BOROUGH OF POOLE
HEALTH AND SOCIAL CARE
OVERVIEW & SCRUTINY COMMITTEE
22 November2011
MEDIUM TERM FINANCIAL PLAN 2012/13 TO 2014/15
PART OF THE PUBLISHED FORWARD PLAN – YES
STATUS – STRATEGIC POLICY
1Purpose
1.1The purpose of this report is to:
a)advise members of the updated MTFP position following the conclusion of the first round of budget consultation discussions undertaken by all Overview & Scrutiny Committees to date;
b)advise members of the outcomes of the further work undertaken since the last meeting of this committee to develop further savings and efficiencies proposals and seek members views on those matters before final budget proposals are taken forward;
c)ask members to consider whether there any further ideas or options for further examination at this stage in the budget process that they would like to suggest for consideration.
2Decisions required
2.1It is recommended that Overview and Scrutiny members:
a)note the contents of this report and the updated summary MTFP position for the Council overall as at 11/11/11 as set out in Exhibit 1 following the conclusion of the first round of the budget consultation discussions undertaken by each Overview & Scrutiny Committee this autumn;
b)note the updated MTFP position for this Committee as set out in paragraph 5.1 which incorporates the growth and savings proposals brought forward for discussion at the last meeting of this Committee as scheduled in Appendices A and B.
c)note the work undertaken since the last meeting of this Committee and comment on the further savings and efficiencies proposals arising from that work as set out in Section 8.
d)identify any other ideas or options that members may wish to suggest for further consideration at this time.
.
3Background
3.1The Medium Term Financial Plan (MTFP) is a 3-year plan that is reviewed, updated and rolled forward on an annual basis to deliver the Council’s priorities. The Council’s budgeted net expenditure in 2011/12 is approximately £102m. Council expenditure is funded primarily through local Council tax and government grants. The balance of funding is derived variously from fees, charges, rents and other sources of miscellaneous income.
3.2The MTFP is fundamental to the Council’s Policy and Service Planning cycle. The plan seeks to align resources to priorities in setting out the overall financial direction of the Council over the coming three years and sits alongside the Council’s Corporate Strategy ‘Striving for Excellence’that sets out the Council’s aims and objectives. The strategy is now under review following local elections in May 2011. Clearly, in doing so, Members and the Council’s Management Team need to consider the local impact of the downturn in the economy, known reductions in public spending and changes in national policy. In light of that, the MTFP process this year must reflect short term budget requirements for 2012/13 and the likely scope and delivery of service activities in future years.
4Overall Financial Strategy
4.1The Council’s financial strategy over the last three years has served the organisation well in extremely turbulent times. Whilst this has allowed the Council to recover a sense of financial equilibrium, things remain far from settled. Further significant cuts in Government funding are programmed over the next three years and the series of major changes in public policy now underway will have significant implications for the Council.
4.2Poole has a good record for providing value for money (VFM) services and for meeting its efficiency savings targets. In the past, the principle focus of VFM and efficiency work has largely rested with individual service units. In the past 18 months, however the Council has been on a different ‘change journey’ requiring the organisation to think differently about the way in which it does business and how it is organised in the future if it is to respond effectively to significant reductions in funding, radical changes in national policy and a range of local cost and service demand pressures. Increasing emphasis has been given to VFM and efficiency review work being driven corporately rather than by Service Units to achieve substantial savings and help mitigate the impact of funding cuts in priority service areas.
4.3The change journey began in earnest after the 2010 General Election with a range of immediate budget reductions. These were made in anticipation of the changing national policy agenda with the understanding that more fundamental change would be taken forward after the local elections and when the national policy and funding positions became clearer.
4.4The re-fresh of the MTFP this year has been on-going this year in the wider context of that change and work to achieve a balanced Budget for the 2012/13 is well in hand. Whilst there is still a requirement for Service Units to deliver savings, more emphasis has been given to driving out further savings and efficiencies through the corporate Efficiency Review Programme. At the same time work on the longer term change options is progressing and will be presented to Members in Spring 2012. This work will include, amongst other things:
- the overall structure of the organisation;
- the appropriateness of different delivery options.
