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ITEM EX5 - ANNEX B
EXECUTIVE
– 19 MARCH 2002
UPDATED FINANCIAL
REPORT – 2001/02
Report by
the Director of Social Services and
Director
of Business Support & County Treasurer
Introduction
- This Updated Financial
Report shows the 2001/02 budget for the former Social Services Committee,
together with the projected year end variation based on the latest information
available.
- This report shows
that the significant budgetary pressures for 2001/02 that were reported
in the last Quarterly Financial Report have been revised upwards. The
current position, compared to the position at the beginning of December
is as follows:
| |
December
£’000
|
February
£’000
|
Change
£’000
|
|
Current
Total Forecast Pressures 2001/02
|
6,672
|
7,019
|
347
|
|
Current
Year Savings Plans
|
3,504
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1,718
|
1,786
|
|
Forecast
Year End Overspend 2001/02
|
3,168
|
5,301
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2,133
|
- There were concerns
stated in the previous Quarterly Financial Report that whilst some of
the predicted outturn figures will improve, other pressures will almost
certainly increase and some proposed savings will prove difficult to
deliver. This has proved to be the case and the Budget Working Group
for Social Services has been considering monthly reports of the position.
The potential overspend position has gradually worsened since December
due to a variety of factors including expenditure pressures that had
not been previously reported or identified and some savings proposals
proving to be non-deliverable.
- Although the table
above indicates that expenditure pressures have increased by about £0.3m,
in practice there has been an increase in new pressures of about £1.4m.
There are two principal elements to this relating to intentionally homeless
and the proposed saving on home care following the best value review.
These are covered in more detail in paragraphs 12 and 18 below. The
new pressures of £1.4m have been offset by savings that have materialised
of £1.1m.
- The reduction
in savings plans of £1.8m is partly as a consequence of the £1.1m savings
having materialised and partly due to savings that are now deemed non-deliverable
in the year of £0.7m. Over half of these latter savings have only been
delayed and should be deliverable next year.
- The detail of
the pressures and action being taken is contained in Annex 1.
(download as rtf. file). This Annex
is an exception report highlighting the pressure areas, consistent with
reports to the Budget Working Group. Annex 2 (download
as rtf. file) contains the 2001/02 budget for the former Social
Services Committee along with the projected variations. Annex 3 (download
as rtf. file) contains a summary of the budget virements or variations
and Annex 4 (download as rtf.
file) states the levels of grant funding currently expected to be
received by the Department.
- It is difficult
in some cases to tie up the figures from Annex 1 with Annex 2 because
Annex 1 is a presentation of how the budgets are managed within Social
Services whereas Annex 2 is the budget that is formally reported nationally
in order to maintain consistency for comparison purposes. This has caused
problems in managing and reporting on Social Services budgets within
the Council for a number of years. As a consequence, in setting the
budget for 2002/03 we will be presenting it and reporting on it in a
consistent way that will hopefully be easily understood and will represent
how the department manages the budget. National reporting will be dealt
with separately.
Summary of
Major Pressures
- The table below
summarises the main pressures that the Social Services Department is
facing.
|
Budget
Pressure
|
Dec
£’000
|
Feb
£’000
|
|
Children
and Families – Agency Placements
Children
and Families – Foster Care
Children
and Families – Intentionally Homeless
Older
People – Care at Home
Older
People – Independent Residential and Nursing Care
Older
People – Internal Residential and Nursing Care
Physical
Disabilities – Community Support
Learning
Disabilities – Agency Residential
Home
Care P&B Cut
Shortfall
on Income
Carry
Forward from 2000/01 (including commitments)
Miscellaneous
|
1,411
515
0
1,229
1,212
261
315
153
0
750
577
249
|
884
495
641
669
1,160
104
316
322
500
540
577
811
|
|
Total
|
6,672
|
7,019
|
- The issues relating
to the various Divisions of the department are considered in turn.
Services for
Children & Families
- Work has continued
with regard to reducing the pressure on the Agency and Foster Care Budgets
with some limited success. The large reduction in Agency spend is primarily
due to the use of the new Leaving Care funds to offset the costs of
children who can be reasonably offset against this grant. In addition,
Social Services has been allowed to use the £500k SSA adjustment for
Leaving Care which could have led to a reduction in the Department’s
2001/02 budget.
- There is still
a target to restrict the overspend to £800k on Agency placements and
£300k on Foster Care. However, it is unlikely that this will be fully
attained. The Children’s Division staff are still working hard to maximise
savings where possible.
- Another problem
area has been the Children’s Division taking on responsibility for families
who are intentionally homeless. In theory, the accommodation costs linked
to these families should be reclaimed via housing benefit. However,
due to high landlord rents and some difficulties around housing benefit
claim forms, it is apparent that not all costs will be recouped from
housing benefit receipts. Of the £650k of housing costs currently being
incurred, it is estimated that £200k will be reclaimed from benefits.
The balance will be a pressure on the Children’s Division budgets. All
placements have now ceased and it is hoped that a more exact benefit
figure will be available from the City Council soon.
- In relation to
the charging policy for children in care, the Executive agreed on 6
February for the proposals to proceed. Current expectations are that
the financial implications will be delivered next year.
- There are other
pressures in the Children & Families Division that were mentioned
in the last Quarterly Financial Report:
- The shortfall
of income at Thornbury House has decreased to around £50k. This reflects
greater efforts to speed up room repairs so that funding from the
Youth Justice Board is not lost because of room unavailability.
- The cost of
home care for children is still currently forecast to overspend by
about £100k. There has been a freeze on any new expenditure and a
review of existing services.
