BRIEFING PAPER: SUSTAINABILITY
RESOURCES & PERFORMANCE (Corporate Services)
How have the impact of current year (2010/11) activity levels and budget variances (pressures) been reflected in proposals for 2011/12 and beyond?
- Revised targets for capital receipts have been agreed although these continue to be challenging, reflecting continuing uncertainties in the property market. Figures for 2011/12 therefore reflect the likely delays to the realisation of receipts in the current year.
- Review of the capital programme in July 2010 and further slimming down has resulted in a 50% reduction in minor capital works. Together with increases in capital grant this reduces the requirement to borrow and releases capital financing costs of £5.106 million.
- The proposals include £627k which represents the service share of the Carbon Reduction Commitment (Energy Efficiency Scheme).
- Review of the insurance fund taking into account ongoing risks on the basis of the current claims history has been included as a £400k pressure.
Is the budget sustainable in the medium-term?
- The outlook for the future remains exceptionally challenging. The proposed budget however seeks to provide a sustainable footing for future activity. The sustainability of the budget however relies on the robustness of the estimates and delivery of the transformation programme of savings.
- The Council’s process for producing budget estimates involves senior managers and finance professionals in evaluating and costing all known changes, including pay and price levels, legislative changes, demands for services and policy developments, efficiency savings and service changes. The process includes consideration of risks and uncertainties associated with projections of future pay, prices, interest rates, and projected levels and timing of income and potential liabilities.
- The transformation programme delivered £31 million of savings in 2010/11 from a standing start. A further £53 million has been identified for 2011/12. Whilst savings targets have been increased following CSR they have also been extended for a further year to 31 March 2015. Whilst there is much still to do the council is in a strong position to deliver and continues to seek ways to accelerate and widen the scope of potential savings from processes and staffing and minimise the impact on services.
What is the reliance on one-off funding/reserves/government grants etc?
- There are a limited amount of budget proposals or grant funded areas relying on one-off/time limited funding including identifying a small amount of one-off funding from reserves in 2011/12 of £0.467 million.
- The former Area Based Grant (ABG) is now included within the formula funding arrangements. Furthermore the number of specific grants has been reduced with the removal of all ring-fencing arrangements for 2011/12.
How do proposals contribute to CO2 reduction / increased recycling?
- Matched capital was allocated in the 2010/11 programme to joint funding by Salix Ltd for carbon reduction works on all council property (schools and non-schools). Major programme of works is now underway with initial payback into the fund and potential for real savings in further years of programme.
- Digital energy monitoring systems have been applied to our office sites by Optimal to enable information collection on consumption and CO2 and enable benchmarking across council sites. Herts Property are now working to act on the data and realise energy bill savings through works and behavioural change to deliver the 10% saving committed in 2010/11.
- A further contract has been signed with British Gas to install automated monitoring at all remaining sites including schools by April 2011. New energy adviser posts have been established to assist schools and others with realising energy bill savings and deliver carbon reduction in line with commitments in the Carbon Reduction Plan.
- The TW3 Scrutiny Topic Group 2010 recommended a continuing commitment to the principles of TW3. In this respect the Council is continuing to invest in and promote technology that supports flexible working of staff, including telephone conferencing and e-fax technology. A further project is underway to look at how we can optimise the use of office space and build on TW3 including the potential for further consolidation onto the main sites or release space for leasing to third parties.
COMMUNITY PROTECTION (Fire & Rescue, and Trading Standards)
How have the impact of current year (2010/11) activity levels and budget variances (pressures) been reflected in proposals for 2011/12 and beyond?
Is the budget sustainable in the medium-term? What is the reliance on one-off funding/reserves/government grants etc?
How do proposals contribute to CO2 reduction / increased recycling?
Fire & Rescue
HFRS has put forward a standstill budget for 2011/12, and seeks to make a significant contribution to the HCC budget gap (as part of the Transformation agenda) in 2011/12 and beyond. The budget is sustainable in the medium term (three years) although there are some pressing concerns in relation to capital monies available to the Service.
Although the Government announcement to abolish Regional Control Centres is welcomed by HFRS, there are financial pressures in relation to the maintenance of Command and Control ICT infrastructure including the investment required to maximise mobile data technology. Property also remains a concern in that much needed investment in the FRS building stock goes far beyond the Property Departments budget. HFRS is struggling to maintain its buildings within the medium term but this will become a pressing issue for specific fire stations around 2012/13. HFRS also needs to improve its water rescue preparedness and capability in line with improvements suggested by regulators and inspectors.
HFRS has a successful Commercial Training Unit that helps to support the HFRS budget by selling courses to businesses, Local Authorities and other Fire and Rescue Services. Income in 2009/10 fell short of target and this remains an ongoing concern as the public sector, one of the Units major customers, reduces spending in this area.
