Agenda item

To consider and make recommendations to Cabinet on the draft budget 2025/26 and the Medium Term Financial Strategy 2025/30.

The Panel received a report which set out the draft 2025/26 budget and 2025-2030 Medium Term Financial Strategy. The report set out the budget setting process for 2025/26 to date and also set out the further steps that would be taken prior to its final sign-off by Full Council in March. The report was introduced by Neil Sinclair, Head of Finance (People) as set out in the agenda pack at pages 82-141. The Cabinet Member for Children, schools and Families was present for this part of this agenda item, along with a number of officers from Children’s Services; the Director of Children & Young People’s Services, the Assistant Director of Safeguarding & Social Care, and the AD Early Help, Prevention and SEND. Cllr Dana Carlin, Cabinet Member for Finance and Corporate Services was also present for this item.

The Chair advised that the Panel would be taking sections of the report in turn. The Panel would start with a discussion on the overall budget and its wider financial context (cover report and appended Cabinet report), then they would go through the relevant budget pressures (Appendix 1), then the new savings proposals (Appendix 1a), followed by amendments to the capital budget relevant to Children & Young People’s Services (Appendix 1b), and they would then look at the pre-agreed savings tracker (Appendix 1c). The following arose during the discussion of this agenda item:

1. The Chair sought assurances around how the service was responding to the pressures arising around staff capacity. In response, the Director advised that she monitored the data in Children’s very closely. Sometimes the data points came down, such as child protection plans and sometimes the data points went up such as EHCPs. The Director assured Members that she scrutinised the data forensically in order to make sure there was sufficient capacity in the team. An example given was around the fact that there was a pressure around EHCPs identified in the service and that, following conversations with the Cabinet Member and Director of Finance, a growth bid was submitted as it was recognised that this would have an impact on the deliverability of the service. The Director also set out that she worked closely with her management team to look at how they could address the demand where possible. The Director suggested that she suspected the additional support put into Early Year’s provision was having a positive impact on the number of child protection plans.
2. The Panel commented on a report by the Competition Markets Authority and a subsequent recent statement by the Secretary of State around providers making excess profits from social care placements and queried whether the action proposed by the government around capping care placements would ease the pressure on local authorities. In response, the Director advised that this was something that she recognised and that the problem had been getting worse for some time. The Director advised that in the past she had been asked to approve £18,600 per week placement for one child. The Director commented that she welcomed any action taken to try and offset the pressures in high-cost placements. The Cabinet Member advised that she was hopeful that the proposals put forward in Parliament would curtail the market but cautioned that there would also have to be a degree of investment from government. The Cabinet Member suggested that Council’s would have to start talking to each other and looking at developing consortia for insourced provision. The Director commented that one of the drivers on the cost of placements was lack of capacity, and that there was a degree of concern that the changes might result in providers exiting the market quickly, before the sector has time to adjust.
3. The Chair raised concerns about recent articles in the press about local authorities placing vulnerable children in unsafe housing as part of care placements. In response, the Director advised that the report she had seen was around children being placed in campervans and Airbnb accommodation. The Director provided assurances that this did not happen in Haringey, however it was acknowledged that finding suitable placements could be a difficult and stressful process. Fundamentally there just weren’t enough placements. The AD Safeguarding and Social Care advised that the service worked hard to find and monitor suitable placements for children. 
4. The Panel sought assurances around the fact that the forecast budget pressures in the report were projected to reduce over the five year term of the draft MTFS and queried the extent to which this was a robust assumption. In response, Corporate Finance advised that the additional investment to offset the budget pressures around ECHPs and the education psychology service were only in Year 1, rather than being recurring. That explained why the pressures reduced in the table that was being referred to. The Cabinet Member explained that once money had been put into the base budget that it stayed there, it just that there was no further increases projected in Years 2 onwards. Overall, the MTFS represented over £14m worth of revenue investment in Children’s Services.
5. As a follow-up, the Panel sought assurances about the forecast budget pressures around EHCPs and School Transport and whether the investment was sufficient to meet demand, and whether it should be anticipated that demand would increase further by Q4. In response, officers advise that the projections were based on very robust financial modelling that had been done, based on the staffing investments needed to meet the projected demand over the five year period. Assurances were given that the forecasting was as robust as it could be and that officers were as confident as they could be that the projections were accurate. In relation to EHCPs it was noted that the service had seen an increase in the number of requests for a plan rise by 100 over the previous year.
6. The Chair sought clarification around what impact austerity had on the service’s budget since 2010. In response, officers advised that it was around a 40% reduction overall but that they would provide a written response on the specific impact on the Children and Young People’s Service. (Action: Ann Graham).
7. The Chair sought further assurances around what the main budget pressures were in the service and how these would be managed going forward. In response, the Director advised that the report identified four key areas of demand pressures, including high placement costs which had already been discussed. The other three included the education psychology service, which was a pressure as it was previously funded through the DSG but due to a technical change it would now need to be funded through the General Fund. There was also a £475k staffing pressure around Education Health and Care Plans (EHCP) and additional cost pressures in school transport, including a 30-40% increase in demand for home to school transport. The Director advised that there was always a general pressure around capacity and sufficiency in the service but that was managed by the Director and her management team.
8. The Panel sought assurances about whether the Council was looking at a joined up approach for social care placements across London. In response, officers acknowledged that this was a difficult area and that the Council had undertaken the Hazelmere scheme itself. The Director advised that there would always be bumps along the way as working with 33 London boroughs had its challenges, as per the work that the 33 London boroughs were doing with the DfE to establish welfare residential provision. It was noted that there was also work being done with health colleagues to look at residential placements for children with mental health needs. The Director cautioned that the timescale for this was years.
9. In response to a question about the impact of possible additional funding announced in the Autumn Statement, the Cabinet Member advised that there was £3.2b announced going into the schools budget, including £1b for SEND provision. However, it was not yet known how this funding would be allocated or what Haringey’s share might be. In addition, the government announced £6b for school buildings. Cllr Brabazon clarified that the smoke signals from government was that there was some additional money for school revenue budgets, SEND and capital funding. There was also money for some breakfast clubs and additional childcare funding for nursery pilots. However, the childcare worked out to around £150k per authority. The AD Early Years, Prevention and SEND cautioned that Haringey was in the Safety Valve programme and that any additional funding would likely be used to offset its existing deficit within that programme. Further details of the figures and how they would be allocated were expected in late December.
10. The Chair invited the Panel members to ask questions on the new savings proposals at Appendix 1b. There was only one saving put forward in Children’s Services and that was additional income generation of £25k through Pendarren, which would make the site self-financing. Members asked whether the site was operating at full capacity and whether there was more that could be done to attract other external users of the facilities, particularly ensuring that there was self-catering facilities available. In response, the Director advised that there were looking to advertise the site externally, to groups that would be vetted before booking. This was being done along with looking at updating the booking site and the website.
11. The Panel commented that without self-catering facilities in the main house, certain sections of the community would not be able to use it due to their dietary requirements and the risk of cross-contamination. Officers agreed to come back with a written response about whether there were self-catering facilities available in the main house and/or whether there were separate kitchen facilities for Kosher dietary requirements in the main house. (Action: Jane Edwards).
12. The Panel sought assurances from the Cabinet Member for Finance around whether it was anticipated that further savings would need to be found from the Children’s service budget in order to close the existing budget gap. In response, the Cabinet Member advised that all directorate budgets were being looked at on a line-by-line basis, and that this included savings being delivered this year but agreed in previous years. Corporate Finance were also looked at reducing spend on things like; procurement, contracts, payment cards and agency staff. It was suggested that after years of increasing un-funded pressures that there was a limit to the savings that could be made. The Cabinet Member set out that Haringey was in a similar position to the other outer-London authorities and that they needed more support from central government to become financially sustainable.
13. The Panel considered the Capital programme as attached at appendix 1c. It was noted that there were no changes proposed to the capital budget in Children & Young People’s Services, under these draft budget proposals.
14. The Panel sought assurances around what would happen to youth services and other non-statutory services in light of ongoing budgetary pressures. In response, officers advised that the Corporate Delivery Plan set out what the priorities of the Council were and the purpose of setting a budget was to provide a financial framework to deliver those priorities, even if the financial picture was difficult. Assurances were given by the Cabinet Member that the administration  knew the impact of cutting youth services and that the Council needed to protect the core of its services, in order to be able to build them up again when there was money available. Officers set out that government announced additional funding for youth services in the Autumn Statement, but how this would be apportioned across local government was not yet clear.
15. In relation to the previously agreed savings tracker, it was noted that there were two savings that were amber. The first was a £99k saving from changes in staffing costs at Pendarren. It was noted that this was expected to be implemented in full, but that there may be a degree of re-profiling the saving. The second was a £119k saving in accommodation for local care leavers. The Director advised that work was continuing to find accommodation through the Housing Allocations process and that it was expected that the savings for this year would be delivered in part, if not in full.

