County Council Revenue and Capital Budget Monitor 2007/08

HERTFORDSHIRE COUNTY COUNCIL
CABINET
MONDAY 17 MARCH 2008 AT 2.00 PM / Agenda Item No:
6

COUNTY COUNCIL REVENUE AND CAPITAL BUDGET MONITOR 2007/08

Report of the Finance, Information and Commercial Services Director

Author: Andrew Nightingale - Assistant Finance Director (01992 555331)

Executive Member: David Lloyd

1.Purpose of the Report

To inform Cabinet of the forecast outturn for Revenue and Capital Budgets in respect of 2007/08.

2.Summary

2.1The monitoring positionat the end of December 2007 shows a revenue overspend of £2,072m(0.36%) against the latest budget of £578.018m. As at the end of December the balance on the special provision is £8.628m and the balance on the pay and price contingency is £679,000. On the basis of monitoring information to date, a contribution of up to £7.2m is projected at year end.

2.2The principal reasons for the variation in the forecast revenue outturn are listed in Table 2 (Para 1.2), whilst a summary analysis across service is shown in Appendix A.

2.3Table 3 (Para 4.1) analyses by service the projected capital variation of £21.841m, Analysis by type of variance is shown in Table 4 (para 4.1), whilst a summary analysis across services is given in Appendix B.

2.4The change in Government Funding to Dedicated Schools Grant (DSG) has meant that any variances in CSF schools budget are ‘ring-fenced’ and can not be used elsewhere. This is explained further in section 3 of this report.

2.5The reported 2007/08 prudential indicators show that no limits have been breached nor are they expected to be in the remainder of the year.

Recomendation

3.1That Cabinet notes the forecast outturn for Revenue and Capital Budgets in respect of 2007/2008.

1.REVENUE BUDGET VARIANCES

1.1Table 1 below summarises the variances by service using the criteria previously laid down in Financial Regulations 2000.

Table 1: Budget Variances 2007/08

Overspends / Planned
Under-
Spends / Unplanned Under-spends / Net Variances
£000 / £000 / £000 / £000
CSF Education Non-Schools / 2,357 / (620) / (1,447) / 290
CSF Children’s Services / 6,792 / (1,342) / 5,450
CSF Cultural Services / 41 / (92) / (51)
Adult Care Services / 1,370 / (420) / (410) / 540
Environment / (1,210) / (1,210)
Fire & Rescue / 377 / (197) / 180
Trading Standards and Consumer Protection / (60) / (60)
Resources Portfolio (Corporate) / 973 / (40) / 933
Central Items / (4,000) / (4,000)
Funded from Balances / 0
Totals at 31/12/07 / 11,910 / (2,250) / (7,588) / 2,072

1.2The following table shows those variances of £75,000 or more against the latest budget. Detailed explanations for these variances are listed in sections 1.3 to 1.6.

Table 2

Service / Description / Para
Ref. / Forecast
Over/ (Under spend)
£000
CSF Education Non-Schools / SEN Home to School Transport / 1.3.1 / 1,000
Mainstream Home to School Transport / 1.3.2 / (420)
CSF Children’s Services / Review of Children with Disabilities Services / 1.3.3 / 257
Children with Disabilities / 1.3.4 / 148
Social Care Transport / 1.3.5 / 135
Section 17 Support / 1.3.6 / 83

Social Care Area Pay

/ 1.3.7 / 1,400
Independent Placements – Social Care / 1.3.8 / 2,160
Residential Homes / 1.3.9 / 91
Family Placement Teams / 1.3.10 / 243
Child Litigation Unit / 1.3.11 / 331
Standards and Schools Effectiveness Division / 1.3.12 / (150)
Unaccompanied Asylum Seekers / 1.3.13 / (200)
Residential Homes CWD / 1.3.14 / 376
Looked After Children / 1.3.15 / 162
Independent Review Team / 1.3.16 / 79
Adult Care Services / Home Care and Residential/Nursing Care for Older People / 1.4.1 / (420)
Physical Disability Residential and Nursing Care / 1.4.2 / 250
Meals on Wheels / 1.4.3 / 140
EPD Day Care / 1.4.4 / 200
EPD Staffing/Admin/Premises cost / 1.4.5 / (140)
Delayed Transfer of Care / 1.4.6 / (260)
Non Residential Charging Income / 1.4.7 / 310
Learning Disability Residential and Nursing Care / 1.4.8 / 100
In House Supported Living / 1.4.9 / 370
Environment / Waste Management / 1.5.1 / (1,000)
Fire & Rescue / Fire & Rescue / 1.6.1 / 180
Resources / Education Workshops / 1.7.1 / 882
Central Items / Capital Financing/Interest on Balances / 1.8.1 / (4,000)
Forecast Overspend >£75K Variances / 2,308

