Archived decisions

Agenda Item 2

HAMPSHIRE COUNTY COUNCIL

Proposed Decision Sheet:

Agenda Item 2

HAMPSHIRE COUNTY COUNCIL

Decision Report :

Contact Name: Erica Meadus

Tel: 01962 846195 Email: [email protected]

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1 The report updates the Executive Member on the budget position to 30 September 2008 which shows the 2008/09 projected underspend position to be £2.3m (0.8% of the cash limit). The department anticipates containing pressures for the remainder of the year and will plan for an underspend of £3.9m including unused contingency and to carry forward grants to 2009/10. This will help alleviate the budget pressures the department faces next year. Extra costs are anticipated in 2009/10 for double running to support the service transformation to deliver the personalisation agenda, as well as demographic and economic pressure on both purchased and in-house services. The strategic context for next year is a worsening economic climate. This will put extra pressures on both external and internal service providers. The department may need to react to the impact this has on other businesses.

2) Issues Covered in Report:

2.1 The report highlights the movement on the 2008/09 revenue budget from an overspend in period 4 to an underspend in period 6. The main reasons for the movement are summarised and the current position and emerging issues are explained. An update on the capital position is also included.

3) Recommendations:

3.1 That the current budget position, which shows the 2008/09 projected underspend position to be £2,268,000 (0.8% of the cash limit) at 30 September, be noted and management actions to support budgetary control be approved.

3.2 That the proposals for a planned underspend of £3.9m and carrying forward grant where spending is planned next year be approved as listed below.

o £222,000 LD Campus Closure Grant

o £100,000 Stroke grant

-------------

o £322,000 Total

3.3 That following conversion of day service posts into Community Mental Health Teams, approval be given for a £304,000 increase in the budget for Assessment & Care Management and a £304,000 decrease in the budget for In House Day Services.

MAIN REPORT

1) Purpose of the Report:

1.1 This report covers budget monitoring for the first six months of the year. This is the third monitoring report for 2008/09 and is based on data to the end of September. The report shows the 2008/09 projected underspend position to be £2,268,000 (0.8% of the cash limit) at 30 September. Every effort will be made to increase this underspend to £3.9m, or more.

2) Contextual Information and key issues

2.1 Management have contained and will further contain the pressures on the budget to carry forward resource to help alleviate pressures faced next year. Extra costs are anticipated in 2009/10 for double running to support the service transformation to deliver the personalisation agenda, as well as demographic and economic pressure on both purchased and in-house services. The strategic context for next year is a worsening economic climate. This will put extra pressures on both external and internal service providers. The department may need to react to the impact this has on other businesses. Appendix 3 illustrates the effect to date on demand led budgets.

2.2 Management are taking actions to increase the underspend achieved to £3.9m or more in order to carry forward further resource to help address the many pressures faced in 2009/10.

2.3 Carry forward of £322,000 grant is requested for the grants below where discussions with key strategic partners have been required to develop robust spending plans. As a result the implementation will be phased over this financial year and the next financial year.

o £222,000 LD Campus Closure Grant

o £100,000 Stroke grant

o £322,000 Total

2.4 The £3.9m planned carry forward includes £1.6m of the contingency assuming unforeseen winter pressures do not exceed £1.7m. Based on experience in previous years a comprehensive plan has been assembled to deal with increased pressures over the winter.

3. Movement from the last reporting period:

3.1 This section explains the movement since the last report which showed the position at the end of July. At that time an overspend of £380,000 was forecast. The latest projections are based on data as at the end of September 2008. The forecast position has moved to an underspend of £2,268,000. Table 1 sets out the movements by service area since the previous report, the reasons being explained in the following paragraphs.

3.2 The major movements bringing about the decrease are:

· A £115,000 reduction in overspend in Director and Performance & Business Management (PBM).

· A £951,000 reduction in Older People and Physical Disability (OP/PD).

· A £1,654,000 reduction in contingency and centrally held.

3.3 The £115,000 reduction in overspend in Director and Performance & Business Management is mainly due to a reduction in the projected outturn for training of £68,000 and a continuation of vacancies in HQ administration of £29,000, together with other minor variations of £18,000.