4.5As this work progresses over the next few weeks and months it should be possible to estimate with greater certainty whether it will be possible to realise any of the longer term savings this work envisages during 2012/13 in helping to achieve a balanced budget position next year.
4.6This year’s MTFP and Budget process will support the short and medium term planning needs of the organisation by:
a)identifying the operational resources needed to sustainservices next year in a time of transition;
b)ensuring transparency, promoting accountability and helping to manage the performance of the organisation;
c)ensuring in-year activity facilitates the Council’s longer term ambitions as understood within the overall context of the wider MTFP;
d)recognising that other parts of the public sector face similar funding problems and the cumulative impacts of that across the community.
4.7Work to the end of September indicated that the Council is faced with known resourcing pressures of £17.8m over the next three years, of which £5.4m relates to 2012/13 as set out below. Exhibit 1 also demonstrates that if each of the Overview and Scrutiny Committee’s accept the savings and efficiency proposals put forward the Council will still face a forecast savings gap of £1.1m.
4.8Members are reminded that major changes in Government policy are likely to introduce further resourcing pressures that are not included in the current MTFP position from the 1 April 2013 because the financial consequences of these changes for the Council cannot be easily quantified at this time. However it seems possible that these ‘known unknowns’ may add millions of pounds of additional cost pressure to the bottom line over the next few years.
Exhibit 1
Summary position statement as at 1 November 2011
2012/13 / 2013/14 / 2014/15£000's / £000's / £000's
Base budget brought forward / 102,055 / 101,161 / 100,524
Summary of additional resource pressures1 / 6,747 / 7,254 / 5,732
Initial assessment of required resources / 108,802 / 108,415 / 106,256
Annual Growth Requirement / 7,854 / 7,238 / 7,092
Annual Percentage Increase / 8.6% / 7.3% / 6.7%
Cumulative Growth Requirement / 22,184
Cumulative Percentage Increase / 24.4%
Base budget brought forward / 102,055 / 101,161 / 100,524
Reduced funding from grants & taxation2 / (894) / (637) / 22
Forecast funded budget / 101,161 / 100,524 / 100,548
Known gross resourcing pressure / 7,641 / 7,891 / 5,710
Previously scheduled ERP savings / (2,289) / (1,155) / 0
Known net resourcing pressure / 5,352 / 6,736 / 5,710
Outcome of Budget Overview & Scrutiny Committees
(A) Proposals previously included in the MTFP / (1,178) / (770) / (132)
(B) New proposals approved by the Portfolio Holder / (2,451) / (129) / (28)
Adjustments to previous resource pressures etc / (68) / 184 / (204)
Known net resourcing pressure – Sub Total / 1,655 / 6,021 / 5,346
Cumulative pressure – Sub Total / 1,655 / 7,676 / 13,022
(C) Outcome of work in hand proposals / (548) / 0 / 0
Known net resourcing pressure / 1,107 / 6,021 / 5,346
Cumulative pressure @ 1 November 2011 / 1,107 / 7,128 / 12,474
1 This assumes a nil pay award in 2012/13 increasing to 2.5% in 2013/14 and 2014/15 based on the advice of the Council’s Head of HR
2 This includes the assumptions that the provisional grant settlement announced last year for future years will remain unchanged and that Council Tax will increase by 2.5% per annum over the life of the current MTFP.
4.9The financial circumstances of the Council therefore remain very challenging. Setting a balanced Budget will involve Members in making further hard decisions in the next few months. It is critical therefore that Portfolio Holders and Members of the Council’s Overview & Scrutiny Committee work together with officers to bring forward robust and realistic Budget proposals. In doing so Members will be concerned to ensure that the proper and lawful duties of the Council are satisfied and that a balanced Budget is achieved.