The following requests for information and recommendations were agreed by the Panel:

1.    Clarification was requested about Pendarren and whether there was facility for outside groups to use the main house on a self-catering basis, particularly in relation to groups with specific dietary requirements.

2.    The Panel sought assurances from Cabinet around the modelling used to calculate the forecast pressures in Children’s. The Panel would like assurances that the forecasts will continue to be reassessed going forward, including in reference to updated in-year budget monitoring figures for Quarter 2 2024/25. Also, assurances were sought about whether the forecasts be affected by additional funding announced in the Autumn Statement.

3.    In reference to the residual budget gap of around £32m, the Panel requested assurances from Cabinet that they would seek to minimise the impact of further savings on children and young people in the borough.

4.    The Panel request that Cabinet provide a response on what their plans are for income generation, rather than savings, to close the overall residual budget gap. The Panel also seek assurances from Cabinet that they have explored every opportunity for income generation.

5.    The Panel requested that Cabinet give assurances around the fact that they will monitor the costs of children’s social  care placements closely going forwards(given the budget pressure in this area), and also give assurances around how the Council will ensure that none of our providers use unsuitable placements, such as caravans and Airbnb sublets. Further assurances were requested about how we will monitor providers charging excessive rates for high-cost placements. 

6.    Savings Tracker (£200k saving). The Panel requested further information about what mechanisms are being used to effectively manage the market? Are there lessons that could be rolled out more widely.

7.    The Panel request clarification about what the ‘Digital Savings’ saving relates to on the Savings Tracker. The Panel also request clarification about why there is no RAG rating. It is presumed this should be red, as it is listed as a £232k shortfall. If this saving is undeliverable, how will the £232k saving be mitigated?

RESOLVED

That the Panel scrutinised the proposals presented in the report

And its appendices and provide recommendations on the Budget proposals

to the Overview and Scrutiny Committee (OSC) Committee on 20 January

2025.