3.4 The £951,000 decrease in Older People and Physical Disabilities is mainly due to;

· £367,000 decrease in forecast for Assessment & Care Management due to continuing delays in recruitment to vacant posts (due to both a lack of suitable candidates and delays in CRB checks etc), absences due to maternity leave and long term sickness that have not been backfilled, and the part release of a contingency for Pay and Benefits appeals deemed not required.

· £369,000 decrease in forecast outturn for purchased nursing due partly to further Continuing Healthcare income and losing some high cost clients. The net increase of 10 clients masks significant movements on client activity which has led to a small decrease in average package cost.

· £231,000 increase in forecast outturn for Direct Payments (increase of 12 clients, but due mainly to increases to existing packages).

· £281,000 decrease in forecast for in-house homecare due to the numbers of remaining staff on the old structure continuing to decrease, particularly following the Homecare Modernisation Board decision on processes for dealing with these staff, and further delays in recruiting to vacancies in the new structure.

· £222,000 decrease in forecast outturn in purchased domiciliary care, due to a large number of high value orders closing (being replaced with lower value orders), and further reductions to commitments for breaks in care. Additional costs arising from increasing client numbers have been met from the release of contingency monies held for this purpose.

3.5 The reduction in contingency and centrally held is primarily a planned underspend of £1.6m.

      3.6  The current cash limit amounts to £292.637 m. There has been an increase of £895,000 to the cash limit since the report to the Executive Member on 1 October 2008 primarily because of Learning Disability campus closure ring fenced government grant as set out in table 2 below:

                  

3.7 Grants carried forward from 2007/08 of £3.8 m, are forecast to be fully spent.

3.8 In addition, a number of 2008/09 specific grants will require carry forward to 2009/10 where projects expenditure is now planned for 2009/10. These carry forwards require Executive Member approval and are listed below:

o £222,000 LD Campus Closure Grant

o £100,000 Stroke grant

o £322,000 Total

4. Current position

4.1 The main reasons for the projected underspend of £2,268,000 are set out in this section which explains the position for each business group and details major variances and the management actions that will continue.

4.2 Table 3 outlines the latest forecast position for each budget group.

Table 3 Current position
Client Group	P6 cash limit	Projected spend (to 31/03/09)	Variation Over/(Under) spend
	£'000	£'000	£'000	%
Director and Performance and Business Management	22,616	22,696	80	0.4
Commissioning and Partnerships	46,602	46,465	(137)	(0.3)
Older People & Physical Disabilities	151,419	150,800	(619)	(0.4)
Learning Disabilities (Ops)	57,256	57,867	611	1.1
Mental Health (Ops)	10,103	9,983	(120)	(1.2)
Contingency and centrally held	4,641	2,558	(2,083)	(44.9)
Total	292,637	290,369	(2,268)	(0.8)

 Ops = Operations

4.3 Director and Performance and Business Management (overspend £80,000)

4.3.1 The Director and Performance and Business Management pressure of £80,000 mainly relates to £155,000 pressure for corporate recharges and £80,000 pressure on repair and maintenance of furniture and equipment. These are offset by £137,000 savings from delays in recruitment and £18,000 other minor variations.

4.4 Commissioning & Partnerships (underspend £137,000)

4.4.1 The Commissioning and Partnerships underspend is largely the result of staff vacancies and management of small pockets of discretionary spend across the teams.

4.5   Older People and Physical Disability (underspend £619,000)

4.5.1 The overall underspend position for Older People(OP) and Physical Disability(PD) is  summarised and explained below:

     

    OP & PD Care Management underspend                        (£1,603,000)                                          

    Operations Director Nursing & Residential overspend     £984,000                                                    

    Overall underspend                                                    (£619,000)                                         

4.6 OP & PD Care Management (£1,603,000 underspend)

4.6.1 The main projected overspends/(underspends) contributing to the £1,603,000 underspend are shown in table 4 below and explained in the following paragraphs.

Table 4 OP & PD Care Management position
Care type	P6 cash limit	Projected spend (to 31/03/09)	Variation Over/(Under) spend
	£'000	£'000	£'000
Direct Payments	6,540	5,886	(654)
Assessment & Care Management	18,938	18,959	21
Purchased Domiciliary Care	27,412	28,953	1,541
Purchased Residential	25,716	24,785	(931)
Purchased Nursing	25,749	24,342	(1,407)
Other	18,394	18,221	(173)
Total	122,749	121,146	(1,603)

      

4.6.2  Direct Payments (underspend £654,000)

Discussed in more detail in section 5.      

