Agenda item

The Panel received the Council’s Draft Budget and 5 Year Medium Term Financial strategy (MTFS) 2024-2029 proposals, relating to the Panel’s remit. The Panel was asked to consider the proposals and to provide recommendations to Overview & Scrutiny Committee on these proposals. The report was introduced by Neil Sinclair, Head of Finance (People) as set out in the agenda pack at pages 7-92. The Cabinet Member for Children, Schools and Families was present for this item. The Assistant Director for Safeguarding and Social Care was also present for this item, along with the Assistant Director for Schools and Learning.

By way of introduction, the Panel was advised that the December Cabinet report set out that there was an overall budget gap of around £16.4m. This budget gap was largely due to demand pressures, particularly in Adult Social Services. Finance would be working with the Directorates between now and February to close this budget gap and to present a balanced budget to Cabinet in February. It was noted that nationally, a lot of councils were struggling to set a balanced budget and that it was a very challenging picture across the board.

It was noted that within Children’s there were a number of challenges arising from the demand pressures created from more people needing those services and from the increasing costs of those services. These included the reorganisation of SEND transport. Appendix 5 of the report set out that there were new savings around the transition of young people into adulthood. This was effectively a new investment in the Adult Social Care and was reflected as a new growth proposal in that budget area, but it sat as a saving within the Children’s budget. There were also around £3m of growth proposals in Children’s over the next three years, which reflected additional investment in recognition of the high cost of children’s social care placements and inflationary pressures within that market. The capital programme in Children’s showed £64m of new capital investment, mainly  in schools infrastructure which included the costs of dealing with RAAC and other maintenance challenges.

The Cabinet Member commented that the draft budget position in Children’s was a C. £600k overspend, which had come down from the Q1 position. The Cabinet Member commented that the fact the service had got to a position where it was presenting an almost balanced budget was very impressive and reflected a huge improvement from previous years. The Cabinet Member set out that the growth in transition services was something that had been in discussion for a long time, and was a key development. It was anticipated that having a dedicated focus on transitioning children with SEND, rather than doing so on an ad-hoc basis would be transformative for the lives of the young people involved and would also provide cost savings to the Council. The Cabinet Member set out that a lot of the pressures faced by Children’s were national pressures and were not down to the service. The increasing prevalence of private equity in the Children social care market was seen as a worrying trend and one that would inevitably extract money out of the system. The Panel was advised that a lot of the schools budget was reflected in the Dedicated Schools Grant, which was not reflected in these budget papers as it went straight to the schools themselves.

The following arose as part of the discussion of this report:

a.    The Panel welcomed the fact that last year’s savings were achieved and that the overall budget position in Children’s was close to being a balanced position. The Panel also commented that this was the only opportunity that it would have to scrutinise the budget and in that context it sought assurances about the extent to which further savings would be extracted from Children’s services in order to meet the budget gap. In response, the Cabinet Member set out that in the past the service had not put up savings that it couldn’t achieve. The Cabinet Member set out that the service knew where the hotspots were and it was around residential accommodation, which was very costly and even a small number of additional cases where secure accommodation was needed, could have a detrimental impact on the budget. The AD Safeguarding and Social Care echoed the Cabinet Member’s comments, reiterating that the service only put forward savings that achieved the balance between efficiencies and safety of the children affected. The Panel was advised that the service recognised the inherent pressures within the residential placement market and that it was aggressively pursuing an insourcing model, with a proposal for a new mother and baby residential unit. The Head of Finance set out that a collaborative approach had been taken to the budget setting process and that Finance had worked closely with services. The budget included a growth budget so that additional investment was provided around demand led growth. Work to present a final balanced budget was ongoing, but it had been a challenging budget setting process in the context of comparing it to recent years.

b.    In response to a follow up, officers advised that at present, there were no additional savings proposals expected from Children’s Services.

