Agenda item

Scrutiny of the 2023/24 Draft Budget and 5 Year Medium Term Financial Strategy 2023/2028

To consider and provide recommendations to Overview and Scrutiny Committee (OSC), on the Council’s 2023/24 Draft Budget and 5 Year Medium Term Financial Strategy (MTFS) 2023/2028 proposals relating to children and young people.

Minutes:

Josephine Lyseight (Head of Finance (People)) introduced the 2023/24 draft budget for 2023/24 and 5 Year Medium Term Financial Strategy in respect of children and young people.  She reported that the proposals had been developed before both the government’s Autumn Statement and the Local Government Finance Settlement.  The implications of these for Haringey were currently being analysed by officers.  The proposals included additional growth of £14.8 million, £4.9 million of which was for Children’s Services. 

 

The proposals to make revenue savings of £1.5 million were in addition to existing targets.  £1 million of this would come from improved commissioning.  There was also a growth proposal to add £1 million to the budget in order to mitigate the effects of inflation on commissioning.  It was also proposed to save a further £0.5 million through extension of existing savings programmes.  This involved continuing to work with young people to support their needs and prepare them for stepping down from high cost placements to placements with families.  The Children’s Service had so far proven to be exceptionally effective in delivering savings targets. 

 

The Panel noted that the number of children being taken into care nationally had gone up and this was often due to mental health issues.  Beverley Hendricks (Assistant Director for Social Care) reported that an increase of people with mental health needs was being seen in Haringey.  There was demand modelling and a LAC sufficiency strategy and this had focussed on identifying children who could no longer be cared for in their home and planning with partners regarding early intervention to prevent needs from escalating.  The Panel asked whether the proposals to reduce the number of high cost placements by greater use of foster care were realistic.  Ms Hendricks reported that not all foster carers lived in the borough. Recruitment of foster carers was being extended to communities that it had not been previously possible to engage with.  She was confident that recruitment targets could be met.  Targets for had been met through schemes like supporting foster carers to build additional bedrooms. 

 

Ms Lyseight outlined the growth proposals, which amounted to circa £4.9 million.  There would be additional funding for:

·         The increased cost of social care placements;

·         The rising demand and cost of SEND transport;

·         2022/23 base budget pressures;

·         Continuation of the extension of free school meals;

·         Rising Green Youth Centre; and

·         The Social Workers in Schools scheme.

There was one additional proposal for capital funding and this was for the Safety Valve programme, The majority of the scheme would be funded by the High Needs Capital Allocation Fund and an application made to the Department for Education (DfE) Safety Valve Capital Programme that was pending approval would assist in the delivery of associated revenue budget savings.  Approval of the Council’s bid was still awaited.

 

In answer to a question regarding Dedicated Schools Grant (DSG), Brian Smith (Schools Finance Manager) stated that it was split into four blocks.  These were all calculated differently in a way that was determined by the government.  The government for the schools block had provided additional funding of £7 million.  However, there had been a reduction of 2.5% in the central schools services block, which had also been impacted by falling school rolls.  The funding helped fund statutory services that were undertaken by the Council, such as school admissions and education welfare.  There had been an increase in the early years block due to higher unit numbers.  This had arisen due to more children being in early years compared with numbers during the height of the Covid pandemic.  There had been an increase of 10% in the high needs block.  The additional funding was in recognition of the additional responsibilities for special educational needs given to local authorities since 2014. 

 

Ms Lyseight reported that the current deficit in the DSG was shown separately.  All local authorities had been given special dispensation to do this in acknowledgement of the significant pressures that there were arising from the high needs funding block.  The Safety Valve programme would allow the Council to bring reduce the deficit and was therefore welcome.  In the absence of the special dispensation, the overspend for Children’s Services would be approximately £24 million. 

 

The Panel raised the issue of consultation on the budget, which was currently taking place.  It was felt that this needed to be a meaningful process and should not be reliant on the use of questionnaires, which often prompted limited returns.  It was also felt that greater attention needed to be given to the equalities impact of proposals and that Equalities Impact Assessments should provide a greater level of detail than was currently the case.