    

4.6.3  Assessment & Care Management (overspend £21,000)

There are pressures on administration staff budgets, and pressures arising from the impact of the phased roll out of Hants Direct, which have been largely offset by delays in recruiting to vacant posts.

4.6.4  Purchased Domiciliary care (overspend £1,541,000).

Purchased domiciliary activity has increased since the beginning of the financial year, in both the number of service users (an increase of 372), and dependency of service users resulting in increasingly complex packages including more packages requiring two carers. The reasons for this include:

· the effect of the policy to support people in their own homes and avoid residential care where possible.

· recruitment to staff vacancies following the restructure and the consequent improvement in waiting times.

· high activity levels in acute trusts (Hampshire PCT reports a sharp increase in activity this year), which is likely in due course to impact on social care referrals, especially for older people. That will make it especially important to monitor the level of delayed discharges (currently running at 29.7 per week per 100,000 older persons population compared to a target of 27.5).

· pressure on residential capacity in some areas (e.g. the budgeted average OP domiciliary package cost is £6,300 per annum, North & East Hants are currently showing an actual average of £7,800 per annum) necessitating high-cost domiciliary alternatives.

· refocusing in-house capacity as the in-house service moves to a reablement service under the Home Care Modernisation programme.

· less take-up from domiciliary care to Direct Payments than allowed for in the budget, as reflected by the Direct Payments underspend.

Actions:

· As the overspend is offset by underspends on purchased nursing and residential and Direct Payments, and reflects the policy of caring for clients in their own homes, a specific action plan is not considered necessary at this stage, although this will be kept under review.

· As part of budget preparation for 2009/10 the purchased nursing, residential and domiciliary care budgets will be realigned to reflect the increased domiciliary care spend due to clients being enabled to remain in their own homes wherever possible.

4.6.5 Purchased Residential & Nursing Care (underspend £2,338,000)

The underspend on residential and nursing care is the result of:

· an overachievement of income targets

· lower than budgeted client activity, which is replicated in performance indicators that show fewer admissions to residential/nursing care.

The reduction in client numbers since budgets were set is due to:

· success in avoiding admissions through domiciliary support

· low availability of local capacity in some areas, as noted in 4.6.4 above

· unusually high client attrition over the winter months in the last financial year.

Although residential and nursing care client numbers have been steadily increasing since the beginning of the year, reflecting the impact of demographics, there are now more clients at home and fewer in residential and nursing care.

4.7 Operations Director Residential, Nursing & Day Care (£984,000 overspend)

      

The breakdown of the £984,000 overspend is shown in the table 5 below and the main overspends/underspends(-) are explained in the following paragraphs

Table 5 Operations Director Residential, Nursing & Day Care position
Care type	P6 Cashlimit £'000	Forecast £'000	Overspend/ Underspend(-) £'000
In-house Nursing	10,144	10,640	496
In-house Day Care	2,205	2,362	157
Management & Support	1,261	989	(272)
In-house Residential	12,598	13,216	618
Other	2,462	2,447	(15)
Total	28,670	29,654	984

    

4.7.1 In-house Nursing (overspend £496,000)

Despite actions to bring the overspend down there has been an increase of £136,000 since July 2008. Significant additional funding has been put into in-house nursing budgets for 2008/09 to address the inadequacies in the budget for staffing, however further pressures have been identified as follows:

· Shortfalls in non-staffing budgets, exacerbated by rising food costs.

· Dependency levels of clients in the majority of homes are still above the budgeted level, leading to additional overtime and agency payments.

· Short term sickness levels and staff turnover is particularly high.

Actions:

· Service Managers have identified actions that need to be taken on a unit by unit basis to address the overspend, including reducing food wastage, improving staff rotas and temporarily holding beds if necessary.

· On-going efforts are being made to reduce dependency levels.

· A staff review group including representatives from HR and finance has been set up to address the staffing issues.

4.7.2 In-house Residential (overspend £618,000)

The pressures on in-house residential are primarily due to:

· Increasing levels of dependency and clients with dementia, in particular, requiring additional staff.

· High vacancy levels at some homes are resulting in more expensive overtime and agency payments.

· The refurbishment of Bishops Waltham, due to be finished before Christmas, is causing an underachievement of income targets, without a compensating reduction in costs (as these are generally fixed).