Creating a sustainable environment is a key HFRS objective. There is a strong focus on identifying ways to improve energy efficiency to reduce CO2 emissions particularly around the operational use of water, gas and electricity. Newly built stations (Watford and St Albans) have a number of energy saving facilities including grey water recycling, but older buildings (such as the Longfield Training Centre) will remain hugely inefficient without appropriate investment or relocation.
Community Safety Unit
The CSU saved £198k on its 2009/10 budget by integrating the Crime & Drugs Strategy Unit with the Police Citizen Focus Team. In June 2010/11 the Unit also suffered an unexpected in year grant reduction of £105k from the Home Office. The budget for 2011/12 requires savings of £236k on 2009/10 allocation levels in addition to the in year reduction.
The Unit relies on a number of external grants. The Area Based Grant and the Drugs Intervention Programme Grant fund service delivery and posts in the Unit. The Unit has planned for around 10% reductions in these grants for 2011/12. Any further reductions would affect delivery and staffing.
Trading Standards
Budget proposals are sustainable in the medium-term. The Service works regionally in securing government grants, but does not rely on these to deliver and fund key services in general. Work around tobacco control and underage sales are however predominantly externally funded at present, and this funding will cease in 2011/12. This will necessitate a re-prioritization and reduction in activity in these areas in 2011/12, unless government grants are continued (which is unknown at this time). External funding for the regional Scambusters (regional crime - level 2 and national crime - level 3) investigation team is likely to continue but has yet to be confirmed. Similarly the external government funding for the illegal money lending team that undertakes loan shark investigations, is also likely to continue but has yet to be confirmed.
Since the national Foot and Mouth outbreak in 2002, DEFRA (Department for Food & Rural Affairs) has provided ~£30k of funding for additional animal health work required to be carried out by the Service. The monies available for this have been de-ring fenced, and announcements recently made in the CSR indicate that the funding coming to Hertfordshire in respect of this work by way of the settlement grant will be significantly less than £30k. The anticipated figures are £15k for 2011/12, £12k for 2012/13, £10k for 2013/14 and £7k for 2014/15. If this is the case, and without budget growth, there will be a reduction in the animal health work of the Service.
The TS Service Plan includes work around reducing packaging (contributes to CO2 reductions - more efficient manufacturing, less distribution and petrol costs) and Energy Performance Certificates (EPCs).
Emergency Planning
Budget proposals reflect a standstill budget and are sustainable in the medium term. Members approved a four year funding programme for flood risk (including community resilience work) and preparation for the Olympics. Other pressures and demands on the service will be met within existing budgets. Nevertheless, the review of the Civil Contingencies Act 2004 which is currently underway, is expected to “raise the bar” for Category 1 responders like the county council. This will undoubtedly place additional demands on the unit and is expected to require both the Authority and the Local Resilience Forum to be able to meet a number of “harder tests”.
The Resilience Team currently delivers professional support (on a fully traded service basis) to nine out of the ten district and borough councils in the county. One District Council has already given notice of withdrawing from the current arrangements and there are concerns that financial pressures in other borough & districts councils may place this partnership arrangement in jeopardy. Should local partners withdraw in numbers from this arrangement, a reduction in HCC Resilience Officers would be inevitable
CHILDREN, SCHOOLS & FAMILIES: EDUCATION & EARLY INTERVENTION
How have the impact of current year (2010/11) activity levels andbudget variances (pressures) been reflected in proposals for 2011/12 and beyond?
During 2010/11 the service has responded to in year reductions in area based grant and has begun to implement transformation proposals to deliver further savings in future years. In some areas of transformation savings have begun to be realised in 201/11, particularly in relation to the route planning and commissioning of home to school transport. The current year monitoring position has been considered in developing proposals, and there are no major adverse in variations to consider in respect of Education and Early intervention services.
Is the budget sustainable in the medium-term? What is the reliance on one-off funding/reserves/government grants etc?
Within the 2011/12 settlement grant funding for the National Strategies and other programmes to support and challenge schools to raise educational standards, and grant funding to support development of extended schools will be “mainstreamed”, which means these funds will in future be delegated to schools as part of the overall individual Schools Budget and schools will need to determine their local priorities for investment in these activities.
The Standards and School Effectiveness service is making organisational changes in preparation for this reduction in grant income and its transformation proposals recognise and respond to this changing relationship between school improvement and schools, with further trading of services and the potential development of a social enterprise model for the future delivery of these services.
The replacement of Sure Start Grant with a non ring fenced Early Intervention Grant provides an opportunity to review the use of the grant, evaluating the impact of current services covered by the grant and re-directing expenditure to those services and programmes that can make the biggest difference (for example Think Family), decommissioning services that are no longer required, and seeking to identify further savings across these areas of activity.
