Agenda item

To consider the Budget report on the Council’s financial position at the end of Quarter 1 of 2025/26.

The report included with this item was first published as part of the agenda papers for the Cabinet meeting on 16^th September.

Members are required only to scrutinise the areas of the report related to the Panel’s remit, including Adult Social Care and Public Health.

In opening this item, Cllr Connor informed the Panel that the Quarter 1 Finance Update report provided had originally been part of the agenda papers for the meeting of the Cabinet on 16^th September 2025 and that the Panel was required only to consider the sections of the report that related to the areas within its remit, such as adult social care.

Jo Baty, Director of Adult Social Care, provided an overview of the report, informing the Panel that Adult Social Care had an overspend of £7.6m at the end of Quarter 1 of 2025/26. The report illustrated the higher demand for services between 2019 and 2025 with an increase of the number of older adults accessing services by 34% and younger adults by 30%. Over the same period, the weekly financial commitments had increased by 64% for older adults and 60% for younger adults. This reflected the pressures of the market and other factors such as difficulties with recruitment and retention of care staff. There was less choice within the market compared with 10 years previously and providers felt able to charge more, particularly for cases with more complex needs. The cost of residential placements for younger adults with learning difficulties was now around £1,800 per week which represented a 29% increase since 2020. A nursing placement for an older adult with a physical disability was now £1,315 per week, also an increase of 29% since 2020.

Jo Baty explained that the Council’s response to rising costs included working with neighbouring Boroughs and sub-regional partners, for example with market management, maximising joint funding with health and looking at best practice with early intervention and prevention. She added that the Integrated Care Board (ICB) had similar financial challenges and so the Council was proactively working with them on hospital discharge and admission avoidance. The Council was also working with care home providers to look at opportunities for collaboration and integrated workforce development.

With regards to savings, the full year target for Adult Social Care was just under £4m. There had been challenges in securing extra resources for commissioning staff which was needed because this was the engine room of Adult Social Care in working proactively with providers, implementing the care strategy and driving down costs.

Officers then responded to questions from the Panel:

• Referring to paragraph 6.18 of the report, Cllr Connor requested clarification about the Exceptional Financial Support (EFS) required by the Council. Sara Sutton, Corporate Director of Adults, Housing & Health, explained that, as at the end of Quarter 1, the Council was expecting to require the full £37m of EFS from the Government for 2025/26. The capital and the cost of the borrowing would have to be repaid over the longer-term. The rate of interest was clarified as 6.2%. Sara Sutton noted that this would create an additional budgetary pressure of an additional £2.91m that could otherwise have been used for other spending. She added that, overall, this represented a significant financial crisis which the Council was responding to with a range of measures including a financial recovery plan and significant spending controls.
• Referring to paragraph 2.4, Cllr Connor noted that the forecast cost of adult social care was expected to be £7.5m higher in 2025/26 than in 2024/25 with a rise in the number of support packages and asked about the forecasting for future years. Sara Sutton explained that the modelling generally involved three scenarios: the best case, the worst case and the most likely case. However, there would often be unexpected variations. She also noted that Haringey Council was not alone in this scenario with 80% of adult social care budgets across the country overspent according to the recent ADASS Spring Survey. The assumptions built into the modelling were being continually reviewed including on the anticipated cost of care, number of service users and number of complex cases. She added that the current overspend represented a 7.2% variance on the adult social care budget.
• Neil Sinclair, Head of Finance (People), commented further about the modelling, which had been used to set the budget for 2025/26 back in October 2024. Placement data had been used but some factors were still changing, including rising costs. Long-term trends were factored in but there were currently some unusual trends, including the increases in the number of older adults. This information was all fed into the budget model but there was a challenge in planning and building a forecast for the next financial year. Jo Baty added that it was also important to triangulate that information with qualitative data, including conversations with strategic partners such as Disability Action Haringey and the reference groups of the Joint Partnership Board in order to test assumptions about what service users were experiencing.
• Cllr Brennan noted that home care costs did not appear to have risen relative to other costs. Referring to the graphs in the report, Sara Sutton noted that some areas of home care showed a decrease, but that there were corresponding increases elsewhere such as Direct Payments and there was an increase in home care costs for older people with physical disabilities. There was therefore a mixed picture based on different cohorts within Adult Social Care.
• Asked by Cllr O’Donovan for further details on the achievement of planned savings for 2025/26, Jo Baty said that:

o   Staffing savings had been achieved already.

o   Connected Communities was also on track.

o   The development of the community support model had taken a little longer, but a project was due to report in the middle of November with some efficiencies expected. Many things were still done manually by email or phone which could be more effective digitally and there was also potential to signpost residents more effectively. Overall, the community support model was on track but there was a lot of work to do before the end of the financial year.

o   On reablement, the Council was receiving support from 31ten Consulting to modernise the service and reablement model for the future with the efficiencies on track in this area.

o   The indicator for supporting living was amber so this was behind at present, but the view was that the savings still needed to be delivered. The commissioning team had oversight of supporting living contracts and recruitment was underway to provide additional capacity.