· The funding made available for pay and benefits, particularly in relation to weekend enhancements and additional staff leave entitlement, is lower than the actual costs of the new pay framework.

Actions:

· As mentioned in 4.7.1 above, Service Managers have identified the actions that need to be taken by each unit to address the overspend.

· A new format of management reporting is being used in the budget commentary, requiring unit managers to monitor the main factors that dictate costs: occupancy, dependency, level of vacancies and sickness.

· Dependency levels continue to be managed down to match the average dependency upon which the budget is based, but this is a long term action.

4.8 Learning Disabilities - Operations (overspend £611,000)

The main variances contributing to the projected £611,000 overspend are shown in table 6 below and explained in the following paragraphs.

Table 6 Learning Disabilities - Operations
Care type	P6 Cashlimit £'000	Forecast £'000	Overspend/ Underspend(-) £'000
Purchased Domiciliary Care	9,192	10,052	860
Direct Payments	1,132	1,750	618
Assessment & Care Management	2,375	2,412	37
Purchased Residential including supported & other accommodation	30,329	29,413	(916)
Purchased Nursing	695	661	(34)
In House Residential	3,317	3,521	204
In House Day	6,298	5,671	(627)
Purchased Day Care	2,934	3,063	129
Other	984	1,324	340
Total	57,256	57,867	611

4.8.1 Purchased Domiciliary care (overspend £860,000)

The forecast pressure primarily relates to maintaining clients as independently as possible in the community rather than institutional care. As a result there has been an increase of 212 domiciliary care clients since the budget was set. The pressure also includes additional circa £200,000 for transition clients who were not known to Adult Services at the time the budget was set.

Joint work is required with Children Services to enable a fuller understanding of the numbers and needs of people transferring to Adult Services. This includes joint work to efficiently commission high cost placements of young people in the latter stages of their time with Children's services leading up to their transfer to Adult Services. A Transition Board, which includes both the Executive Members for Children's and Adult Services has now met twice and will consider such issues at further meetings. A Commissioning Officer (continuing care) will be appointed within Adult Services and be the departmental lead to support Children's services on accessing continuing care pre-18. Along with the Transition Team Manager they will add support to this process.

Due to the de-registration of Adult Placements schemes, clients who were originally coded to residential care have been reclassified as purchased domiciliary care in line with the financial standards governing the presentation of the accounts. As a result, this has increased the domiciliary care outturn by circa £300,000 with the opposite impact on the residential care outturn.

Action:

* Recruitment took place for the Transition Team Manager post but there were no suitable candidates therefore the post will be re-advertised. It is expected that the formation of a discrete Transition team will provide better intelligence on potential transition clients.


4.8.2 Direct Payments (overspend £618,000)

Discussed in more detail in section 5.          


4.8.3 Purchased Residential and Nursing care (underspend £950,000)

The projected underspend is primarily relates to do with:


* success in obtaining over £200,000 of Continuing Health Care for non-transition clients.

* for 2008/09 detailed work with providers with large portfolios of services has realised efficiencies in excess of £400,000 from right-sizing of care packages and efficiencies in provider overheads through utilising the South East Cost Model.

Action:

· Continue to apply South East Cost Model to drive efficiencies within the residential sector. However, it is anticipated that success in this area is nearing its limit given the savings above and the £1m reduction in costs achieved in 2007/08.


4.8.4 Purchased Day Care (overspend £129,000)

The projected pressure primarily relates to maintaining clients as independently as possible in the community. Also, purchasing day care as a top-up to other community services is a more cost effective way of supporting people in the community rather than residential care. As a result, there has been an increase of 115 purchased day care clients. We are reviewing purchased day care to see what can be offered more conveniently through direct payments.


4.8.5 In House Day Care (underspend £627,000)

The projected underspend primarily relates to the fact that there are a number of staff vacancies in the day care units as well as close monitoring of the transport costs relating to the units.

Actions:

· There has been a delay in the modernising of day services. An offer of appointment has been made to a project manager to start in early 2009.

· To continue to scrutinise staffing levels and achieve savings through vacancy management, where possible without impacting the service quality.


4.8.6 In House Residential (overspend £204,000)


The overspend is largely the result of the increased dependency levels of the clients in the in-house units as well as inflationary pressures on utilities, including gas and electricity. Moreover, people with significant complex needs have been accommodated in the in-house units, thereby reducing high cost purchased care placements.