During 2010/11 the service has responded to in year reductions in area based grant that particularly relating to services for young people and the service’s transformation proposals for 2011/12 onwards take account of the anticipated reduction in these grants during that period. . , and have begun to implement en putting in place arrangements to
How do proposals contribute to CO2 reduction / increased recycling?
The review of home to school transport includes specific objectives to promote more sustainable transport to school, including walking and cycling.
CHILDREN, SCHOOLS & FAMILIES: CHILDREN’S SAFEGUARDING & SPECIALIST SERVICES
How have the impact of current year (2010/11) activity levels and budget variances (pressures) been reflected in proposals for 2011/12 and beyond?
In the first quarter of the financial year 2010/11, the costs of children looked after was continuing to rise with a significant overspend being projected in these areas. Since this time the implementation of Children’s Services Transformation has begun to take effect and the number and average costs of placements have begun to fall. The Children’s service transformation savings presented as part of the IPP process take this first quarter 2010 position as their starting point.
In addition, the proposed 2011/12 budget includes a pressure related to the costs of childcare litigation activity where pressures in this budget have lead to a projected overspend of £1.4m in 2010/11. The service is working closely with the Chief Legal Officer to bring these costs down over the medium term but as childcare cases can take between 12 and 18 months to be completed, litigation costs are estimated to continue at their current level for 2011/12 and then begin to reduce thereafter.
Is the budget sustainable in the medium-term? What is the reliance on one-off funding/reserves/government grants etc?
The key issue for sustainability of the budget relates to planned levels of need within children’s social care in respect of the volume of referrals, numbers of children with child protection plans, and numbers of children looked after. The Children looked after Strategy alongside improvements in early intervention and prevention are expected to reduce the level of referrals to social care and ultimately reduce the number of children and young people with child protection plans or in care, however there continues to be the risk that volumes of caseloads may vary as a result of factors over which the service has limited influence.
How do proposals contribute to CO2 reduction / increased recycling?
Proposals in the Children’s Services budget do not make any direct contribution to CO3 reduction or recycling.
HEALTH & COMMUNITY SERVICES (including Adult Care Services & Libraries)
How have the impact of current year (2010/11) activity levels and budget variances (pressures) been reflected in proposals for 2011/12 and beyond?
Demography pressures are factored into Adult Care Services’ budget proposals annually and are based on national forecasting tools for older people and people with physical disabilities – and on a detailed list of named people and anticipated care needs for people with learning disabilities. All projections are compared with trends from previous years and any current projected budget variance.
Benchmarking information continues to show that Hertfordshire has higher numbers of residential care placements annually for all care groups. All care groups therefore have an ambitious efficiency target relating to keeping people at home with parents or in suitable private or rented accommodation. This manifests itself in lower targets for permanent admissions to care and targets to bring people who live in expensive out of county placements back to Hertfordshire into supported living tenancies.
Targets were met and exceeded for older people last year – with 180 fewer people placed in residential care. A full year effect efficiency of £1M for 2011/12 was also made in learning disability services through movement of people back to Hertfordshire.
ACS’ main budget pressure of £2M within the older people’s care purchasing budget in 2010/11 is being dealt with through price negotiations with homecare providers and management action in-year to halve the pressure. The remainder will be eliminated through delivery of the new enablement homecare service in partnership with Goldsborough which is projected to produce a further £1M efficiency next year through 40% of people who use it not needing on-going homecare after 6 weeks.
The use of personal budgets, where a needs and overview assessment up front identifies an indicative cash envelope to meet people’s care needs, remains a key priority. This will manage people’s expectations on what Adult Care Services can provide for their level of needs, encourage them to exploit the natural support from family, friends and community groups and be more imaginative in meeting their care needs to achieve a better outcome. Approximately 50% of people now have a personal budget.
The library service faces long-term pressure on meeting its income target. Major income streams i.e. hire of audio/visual material and overdue charges are generating less income as alternative sources of supply become available and more use is made of the 24/7 automated telephone and web renewal facilities. Library fees and charges will be increased from April 2011 but it is not expected that this action will resolve the income pressure. The predicted shortfall for 2010/11 is approx £100k, which is nearly 7% of the income target.
Is the budget sustainable in the medium-term? What is the reliance on one-off funding/reserves/government grants etc?
The Coalition Government have set up a commission to review and make recommendations on the future funding of adult social care in the context of an aging population. This will report next summer and is likely to include recommendations on grant formula funding, charging for services and the burden on local tax-payers.
The three-year ring-fenced Social Care Reform Grant ends in March 2011. A number of projects have slipped beyond that date and permission will be sought to carry forward residual monies to end these and mainstream where evaluated evidence shows them to have been successful. A number of fixed-term and permanent staff funded from these budgets will be displaced.