Neil Sinclair said that:

o   On transitions, the targets had been set in the budget for 2024/25 over a 5-year period. A business case had been developed in July 2023 based on the number of children expected to transition to adult services over the next five years. That data had now been refreshed and more was now understood about costs. The savings target of £1.152m for 2025/26 had been based on a projected cost of £4.2m for that cohort of young people but the actual cost was now projected to be closer to £3.2m. The cost projections would continue to be refreshed to inform the savings potential for the next three to five years. Sara Sutton added that, in addition to the reduced costs from the modelling assumptions, there would still be other savings made in this area.

Sara Sutton said that:

o   Across Adult Social Care, opportunities had been identified for early delivery of savings. This included bringing residents currently receiving out-of-Borough day provision, back in Borough due to capital improvements and increased capacity.

o   For some savings, such as the community support model, it was always known that some lead-in time would be required and so savings would not start to be delivered until the last quarter of the financial year.

• Asked by Helena Kania on the likely impact on residents of the spending reductions, Jo Baty said that early commitments had been made to utilise the commissioning co-production groups to join efficiencies with areas of improvement. In addition, proposals that changed the shape of services would require an equalities impact assessment to review how any changes would impact the different communities in Haringey. Wherever possible, the Council was attempting to get more value from investment through collaboration. Helena Kania queried whether savings would be obtained through more explicit cuts, such as shortening the reablement package for example, and when information about this would be available. Jo Baty said that there were different models for reablement with an options appraisal being looked at currently. This would need to be worked through quickly with movement on how to progress expected in the next month or so. Cllr Connor suggested that, as these proposals were progressed, the Panel would expect to see clearer details on the anticipated impact of changes on residents. (ACTION) 
• Cllr Peacock asked about community support for older people, commenting that some residents were not content with the monthly subscription service for the fall alarm system. Jo Baty said that a review of Connected Care was expected to report in about a month on the modernisation of the service.
• Cllr Opoku referred to the graphs under paragraph 1.5 on page 53 of the agenda pack and noted that the data for some cohorts were not included, particularly for over-65s. Sara Sutton explained that only the graphs most relevant to the drivers of spend had been included but that further data could be included in future reports based on feedback. It was requested that Panel members could specify any data that they wished to see at the next finance update. (ACTION)
• Cllr Iyngkaran commented on the drivers for overspend and asked how the forecasting of the demand from the older age group was being captured. Neil Sinclair said that the trends varied and there had been a change activity because there had been a large increase in the last financial year in older adults with physical support needs coming through the system. This altered presumptions of the modelling. It was therefore necessary to keep looking at the data, although Office for National Statistics (ONS) data may not necessarily reflect health demographics in the Borough or the complexity of cases so there were a range of factors to account for when generating the projections. Sara Sutton acknowledged the risks in the budget of the Adults, Housing & Health Department due to the demand-driven nature of both Adult Social Care and Temporary Accommodation. The Department therefore worked closely with the Finance team on the forecast position and on incorporating the right amount of corporate contingency. There could also be unplanned events such as the recent issue of one of the Council’s community equipment providers going into liquidation which had caused capacity issues and additional costs to the Council. There were other unknown factors for local government including future funding from national government which would have fundamental significance for the Council’s budget.
• Cllr Iyngkaran queried whether the additional funding for Adult Social Care in recent years had translated to better care for residents. Sara Sutton responded that Adult Social Care was on an improvement journey but there were also demand pressures and inflationary pressures so the aim was to strike the right balance between quality, cost of care and outcomes for residents. The Council was trying to meet its statutory duties within its financial envelope but this was becoming increasingly difficult and better services could be delivered with increased funding. Improvement Plans would be brought to Cabinet and then to Scrutiny for detailed discussion. She reiterated that this was a national issue and that only 16% of Directors of Adult Social Care across the country were confident that they could achieve their savings target in-year.
• Cllr Connor observed that the Housing, Planning and Development Scrutiny Panel had recently considered aids and adaptations and had involved developing a list of suppliers who provided specialist equipment and worked well with vulnerable residents. On that basis, she asked whether the procurement savings would impact on the Council’s ability to use the best contractor available. Sara Sutton clarified that there were no direct savings associated with aids and adaptations because this was provided through a capital budget from the Disabled Facilities Grant (DFG). However, the aim was to spend the money in the best value-for-money way possible in order to maximise the work that could be carried out. She added that closer working between the Housing and Adult Social Care teams was one of the aims of the newly formed Directorate.
• Cllr Connor requested that information be provided on the progress of savings proposals that had been agreed in earlier years but were still in the process of being implemented. (ACTION)