Services
for Older People
- The cost pressures
within the residential and nursing sector relate to large fee increases
that were necessary to maintain capacity (£367k) and the expectation
that the Health Authority would assume a greater responsibility for
the costs of certain clients following the Coughlan judgement (£845k).
The Health Authority is unable to fund this responsibility from within
its current resources. Officers worked closely with the Health Authority
to put a bid together for additional resources from the Change Agency
within the NHS. This bid has only been partially successful and is unlikely
to help with the current cost pressures as the resource allocated (£230k)
is for new spend.
- The Department
has continued to make use of the bed blocking grant to allow placements
from hospital, whilst attempting to control spending against base residential
care budgets. It has been difficult to maximise the use of the bed blocking
grant in this financial year because of the danger of over-committing
the grant for next year.
- The action to
increase the eligibility criteria and reassess all care packages in
relation to Community Care is producing results. The reduction in the
external care spending, combined with further savings on internal Home
Care provision has produced nearly £600k of savings so far against a
target of £1m this year.
- A further problem
has been recently identified relating to a policy and budget plan saving
of £500k, which was the outcome of the Best Vale review of Home Care.
This plan was based around increasing the contribution from Health to
Home Care packages in certain circumstances. In practice, an additional
contribution from the Health Authority has been received approaching
£500k. Unfortunately, expenditure has also increased by this amount
and as a consequence there is no saving.
Services for
People with Learning and Physical Disabilities
- It is now accepted
that the targets for Physical and Learning Disabilities to underspend
by £150k and £250k respectively were ambitious. These targets have been
revised to a more realistic level. By making placements in an emergency
only, by reproviding services through the supporting people programme
and by the judicious use of external funding, the target is to eliminate
the current level of overspend. This may not be possible in the time
left before the end of the year.
Management
and Support Services
- The forecast overspend
position in this area has increased to £436k. The main factors contributing
to this overspend are increased central support charges (£191k), Repairs
& Maintenance (£96k), IT License purchases (£61k), Planning into
Action (£50k) and the review of financial management (£18k).
Charging for
Services
- The forecast shortfall
in income has been reduced to £540k for Home Care Services, although
this is still a very difficult area to monitor because of the difficulty
in managing information from the systems. The reduction is basically
due to higher than expected levels of home care income being forecast.
Of course, as the department has restricted access to Home Care services
in the latter part of the year, it is possible that the income position
could deteriorate. However, any such deterioration is very difficult
to analyse and forecast at this stage.
Asylum Seekers
- There is no further
progress to report on the negotiations over disputed invoices relating
to asylum seekers. The expected settlement is in line with the accounts
for last year. However, should the Council have to settle for a higher
figure, additional funding would be necessary.
- The Home Office
have confirmed grant levels for the financial year at the same level
as in 2000/01. Expenditure will be fully funded by grant with no shortfall.
Carry Forward
from 2000/01
- The Social Services
Committee overspent by £577k in 2000/01, after taking into account the
resources carried forward to fund commitments. In accordance with the
Council’s budget management arrangements this has been carried forward
to be funded in the current year.
Homes for
Older People Externalistion
- The Homes transfer
is now complete.
Review of
Financial Management
- The Executive
has received the FINE report as the review of financial management arrangements
within the department. The recommendations were accepted in full.
Conclusions
- This report has
detailed a deterioration in the financial position for the Social Services
Committee. The report has highlighted a potential overspend against
budget of £7m based on existing expenditure trends. A number of actions
are being taken that should reduce this overspend by some £1.7m. In
attempting to bring this spending under control, there is a risk that
individuals will be placed at risk in the community. This could damage
our performance as measured by the Government, and may lead to legal
challenge. In delivering the action plan, there still remains a potential
shortfall of £5.3m in 2001/02.
- As stated in the
last Quarterly Financial Report, there are a few major factors that
could affect the final outturn position and there is still concern that
the outturn position could be worse than reported here. There is specific
concern over whether, despite action being taken, we will deliver some
of the planned savings. Of particular concern are the savings on Children’s
Agency placements (£84k), Foster Care Placements (£195k), savings on
Residential and Nursing Care (£500k) and Physical and Learning Disabilities
(£582k). Set against this, the department has been restricting expenditure
wherever possible and is working towards maximising income from government
grant. There is an expectation that this will generate savings, as yet
not quantified.
- It is difficult
to estimate the impact of all these potential changes on the final position
but we will clearly inform members as soon as information becomes available.
Environmental
Implications
- There are no environmental
implications arising directly from this report.
Financial
Implications
- This report is
concerned with the future financial position of this Committee and all
implications are contained within the body of the report.
Staff Implications
- It should be noted
that increasing workloads arising from the need to manage the development
of new services arising from specific grants, the Policy and Budget
Plan targets and the recruitment problems are all putting increased
pressure on staff within this Department.
Implications
for Carers, Ethnic Minorities and People Living in Poverty
- There are no direct
implications for these groups arising from this report, as this report
contains no new proposals. However the level of cuts and service changes
facing Social Services has a direct impact on these groups as Social
Services provides services only to the most vulnerable groups in the
community. Future action required to contain these expenditure pressures
could impact further on these groups.
RECOMMENDATIONS
- The Committee
are RECOMMENDED to receive the report.
CHRIS
GRAY
Director of
Business Support & County Treasurer
MARY
ROBERTSON
Director of
Social Services
Background
Papers: Nil
Contact
Officer: Paul Gerrish, Assistant County Treasurer, (01865) 815730
March
2001
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