All Services

/ < £75k Variances / (236)

Total Forecast Overspend

/ 2,072

1.3CHILDREN, SCHOOLS & FAMILIES (CSF)

1.3.1SEN Home to School Transport - £1m or 8.0% overspend

There has been ongoing pressure against this budget which is caused by a number of factors. These include the reliance on the use of taxis, with increasing associated costs due to increasing wages, increasing charges linked to demand exceeding supply and the use of better quality vehicles as required by the regulatory authorities.

Actual spend in this area has been increasing at a higher rate than inflation over a number of years although our expenditure is not out of line with comparable authorities.

Work has continued on the development of options to reduce the expenditure in this area including; separating decisions about entitlement and how transport will be provided, annual reviews and stopping transport to students beyond age 21. These are unlikely to generate any efficiencies in the short term.

To contain expenditure in the current year, officers decided to bring forward the re-tendering of 185 contracts in the eastern half of the county, after 4 years rather than the normal 5, from September 2007; and parents were informed of this. The savings generated from this exercise through replanning and rationalisation of routes has resulted in a reduction in the predicted overspend of £239,000 since the first quarter of the financial year.

1.3.2Mainstream Home to School Transport - £420,000 or 4.2% planned underspend

Savings achieved from re-tendering e-route contracts and revisions and/or cancellation of other routes, particularly to Round Diamond, Hillmead, New Briars, Bushey Hall and Stansted Mount Fitchet schools has resulted in fewer contracts, and a reduction in this years cost of £186,000. This is off-set to some extent by the cost of new routes to Howe Dell this year, which results in a net saving of £120,000. The balance of the underspend relates to contingency held for the costs of changes to contracts, of approximately £300,000, in the mainstream budget.

1.3.3Review of Children with Disabilities Respite Services - £257,000 or 14.9% overspend

The saving agreed in the budget proposals for 2007/08 identified potential efficiencies within respite services for disabled children. There were two elements to the proposed efficiency; reductions in the cost of in-house provision and savings from re-commissioning elements of the service.

In the context of the increasing demand and pressure on services for Children with Disabilities a major review of respite services is continuing. This is likely to impact on the scope of commissioned services and it has therefore, not been possible to secure efficiencies from re-commissioning at this time.

1.3.4Children with Disabilities - £146,000 or 5.0% overspend

The increasing demand for services for Children with Disabilities has continued. Over the last financial year there was a significant increase in the number of recipients of packages of care

The challenge of providing services to disabled children and their families is greater than ever. The national and local picture is of an increase in both need and demand for services, coupled with higher expectations to provide greater choice, flexibility and coordination in how services are offered.

Nationally, the increase in need has been related to better pre-natal and paediatric care and a rise in the diagnosis of autistic spectrum disorders and related conditions.

Continued delivery of improved management processes has ensured that:

• assessments are consistently applied across the county
• packages of care have been appropriately agreed
• all existing packages are now reviewed every six months.

A number of medium term strategies continue, which will:

• develop a new pattern of services at no additional cost to ensure a better match of provision to need
• implement a new commissioning strategy which will offer opportunities for greater efficiency
• work with children’s centres and extended schools to ensure that disabled children have access to universal services
• re-align budgets to ensure information about the full cost of services is known to managers making decisions about packages of care
• work to ensure prompt handover of responsibility to ACS at transition.

Numbers of new clients agreed since April for both Direct Payments (7 clients) and Homecare (4 clients) are slightly above the numbers provided for in the budget. However, the growth in the number of clients has been contained without increasing the pressure on the budget. The reported overspend is largely due one case (£140,000) for a young man who needs 24 hour 2:1 care following an injury. Given the strict interpretation of the continuing care criteria by health, the authority has had to increase its contribution. This is to avoid the potential of an extremely costly judicial review in the event of withdrawal of support.

A new complex care panel has been established to provide joined up solutions for LDD cases across CSF and health and to deal with changes in any funding contribution.