4.8.7 Summary of LD actions

Maximise the success of the high cost placement reviews, re-advertise for the transition team manager post and implement measures to increase take-up of direct payments as part of the County plan. Only recruit to essential vacancies across the whole of the service to balance operational need and risk. Further work is being undertaken to fully assess the impact of supporting people, demography and dependency pressures (see paragraph 8.1.1).

Management intend to take action to bring the overspend down to balance forecast spending in line with the budget.

There is provision for ordinary residence pressures of £0.7m. At this stage it is uncertain whether this provision will be required and it may be carried forward to next year.

4.9 Mental Health - Operations (underspend £120,000)

4.9.1 The main variances contributing to the underspend of £120,000 are shown in the table below.

Table 7 Mental Health operations position
Care type	P6 Cashlimit £'000	Forecast £'000	Overspend/ Underspend(-) £'000
Assessment & care management	4,668	4,946	278
Purchased Nursing	451	292	(159)
Purchased Residential	2,282	2,461	179
Other	2,702	2,284	(418)
Total	10,103	9,983	(120)

4.9.2 The demand for Mental Health services has been kept under control through proactive use of the outreach service. Nevertheless, since the budget for 2008/09 was set there has been an increase of 12 purchased residential partially offset by a reduction of 5 nursing care clients. There has also been a circa £20,000 increase in demand for residential substance misuse services. These pressures (circa £200,000) have been largely offset by the release of £150,000 of the £300,000 provision for the risks around the North Hants Reprovision project with Health. It is believed that the £200,000 represents adequate provision for the risks posed by the project.

4.9.3 The overspend in Assessment & Care Management is the result of the recoding of the actual costs of Support Time and Recovery (STR) staff from the Other category. However, the budget for these has not been moved from Other to Assessment & Care Management. The budget will be realigned for the 2009/10 budget to reflect this. The remainder mainly relates to vacancies in the STR teams. As a result, the £418,000 underspend in the Other category more than offsets the overspend in Assessment & Care Management.

4.9.4 There have been staffing virements totalling £304,000 in 2008/09 to reflect changes within the care group, especially the closure of building-based Day Services. As a result, day service posts have been converted to support work and incorporated into Community Mental Health Teams. Thus, there has been an increase in the budget for Assessment & Care Management and a decrease in In House Day Services. As this is above the £250,000 virement limit, Executive Member approval is required.

5 Direct Payments (underspend £82,000)

5.1 As a result of the experience gained in the Self Directed Support (SDS) Phase 1 in Basingstoke it has been agreed to roll out the SDS Direct Payments process across the county, enabling service users to take more control of the method in which they fulfil their personal outcomes.

5.2 To achieve this the service has re-engineered the Direct Payments process, delivered road-shows to staff during October and November and are setting targets to support the management action outlined below.

5.3 The current budget position for each client group is reflected in the table below and discussed in subsequent paragraphs.

Table 8 Direct Payments position
Care type	P6 Cashlimit £'000	Forecast £'000	Overspend/ Underspend(-) £'000
Commissioning & Partnerships	243	232	(11)
Older People & Physical Disabilities	6,540	5,886	(654)
Learning Disabilities	1,132	1,750	618
Mental Health	163	128	(35)
Total	8,078	7,996	(82)

Table 9 Direct Payments overall activity position
Care type	P6 Budgeted activity	Current activity	Variation Over/(Under) achievement
	No. of payments	No. of payments	No. of payments
Older Persons	300	171	(129)
Physical Disability	437	371	(66)
Learning Disability	183	188	5
Mental Health	24	22	(2)
Total	944	752	(192)

OP/PD (underspend £654,000)

5.4 The budget for OP/PD has been set at a high level, in anticipation of the effect of Personalisation and Self Directed Support (SDS), combined with management action to increase Direct Payment client activity to meet Performance Indicators. It was envisaged that the increased client activity would be transferred from domiciliary care. Client activity has substantially increased, however, due to client attrition, the net increase since budgets were set is 57 clients (24 OP and 33 PD), to a total of 542 clients, and therefore significant further increases are required to reach the budgeted level of 737 clients.

LD (Overspend £618,000)

5.5 There is a £618,000 overspend for LD direct payments, a movement of £170,000 since the previous report. This is due to an increase of 6 clients.