5Strategic context for the Health and Social Care Overview and Scrutiny Committee
5.1The net impact on the Council Medium Term Financial Plan (MTFP) of Adult Social Care Services is set out in the summary below;
2012/13£’000 / 2013/14
£’000 / 2014/15
£’000
Growth Pressures– Previously reported to 26th Sept Health and Social Care O&S(Appendix A) / 3,201 / 3,375 / 3,447
Growth Pressures – Additional emerging pressures since those reported to 26th Sept Health and Social Care O&S / 250 / 0 / 0
Savings & Efficiency proposals put forward with the Portfolio Holders approval – Previously reported to 26th Sept Health and Social Care O&S (Appendix B) / (949) / (19) / (13)
Savings & Efficiencies identified as part of the further “work in hand” process / (390) / 0 / 0
Sub Total Net Impact of the Council’s MTFP / 2,112 / 3,356 / 3,434
Other changes
Risk mitigation for “Ordinary Residence” issues as outlined at 6.3 / 1,100 / 0 / 0Total Net Impact of the Council’s MTFP / 3,212 / 3,356 / 3,434
These categories are further explored in the detailed sections 6 to 8 below;
6Growth Proposals
6.1Growth Pressures, previously reported to the 26th September Health and Social Care Overview Scrutiny Committee are shown at Appendix A of this report.
6.2Additional emerging growth pressures have arisen since the 26th September Health and Social Care O&S Committee
Additional Emerging Pressures / 2012/13£’000 / 2013/14
£’000 / 2014/15
£’000
Reduction in client contributions as a consequence of declining financial wealth / 200
Supported Living Service – additional requirement identified as a result of assessment of each person’s needs. / 50
Total Growth Pressure Adult Social Care / 3,451 / 3,375 / 3,447
6.3In addition, to the above it is proposed that the Council provides, for an Ordinary Residence pressure, previously referenced as a “known unknown”, which looks very likely to fall as a pressure to the Council. This pressure relates to service users wholive within the Borough and are currently funded by other Local Authorities. Changes in how Local Authorities and the Secretary of State apply rules in relation to ”Ordinary Residence” mean, that following a formal process of review of the circumstances of each individual circumstance, there is a strong likelihood of the Borough of Poole being required to take on financial responsibility for some or all of the individuals concerned.
It is currently estimated that the cost associated with this pressure will be in the region of £1.1m. Previously the Council has recognised this pressure as part of its base budget revenue contingency. Therefore the proposal is to remove the impact on the Council’s MTFP by a transfer from these contingent resources to a specific Adult Social Care earmarked budget. This budget will only be applied to cases where the Borough of Poole is required to take on financial responsibility as a result of a formal determination of Ordinary Residence responsibility for an individual person.
7.Saving & efficiency proposals put forward for the 2012/13 refresh of the MTFP with the approval of the Portfolio Holder
7.1Saving and efficiency proposals put forward for the 2012/13 refresh of the MTFP with the approval of the Portfolio Holder, previously reported to 26th September Health and Social Care Overview & Scrutiny Committee (and now including Adult Social Care share of corporately agree Efficiency Review Programme activity) are shown at Appendix B of this report.
7.2It should be noted that the efficiencies in in-house domiciliary care a saving proposal of £200,000 (included within the Appendix B schedule), is subject of a specific and detailed paper on the Committee’s agenda as Item 5.
8Further Work in Hand
8.1Costed Summary
Savings/efficiencies / 2012/13£’000 / 2013/14
£’000 / 2014/15
£’000
i. Resolving greater number of enquiries at point of first contact saving practitioner posts / (50)
ii. Reviewing with Culture & Community Learning joint funding arrangements / (10)
iii. Savings in Procurement of Nursing Home Beds / (20)
iv. Further review of Day Services and Day Services Catering / (60)
v. Further efficiency reviews of some support and day opportunity contracts – Handyvan & Mental Health day opportunities / (60)
vi. Further transport efficiencies (part of corporate ERP) / 0
vii. Blue Badges change in administration arrangements and charging subject to national legislation / 0
viii. Further In-House Homecare efficiencies / (8)
ix. Fairer Contributions – Double up subsidy removed for those that can afford to pay according to financial assessment / (182)
x. Fairer Contributions – Full charge payers care management fee subsidy removed for those that can afford to pay according to financial assessment / 0
Total value – Work in hand / (390)
8.2Update
- Resolving greater number of enquiries at point of first contact saving practitioner posts
It is proposed that resources are transferred from fieldwork teams to the Helpdesk in order to resolve simple enquiries more quickly and cost effectively at the point of first contact with service users and carers. This measure will result in a net saving of £50,000 in staffing costs.