In October, £1.245m was vired from savings elsewhere in CSF to cover the then anticipated overspend on this budget.

The pressure on this budget is reflected in the CSF budget proposals for 2008/09 to 2010/11.

1.3.5Social Care Transport - £135,000 or 10.6% overspend

The overspend relates to increased costs for home to school transport for a greater number of looked after children in the West of the County. In order to maintain stability for Looked After Children, when their placement is changed the original school place is maintained. This can lead to additional expenditure being incurred for transporting these children to school. This has been exacerbated given:

• A number of children are in contested court proceedings (minimum 9 months) and it is not possible to move school or placement
• The delay in moving children of 16+ on to Independent Support and the continuing impact on this budget.

All transport packages have been and are continuing to be reviewed to determine whether there are alternative transport options which could reduce the overall pressure. This has led to a reduction of £30,000 in the overspend this month. This work will be linked to a broader review of the commissioning options for local transport based on a detailed needs analysis.

1.3.6Section 17 Support - £83,000 or 8.7% overspend

This budget supports Children in Need and is designed to support a number of children and families with reasonably low levels of average support.

There is pressure on this budget from increased demand for support for families and children who have no recourse to other public funds and who need temporary support before returning to their country of origin (£30,000). In addition there are a two very high cost cases that require on-going support, the costs of which are shared with ACS.

1.3.7Social Care Area Pay - £1.4m or 7.9% overspend

Qualified social work vacancies have not reduced at the expected rate and as a result the degree of overspend forecast has increased by £500,000 bringing the projected overspend for the fieldwork staffing budget to £1.4m.

All posts covered by agency staff have been reviewed in order to identify where savings can be achieved. All other areas of the budget have also been reviewed. The current level of predicted overspend includes savings identified and, where possible, the conversion of agency posts to permanent appointments.

The service is under pressure to demonstrate to the DCSF sustainable improvement in performance in the coming months and has to date made marked improvement. However,it continues to be a challenge to maintainallocation of the most vulnerable children who are on the child protection register and who are looked after by the authority and young people who are care leavers. This is due to turnover within the social work teams, and the need to ensure that these most vulnerable children and young people are allocated to staff with a sufficient level of skill and experience

The implementation phase of the new Integrated Children’s System (ICS) and the related electronic recording system, which in the long term will improve performance, pose a significant threat in the short term in maintaining improvement. In this context it is not possible to release agency staff leaving social work posts uncovered, as this would reduce capacity to a critical level. This would create a situation where a safe service to children could not be provided. Additional risks associated with leaving social work posts vacant include a rising number of children whose needs escalate to the point where they need to be looked after, leading to additional associated expenditure.

The external support team will review the capacity of the social work teams as part of their work in reviewing the prospects for sustainable service improvement. They will report the outcomes of this review in February to the JAR Post Implementation Project Plan Board and this will form part of the regular update to members.

1.3.8Independent Placements – Social Care - £2.16m or 21.9% overspend

The pressure on this budget is well documented. It is difficult to predict the number and cost of placements as children will be subject to care episodes and may come in and out of care. The unit costs of social care placements are not out of line with statistical neighbours although the need to reduce the overall number of looked after children is recognised. A relatively small proportion of the overall LAC population are in Independent Placements (13% as at 31 March 2007).

The current forecast is an estimated overspend of £2.16m, which is net of the virement of £1.094m agreed by cabinet in September.

Outcomes UKhave reviewed all Looked After Children Placements with a view to reducing them and have identified 29 potential cases which may be able to return to in-county provision. This linked to the development of more local specialised placements should improve the range of placement choice. This in addition to the prevention of accommodation initiatives will ultimately reduce the pressure on this budget.

1.3.9Residential Homes - £91,000 or 1.7% overspend

The requirement to introduce the European Working Time Directive in residential homes is estimated to cost an additional £116,000 in 2007/08. Whilst it was anticipated that this cost could be accommodated through a review of shift patterns within the homes, this has not been possible because of the requirements around night work limits.

This reported overspend has been off-set this month by an increase in staff vacancies.

1.3.10Family Placement Teams – £243,000 or 7.3% overspend

This area is responsible for the recruitment and support of Foster Carers and support for the Adoption process for Hertfordshire. These teams play a critical role in developing and expanding our own provision for looked after children and in increasing the numbers of children adopted.