5.6 The actions below cover all client groups, specific client groups actions are indicated.

Actions:

* Direct Payment Officers have been recruited to assist staff in setting up Direct Payments and monitoring packages, and a staff road shows held in October/November to provide more information for staff.

* New Direct Payment user packs and a Direct Payments website are being launched.

* Continue to promote direct payments as part of the departmental plan to increase take-up of direct payments, including "taster" sessions e.g. targeted at people using day services, to develop knowledge and understanding amongst clients and carers of the advantages through personalisation of a direct payment.

* Work with day services and, in particular, day service brokers to assist people in the community via a direct payment as opposed to a traditional care package.

* One-off direct payments to existing vulnerable clients will be repeated this year, following positive feedback from clients and also as a method of encouraging more clients to use Direct Payments for their ongoing care (OP/PD).

* Levels of one off payments need to be considered following Commission for Social Care Inspection (CSCI) areas of improvement.

* District Service Managers have individual targets to increase DP take-up to meet performance targets, which continue to be monitored monthly (OP/PD).

6 Contingency and centrally held (underspend £2,083,000)

6.1 The underspend shown against contingency and centrally held is mainly due to a planned underspend on winter pressures of £1.6m.

6.2 £3.3m of contingency and centrally held relates to winter pressure. At this stage £644,000 has been earmarked for a comprehensive winter plan that has been developed based on previous year's experience in managing increased pressures over this period. It is planned to carry forward £1.6m of contingency assuming unforeseen winter pressures do not exceed £1.7m.

6.3 This budget also includes £232,000 being the balance of the 50% (£932,000) share of the underspend from 2007/08. Allocations of £500,000 for Innovations and £200,000 for Safeguarding were made earlier in the year. The balance of £232,000 is currently unallocated.

7 Client activity

7.1 Table 10 contains a summary of the movement in the individual care types for Client Activity. Appendix 1 provides further analysis by:

· summary (client group activity by care type)

· detail (client group activity by care type and by external and in-house provider.

Table 10 Client Activity				Movement Between	Variance Between
Care Type	Budgeted Activity	Jul-08	Sep-08	Jul 08 & Sep 08	Budget 08 & Sep 08
Nursing Care - External	1,532	1,461	1,467	6	(65)
Nursing Care - In-house	465	417	409	(8)	(56)
sub-total Nursing Care	1,997	1,878	1,876	(2)	(121)
Residential Care - External	2,659	2,598	2,624	26	(35)
Residential Care - In-house	761	767	769	2	8
sub-total Residential Care	3,420	3,365	3,393	28	(27)
Domiciliary Care - External	6,286	6,911	7,026	115	740
Domiciliary Care - In-house	692	468	444	(24)	(248)
sub-total Domiciliary Care	6,978	7,379	7,470	91	492
Day Care - External	1,672	1,850	1,863	13	191
Day Care - In-house	1,442	1,606	1,597	(9)	155
sub-total Day Care	3,114	3,456	3,460	4	346
Direct Payments - External	944	734	752	18	(192)
Direct Payments - In-house	0	0	0	0	0
sub-total Direct Payments	944	734	752	18	(192)
Other - External	0	195	196	1	196
Other - In-house	0	2	2	0	2
sub-total Other	0	197	198	1	198
Grand Total	16,453	17,009	17,149	140	696

Between July 2008 and September 2008 client numbers have increased by 140. There are 696 more clients than the budget allowed for, in overall terms.

7.2 Learning Disabilities

7.2.1 The client activity figures for Learning Disability are overall 480 more than budgeted, mainly in domiciliary care (212) and day care (115). This reflects the drive to maintain clients in their own home with residential and nursing clients only increasing by 4 including known transition clients from Children's Services. However, as reported in the previous Executive Member report it also reflects the significantly better recording of block contract domiciliary and day clients through the new block contracting module that was introduced at the start of the financial year.


7.2.2 The fact that the average cost of the purchased packages is respectively 4% and 21% less than budgeted reflects the use of shorter, intensive packages to maintain clients in the community and avoid residential care. Residential and nursing care activity is 4 more than budgeted though this has been offset in financial terms by the success in applying the South East Cost Model to reduce prices and in securing Continuing Health Care.

7.3 Mental Health


7.3.1 Apart from day care, which is 158 more than budgeted, the client numbers are in line with the budgeted activity. This is because since the budget book was published, additional client activity has been included in this client group. The purchased day care is 21 more than budgeted and this is mainly due to the fact that Mental Health makes significant use of externally purchased Support Work contracts which have short term SWIFT provisions attached to them. Due to the nature of the support provided the number of clients can fluctuate.

7.4 Older People

7.4.1 Both nursing and residential client activity is lower than budgeted for, however this is primarily due to the high client attrition over the Winter months of the last financial year, and client activity has been increasing since the beginning of the current financial year. Domiciliary clients are 169 higher than budgeted for, again reflecting the drive for clients to remain in their own home. Finally Direct Payments activity is currently 129 clients below budget, as significant increases in client activity were incorporated into the budget that have only been partly realised.

7.5 Physical Disabilities

7.5.1 The main variations to budgeted activity are domiciliary care being 100 clients above the budgeted levels and Direct Payments activity being 66 clients below budgeted levels for the reasons mentioned above in para 7.4.1.

8 Emerging Issues                                                                                                                         

8.1 Learning Disability -  Supporting People

8.1.1 The Supporting People (SP) review of Learning Disability has created a circa £600,000 reinvestment fund for learning disability. The majority of the investment for 2008/09 has been used by SP for one-off extensions to the old contracts. This has allowed the Learning Disability service to fully review the clients affected by the strategic review and make ongoing savings in their costs. As the reinvestment fund is recurring money it will still be available for learning disability in 2009/10. Further work is planned between commissioning managers and Supporting People staff to review, re-design and implement a re-investment strategy for 2009/10 that operational staff can implement.

Action:

· The Commissioning Team are holding discussions with Supporting People to discuss how the reinvestment fund can be used in 2009/10 along with another circa £400,000 of SP savings that will be generated through the new contracts following the implementation of its Strategic Review.

8.2 Pressures in Acute Hospitals

8.2.1 Hampshire PCT continue to report a sharp increase in activity and spend in acute hospitals, with some acute trusts, notably Southampton and North Hants, planning to open additional beds this winter to cope with demand.  It is inevitable that this will impact on social care (especially OP), with some areas already reporting pressures due to hospital discharges and performance indicator D41 (delayed transfer of care) is showing a worsening position. 

8.2.2 To date, there has not been a significant rise in delayed discharges fines, as the Hospital teams are coping with the additional pressure, but this cannot be sustained in the long term. Therefore, a Winter plan has been prepared to use part of the Winter Pressures contingency to ensure that consistent staffing levels in Hospital Discharge Teams can be maintained and to secure a consistent level of post hospital discharge social care services.

8.3 Learning Disability Budget transfer

8.3.1 Adult services met with the PCT to set out the process. The PCT have agreed to provide a list of all the contracts that will be transferring. Nevertheless, there still remains a high level of risk for HCC in accepting responsibility for all the liabilities covered by the contracts by the 1 December 2008 deadline set by the Government. 


8.3.2 In light of these risks, the department, along with other LAs, will be lobbying the Dept of Health to move the deadline or to implement in another mechanism to revise the transfer amount. 

8.3.3 As well as the service contracts the department is also seeking some financial recognition of the overhead costs of commissioning, contracting, legal and finance related to the services that are transferring.


8.4 Learning Disability Campus Reprovision

8.4.1 This campus reprovision projects are being funded from the Campus Programme Revenue Grant, which is £6m over 3 years. This grant supports the target to ensure that all remaining campus accommodation is closed by the deadline set by Central Government of April 2010. It will also ensure that everyone who has lived in campus accommodation will have access to high quality housing and care.

8.4.2 In terms of the ongoing campus projects, significant progress has been made by HCC and the PCT in meeting the deadline of April 2010. The South West project is expected to be completed by the end of November 2008 whilst the last remaining project in the South East is making good progress.

8.4.3 In addition to the above projects there will be separate projects focussing on the 250 residential care and 120 supported living clients who have already come from previous campus reprovision. The grant will fund a team to review the services for these clients to ensure that the client's needs are being met through a co-ordinated approach of support and care.

8.4.4 The grant rules permit 25% of the grant to be carried forward to next year and following discussions with the PCT to finalise the spending plan, it is requested that £222,000 (25%) of the 2008/09 grant be carried forward to next year to maximise the benefit of the grant.