c.    The Panel sought further assurances about the possibility of further savings being made in Children’s Services, given the draft budget position of a £16.4M gap. In response, the Cabinet Member advised that there weren’t many areas that could be cut in Children’s Services, given the statutory responsibilities and the need to ensure the safety of the children involved. The Cabinet Member elaborated that the Service had recently achieved a Good Ofsted inspection rating and that the Council could not risk jeopardising this with cuts to social workers. The Cabinet Member suggested that there was no political will to make savings in youth centres. Similarly, there was no desire to make savings in Early Year’s provision, particularly as the government provided a lot of funding for this. The Council was already engaged in a DfE led savings programme around SEND, the Safety Valve programme. It was commented that there was very little room for manoeuver within the Children’s budget and there were no obvious areas where additional savings could be made.  

d.    The Panel sought assurances around RAAC and schools infrastructure and the extent to which the Government had committed to covering the costs of this. In response, the officers advised that discussions with the DfE were ongoing and that in essence, they had committed to covering the capital costs of these works, but that the Council had not received any money to date. Officers set out that the budget papers highlighted a risk that there were also revenue costs incurred by schools arising from RAAC and that the government had not agreed to cover all of these costs. Examples of these costs included; provision of temporary classrooms, additional IT costs and catering costs. Any costs incurred that were not directly related to the construction costs in repairing defective school buildings, could have an impact on the General Fund revenue budget if the government did not provide funding.

5. The Panel sought assurances that the allocated budget was enough to meet demands. In response, the Cabinet Member advised that the budget was the budget, and that the reality was that there was no more money. Growth Funding for 2022/23 & 2023/24 allowed the service to eradicate the historical overspends that had previously existed and that this had made a big difference. In relation to a follow up in relation to non-statutory services, the Cabinet Member advised that she did not want to see any cuts to non-statutory services, but that she was unable to give any firmer assurances at this stage.
6. The Panel sought clarification about whether the new round of budget savings proposals would go out to consultation. In response, officers advised that the draft budget went out to consultation and the responses to it would help formulate the final budget. However, there was no scope for a further consultation process, given the need to agree a budget for February Cabinet. The Cabinet Member emphasised that all councils were facing similar challenges around their budgets and that this was a national issue.
7. The Panel sought clarification around the new revenue saving proposal in relation to development of a new transition service. The Panel requested more information on how this would work and why it was profiled so that £673k would be saved in the first year from a total saving of £4.5m. In response, officers advised that this was a dedicated service to provide support to young people with SEND as they transitioned in to adulthood. Officers advised that young people with a high level of care and intersectional needs attracted the highest fees and that this occured within a broken market. The proposal would establish a programme of work to bring these young people in borough. The profiling reflected the amount of work that needed to be done across a number of different teams and the profiling reflected the number of cases that existed at a particular age and the knowledge that they would need support at key age points of 18, 21 & 25. Officers advised that bring forward the savings was not something that management could recommend to Members due to the work that needed to be done in the background and the potential negative impact on young people. Part of this related to trying to ensure that Children in Care could benefit from the high calibre of schools in the borough, and who continued to generate the highest amounts of spending (rather than being sent out of borough). The capacity to accelerate these savings was limited by the details of the work required in the background from a range of areas, such as schools, Safety Valve, HEP. The whole system had to work together to achieve this. The Cabinet Member set out that by the time a child received an EHCP, it could often be too late to change outcomes. This saving was a recognition that spending money on young people to support them would generate savings in future from adult social care. The saving did not just relate to educational needs, it also supported their health, relationships, independent living and employment opportunities.
8. In relation to a follow-up, Finance advised that the savings profile was based on the numbers of children that were known would transition to adulthood in the next six years and the same number of young people were used to profile the corresponding growth proposal for Adult Social Care. The savings were showed in the Children’s budget and the investment was reflected in the Adults budget as growth.
9. In light of the need to make further savings and the significant revenue costs accruing from the capital programme, the Members queried whether there were any proposals to review the capital programme. In response, the Head of Finance advised that following an extensive review of the capital programme, there were no plans at this stage to undertake any further amendments to it as part of the final budget setting process.
10. The Panel determined that it would make a recommendation to Cabinet on these budget proposals around the fact that it did not want to see any further savings being extracted from the Children’s service, particularly in light of recent successes such as the positive Ofsted inspection.

RESOLVED

That the Panel considered and provided recommendations to Overview & Scrutiny Committee on the Council’s draft budget and 5 year MTFS 2024-2029, relating to its remit.