Staff within family placement and adoption teams are experienced Social Workers and there has been little staff turnover in this area this year. Both of these issues have led to this predicted overspend. These services have now been reviewed and a plan agreed to ensure that overspends do not continue in subsequent years.

1.3.11Child Litigation Unit - £331,000 or 17.2% overspend

This budget funds both the Service Level Agreement (SLA) for the Child Litigation Unit and costs associated with external specialist legal fees. The overspend reflects the current level of usage against the SLA which is estimated to be in excess of 1,000 hours greater than the agreement. This reflects the high number of cases overall. In addition the overspend predicted for specialist legal fees is due to an increase fin the number of complex High Court cases requiring expensive counsel.

A thorough review of this area has resulted in a number of process and monitoring improvements being put in place which include, improved management information and strengthened budget management arrangements.

1.3.12Standards and Schools Effectiveness Division – £150,000 or 3.3% planned underspend

A thorough review of expenditure within this budget has identified a number of elements that can be off-set against relevant grant funding resulting in anunderspend in this area.

1.3.13Unaccompanied Asylum Seekers – £200,000 or 53.0%planned underspend

Arrears of claims for Home Office grants for the period 2002-2007 in respect of asylum seekers were settled during the current financial year at a higher figure than expected. In addition, Hertfordshire was successful in securing additional Home Office contingency grant in year as a contribution to the costs of supporting its work with Asylum Seeker children.

1.3.14Residential Homes Children With Disabilities (CWD) – £376,000 or 21.3% overspend

The overspend in this area relates to a number of issues in the staffing budgets including;

• additional staffing required to support the placement of a child with exceptionally complex needs in one unit at an additional annual cost of £120,000, This child has now moved to a joint specialist independent placement which provides better value for money and facilitates contact with the child’s birth family.
• additional costs associated with agency cover for long term sickness and other staff shortages and
• the introduction of the Working Time Directive

Action has been taken to reduce the impact on agency costs through more flexible use of staffing across the homes. In addition a county-wide review of residential short break provision is being undertaken to ensure services are developed and delivered in line with best value principles.

1.3.15Looked After Children - £162,000 or 13.3% overspend

An increase in the number of supervised contact sessions, ordered by the courts, has resulted in this overspend. The contact sessions are carried out by agency staff as a high number of the sessions need to occur after school and at weekends which Professional Assistant staff from the Area Teams cannot cover.

Management action is being taken to mitigate the effects of this by increasing the use of a new in house contact service with immediate effect to reduce the need to commission sessional staff through Manpower.

1.3.16Independent Review Team - £79,000 or 8.9% overspend

This team provides statutory independent reviews of all Looked After Children. There is pressure on the work of this team to enable it to meet statutory demands. Various issues are putting pressure on this budget including relatively low levels of staff turnover, increases in the number of staff at the top of their grade and cover required for maternity leave. Work is ongoing to assess the management actions which can be taken to mitigate the effects of these pressures. However, the scope for this action is limited as any savings generated are likely to impact on the team’s ability to meet statutory timescales for reviews.

1.3.17JAR Post Implementations Action Plan - £372,000 Approved application of Special Provision

At its meeting of 7th November 2007 cabinet agreed additional investment of £372,000 in the current financial year to accelerate improvements in performance in a number of key performance areas for safeguarding and looked after children. In particular the funding would be used to support;

• developing the Independent Support Service (for Leaving Care) to enable the transfer of 100 cases of looked after young people from the LAC Teams to an enhanced ISS service and bring improvements the ratio of LAC to QSW (£110,000),
• additional support for assessments to improve the timeliness of intial and core assessments and to mitigate the initial impact of the implementation of ICS (£60,000),
• increased support for the independent review team to provide capacity for co-ordinating and monitoring the timeliness of all LAC reviews (£7,000),
• earlier development of a kinship care team to promote support and increase the number of kinship care placements available and reduce the reliance on independent placements (£70,000)
• as part of the workforce development for foster carers providing increases in fostering allowances to assist with recruitment and retention to strengthen our internal provision and reduce reliance on independent provider placements (£80,000)
• funding for Local Authority Designated Officer (LADO) to support the management of allegations against staff which is an essential complement of safe recruitment and vetting agenda (£15,000)
• increased support for the work to get care orders discharged for children and young people placed at home and therefore reduce overall numbers of LAC (£30,000)

1.4ADULT CARE SERVICES (ACS)