8.4 Learning Disability Integration

8.4.1 An integrated Management Structure has been established, which is a mix of NHS and HCC staff. The Head of Integrated Service and 4 of the 5 Locality Service Managers were in post at the launch of the service on 1^st July 2008, along with the Integrated Team Managers. Some further recruitment will hopefully see management structure at full complement by the year end. Section 75 legal agreement is being finalised for signing off by 31^st December 2008.

8.4.2 The Winchester team will move to new co-located offices in Otterbourne (November 2008) and the Havant and East Hampshire Team to Havant Civic Offices (February 2009).

8.4.3 Formal staff consultation is currently taking place on the outline service structure, and in the months of January 2009 to April 2009, the final integrated structure will take place with 8 fully integrated teams operating from within 5 localities.

8.5 Stroke Grant

8.6.1 In association with the PCT a strategy for the use of the 3-year Stroke Grant (£145,000 per year) has been drawn up. This will seek to secure comprehensive access to Stroke Association support groups across the county, thus providing active advice and peer support to survivors and their families. There will also be dedicated stroke specialists within our own community response teams in order to ensure that maximum independence is achieved following a stroke and NHS rehab. Data capture will be undertaken to enhance our knowledge of this group of service users specifically. This will contribute to keeping people at home and ensuring that effective advice and information is available.

8.6.2 Due to the timing of the grant notification from the government and discussions with key strategic partners to develop robust spending plans it is anticipated that £100,000 expenditure will be incurred in 2009/10. It is recommended that £100,000 grant be carried forward to next year to maximise the benefit of the grant.


8.7 Cost Pressures on providers


8.7.1 The credit crisis may add to the pressures on some providers as a result of business failure. Market conditions are currently very difficult. A number of major providers, including national organisations, are experiencing significant financial problems. In some cases this is due to the financial burden of earlier take-over activity. It also reflects rising costs in the sector. The department is preparing to deal with the risk of business failure. One of our key responses is to ensure that our inflation settlement fairly reflects market conditions, otherwise we may increase the risk of business failure and consequential disruption of service users.


8.8 Other emerging issues

8.8.1 There are no material changes in the other emerging issues highlighted in the previous budget monitoring report to the Executive Member on the 1 October 2008 and listed below:

· Pay and Benefits Appeals (para 7.2).

· Funding approvals for additional staff (para 7.4).

· Learning Disability -Additional clients from Ordinary residence (para 7.5).

· Self Directed Support - Phase 1 challenges (para 7.5).

· Independent Living Fund - reduced contributions pressure (para 7.5).

9. 2008/09 Capital Programme Position

9.1 The total capital cash limit for 2008/09 is £12.788m as reported on 1 October 2008.

9.2 The overall position is very similar to the 1 October reported position with half of the programme now contractually committed.

9.3 The capital programme position is summarised  in table10 below. More details are in Appendix 2.

  

   

*Carried forward from 2007/08 revenue.

10. Conclusions:

10.1 Every effort will be made to further strengthen the current underspend position to carry forward maximum resource to 2009/10 where many budget pressures will be faced. The key actions identified within the report being:

· To continue to apply South East Cost Model to drive efficiencies within the residential sector for LD.

· To finalise discussions between SP & LD with regards to satisfactory options for the potential £240,000 shortfall in savings and £400,000 of funding withdrawal of non housing related support.

· To increase the take up of direct payments within OP/PD Care Management.

· To prepare an action plan for in-house nursing and residential on a unit by unit basis to address the overspend.

11 Summary Recommendations:

11.1 That the current budget position, which shows the 2008/09 projected underspend position to be £2,268,000 (0.8% of the cash limit) at 30 September, be noted and management actions to support budgetary control be approved.

11.2 That the proposals for a planned underspend of £3.9m and carrying forward grant where spending is planned next year be approved as listed below.

o £222,000 LD Campus Closure Grant

o £100,000 Stroke grant

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o £322,000 Total

11.3 That following conversion of day service posts into Community Mental Health Teams, approval be given for a £304,000 increase in the budget for Assessment & Care Management and a £304,000 decrease in the budget for In House Day Services.

12. Appendices

12.1 Appendix 1 - Client Group Activity analysis

12.2 Appendix 2 - Capital Programme 2008/2009 position as at September 2008

12.3 Appendix 3 - Demand led budgets - activity & expenditure graphs

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