direct Payment	147	410	165		18
	Other	39	36	42		3
	Total External	9,013	9,121	9,101		88
Inhouse	Nursing	401	408	410		9
	Residential	714	673	674		-40
	Dom Care	520	388	391		-129
	Day Care	511	492	492		-19
	Other	0	0	0		0
	Total Inhouse	2,146	1,961	1,967		-179
	OP TOTAL	11,159	11,082	11,068		-91
	PHYSICAL DISABILITY
External	Nursing	86	81	85		-1
	Residential	97	92	92		-5
	Dom Care	683	689	718		35
	Day Care	158	147	156		-2
	Direct Payment	338	348	350		12
	Other	15	23	21		6
	Total External	1,377	1,380	1,422		45
Inhouse	Residential	10	11	12		2
	Dom Care	70	34	30		-40
	Day Care	141	139	133		-8
	Other	0	0	0		0
	Total Inhouse	221	184	175		-46
	PD TOTAL	1,598	1,564	1,597		-1

	LEARNING DISABILITIES
External	Nursing	37	21	21		-16
	Residential	833	837	831		-2
	Dom Care	831	885	905		74
	Day Care	381	427	434		53
	Direct Payment	158	168	168		10
	Other	73	69	70		-3
	Total External	2,313	2,407	2,429		116
Inhouse	Residential	64	72	70		6
	Dom Care	4	4	4		0
	Day Care	772	832	828		56
	Other	0	0	1		1
	Total Inhouse	840	908	903		63
	LD TOTAL	3,153	3,315	3,332		179
						Movement b/w
Provider	Care Type	Sep-07	Mar-08	May-08		Nov 07 & Feb 08
	MENTAL HEALTH
External	Nursing	16	13	14		-2
	Residential	117	117	118		1
	Dom Care	176	205	206		30
	Day Care	176	192	191		15
	Direct Payment	19	18	18		-1
	Other	11	10	12		1
	Total External	515	555	559		44
Inhouse	Dom Care	68	74	76		8
	Day Care	181	173	170		-11
	Other	1	1	0		-1
	Total Inhouse	250	248	246		-4
	MH TOTAL	765	803	805		40
	GRAND TOTAL	16,675	16,764	16,802		127

Appendix 10 Comparison of Period 2 Projected Outturn with the latest Cash Limit

		Provisional Cash Limit Adjustments							Period 2
Client Group	Original P2 Cash Limit 2008/09 (£000)	Winter Pressures (£000)	2007/08 Grants c/f (£000)	Pay & Benefits 08/09 Provisional Allocations (£000)	Others (£000)	Adjusted P2 Cash Limit 2008/09 (£000)	Total Actuals as at 31/05/08 (£000)	Projected Spend (to 31/03/09) (£000)	Variation Over/(Under) Spend
									£'000	%
Director	1,895	0	0	16	0	1,911	174	1,964	53	2.8
Deputy Director (directly managed)	321	0	0	0	0	321	(319)	319	(2)	(0.6)
Performance and Business Management	20,223	0	246	33	0	20,502	994	20,714	212	1.0
Commissioning and Partnerships	42,891	0	3,027	37	284	46,239	9,617	46,048	(191)	(0.4)
Older People / Physical Disability	146,257	0	500	3,053	0	149,810	20,279	149,839	29	0.0
Mental Health / Learning Disability	66,525	0	0	654	0	67,179	9,038	67,173	(6)	(0.0)
Centrally Held	2,843	2,432	0	0	0	5,275	(663)	4,848	(427)	(8.1)
Grand Total	280,955	2,432	3,773	3,793	284	291,237	39,120	290,905	(332)	(0.1)