- Reviewing with Culture & Community Learning joint funding arrangements.
Adult Social Care provide resources to the Culture and Community Learning Service Unit in order to facilitate a wide range of arts activities for people who use adult social care services and for people who have moderate levels of needs. The Head of Adult Social Care (Services) has reviewed this provision with the Head of Culture and Community Services and had concluded that no reduction should be made in this area because of the benefit to people and the value for money that this investment represents in terms of attracting additional funding for opportunities for local people. Adult Social Care also funds a postin the Skills and Learning Service through which a range of adult learning courses are facilitated for people with a learning disability. Enabling access to learning for people with a learning disability is a priority within the draft Learning Disability Commissioning Strategy. Therefore there is no proposal to remove the specialist post. However, efficiencies generated from the merger of the management team in adult learning with Bournemouth Borough Council will result in a £10,000 (50%) reduction in the cost to adult social care.
- Savings in Procurement of Nursing Home Beds
Savings of £20,000 are identified by introducing changes to the way contract prices for nursing homes are negotiated.
- Further review of Day and Day Services Catering
Reduction in unit costs for the provision of meals in day services as a result of more efficient preparation processes will, when taken with further staffing efficiencies in Day Centres, result in a saving of £60,000.
- Further efficiency reviews of some support and day opportunity contracts – Handyvan & Mental Health day opportunities
Negotiations with the relevant providers will lead to a remodelled and more cost effective service, resulting in a saving of £60,000.
- Further transport efficiencies (part of corporate ERP)
It is planned to further streamline transport routes and modernising the transport fleet to reduce repair and maintenance costs. Work is on-going to identify if any further savings can be realised in 2012/13.
- Blue Badges change in administration arrangements and charging subject to national legislation
This is a subject of a specific and detailed paper on the Committee’s agenda as Item6.The most up to date estimates are that savings in the region of £10,000 may be achieved and these will be incorporated into the MTFP when confirmed.
- Further In-House Homecare efficiencies
The new extra care scheme at Delphis Court was temporarily staffed by Borough of Poole in-house services in order to achieve a swift opening. Work is now in hand to re-provide this care from an external provider within the Council’s existing domiciliary care framework (which was not operational at the time Delphis Court opened) achieving a saving of £8,000.
- Fairer Contributions – Double up subsidy removed for those that can afford to pay according to financial assessment
The Heads of Adult Social Care are going to begin consultation on a change to the existing practice in relation to the way in which people, who require two care assistants to meet their personal care needs,contribute to the costs of their care. At present, the Council only charges as if one person was providing care. This practice is at variance with the principles of the Council’s Fairer Contributions policy, which is based on the principle of people contributing to the full costs of their care. Both Dorset County Council and Bournemouth County Council charge for two people providing care in similar circumstances. The exact increase in income will depend on the number of service users in receipt of two carers at any one time. Projections based on the profile of people receiving home care in November 2011 show that the additional income from this policy change would be in the order of £182,000. The decision to consult on this change practice and to implement any consequent changes lies with Heads of Service as the current Council policy establishes the principle that people will contribute to the full cost of their services. As in all circumstances, people will only be asked to contribute if they have the means to do so following a comprehensive process of financial assessment.
- Fairer Contributions – Full charge payers care management fee for those that can afford to pay according to financial assessment
The proposal under consideration was that people (who are full charge payers and receive services within the community) could be asked to pay a contribution to cover the costs of Adult Social Care care management, billing, brokerage etc. To date, the Council has not been able to identify another Council which requests such a contribution. While it is an entrepreneurial proposal which might be valuable to further explore for future years, it is not proposed that this option is pursued for 2012/13 due to the high risk of legal challenge in advance of detailed consultation and impact analysis work. Officers will progress further work on the policy implications related to this proposal and consider if proposals should be presented in the next Medium Term Financial Plan.