 

In answer to a question regarding funding for early years in the DSG, Nick Hewlett (Acting Assistant Director for Schools and Learning) reported that funding was based on the number of hours provided.  Numbers of children in early years settings had been going up.  However, the challenge for schools was the inflexibility of what they were able to offer which often did not meet the needs of working parents. 

 

In response to a question on where the greatest levels of risk lay, Ms Lyseight stated that these came from matters that the Council was not in a position to control.  These included the cost of living crisis, inflation and high energy costs.  In addition, there was also the increasing costs of care, which the service was trying to mitigate through savings.   Jackie Difolco (Assistant Director for Early Help, Prevention and SEND stated that reducing the overspend within SEND transport budget was a significant risk as this was a statutory duty and there  were now higher numbers of children and young people eligible for travel assistance. New policies and actions had been agreed to mitigate against budgetary pressures and she was confident that these would be effective over time.  Ms Hendricks stated that in social care there was a risk arising from market factors.  The Council was very reliant on private sector providers for placements and they had been subject to pressures from inflation and the cost of living.  They had raised their charges in response to this without negotiation.  Work was taking place to develop closer relationships with providers in response, particularly those providing high quality placements for niche or acute needs.  There were also risks arising from the volume of unaccompanied asylum seekers, which was an issue across Europe.  The Home Office had indicated that it wished to work with local authorities in a different way and was increasing the levy that was provided.  However, the levy did not take fully into account the acuity of needs.  The Panel requested access to the regular quarterly updates of the risk register for the service.

 

In answer to a question regarding the level of inflation, Ms Lyseight stated that the budget proposals had assumed a level of 5%.  However, the current level was higher than this although it was estimated that it would reduce to 7.4% in due course.  The budget proposals would be reviewed in the light of this and decisions may be needed to address the increased level to balance the budget.  In response to a question regarding whether the proposed growth funding of £1 million for SEND transport would be sufficient, she stated that any increase to this would need to be balanced by savings of the same amount unless additional funding could be found from elsewhere. 

 

Ms Difolco reported that the main pressure on SEND transport arose from increased fuel costs, which had increased from 11% to 42% within one year. Mitigating actions included moving from a one year contract to three year contracts with providers to ensure stability, continuity and best value.  Quarterly reviews had also been built into the contract monitoring cycle to enable a flexible response to accommodate increasing and decreasing costs.  Fuel costs were expected to decrease.

 

In response to a question regarding the affordability of the capital programme, Ms Lyseight reported that it constituted a significant investment.  Some of it was externally funded and efforts were being made to maximise the amount from these sources.  Some was self-financed and involved borrowing.  It was hoped that at least some of the investments would lead to revenue savings and these would be sought to help pay back borrowing.  The capital programme would be reviewed annually and closely monitored for its impact on revenue costs.

 

The Panel made the following comments regarding the draft budget proposals:

·         Consultation with residents and stakeholders on budget proposals in future years should aim to be more meaningful, reach a wider range of people and provide an enhanced opportunity for them to influence proposals;

·         In view of the changeable external environment, external risks and measures to mitigate them needed to be monitored rigorously so that any changes could be responded to in a timely manner.  In particular, the budgetary impact of the Safety Valve programme needed to be closely monitored.  The Panel requested that this be included in the regular quarterly finance updates to the Overview and Scrutiny Committee; and

·         The equalities impact of specific budget proposals should be outlined in greater depth in future years in order to provide Members with a clearer understanding of them and copies of Equalities Impact Assessments (EIAs) provided for information. 

 

AGREED:

 

1.    That the Panel recommend:

(a)  That consultation with residents and stakeholders on budget proposals aims to be more meaningful, reach a wider range of people and provide a greater opportunity for them to influence proposals;

 

(b)  That in view of the changeable external environment, external risks and measures to mitigate them be monitored rigorously so that any changes can be responded to quickly;

 

(c)  That the impact of the Safety Valve programme be closely monitored and that this be included in the regular quarterly finance updates reported to the Overview and Scrutiny Committee; and

 

(d)  That the equalities impact of specific budget proposals should be outlined in greater depth in future years in order to provide Members with a clearer understanding of them and copies of Equalities Impact Assessments (EIAs) provided for information. 

 

2.    That the regular quarterly updates of the risk register for the service be shared with the Panel.

Supporting documents: