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ITEM EX5 - ANNEX 3

EXECUTIVE – 16 MARCH 2004

FINANCIAL MONITORING

MONTHLY MONITORING REPORT – JANUARY 2004

LEARNING & CULTURE DIRECTORATE

Report by the Head of Finance and Director for Learning & Culture

1. Significant pressure has been put on the Learning & Culture Directorate budget in 2003/04 by substantial increases in the costs of pupils with Special Educational Needs (SEN). The July monthly monitoring report to the Executive (September) identified an overspend of £971,000 on the Out County Budget and £950,000 on the provision of statements of SEN for pupils in Mainstream Schools.
2. The Out County budget provides for pupils with SEN to be educated in the independent sector, where Oxfordshire schools cannot meet the pupils’ needs. Despite growth being added to the budget, bringing total resources to £2.4m, there was both an unprecedented increase in the average costs per placement of 23% and an increase of 10 placements overall (62 compared to 52 in September 2002). Oxfordshire has in the recent past managed to control the number of placements but has lost a number of tribunals over recent months, a pattern repeated in many LEAs. However, Oxfordshire still spends significant less on Out County placements than other authorities. Oxfordshire currently has 0.3 pupils per 1000 in independent school provision, compared with a mean of 0.92 per 1000 in South East authorities.
3. The pressures are equally great on the statementing budget. Inadequate monitoring information in 2002/03 meant that insufficient resources were included in the base budget. The position has been exacerbated with an in year growth of circa £400,000.
4. It has not been possible to manage these overspends in year within the overall Directorate budget. This is mainly due to a lack of flexibility within the overall budget but also to the overspends not being identified until half way through the financial year. It is fair to say that in previous years a proportion of such an overspend could have been managed in year against budgets which historically underspent. These budgets were, rightly, offered up as efficiency savings as part of the 2003/04 budget setting process.
5. A number of actions are being taken to manage the position and ensure it does not recur. As set out above it is not possible to manage the SEN overspend in year. A proposal to meet the overspend over 3 years was put forward and has been included in the agreed budget. A number of strategies have been put in place to control SEN expenditure:

• a large element of the pressure on the out-county budget relates to post-16 pupils with SEN who are the funding responsibility of the Learning and Skills Council. Pressure is being put on the LSC and DfES to fund Oxfordshire County Council appropriately for post 16 SEN;
• there are a small, but increasing, number of children with emotional and behavioural difficulties requiring out-county placements. The Executive is currently consulting on proposals to create additional in-county day and residential places for children with emotional and behavioural difficulties and to manage these jointly with Social & Health Care;
• there are a small, but increasing, number of pupils with severe learning difficulties/autism with severe and challenging behaviour requiring out-county placements. The Executive is currently consulting on proposals to increase resources to meet these children's needs in-county;
• robust systems have been established for monitoring new children at risk of requiring out-county placements in time to take action with other agencies to make appropriate provision in-county;

• the statementing budget for 2004/05 is based on sound projections of expenditure;
• a robust system is in place for analysing all new requests for assessment and all new statements and ensuring that resources are allocated in line with established criteria;
• robust systems have been established for monitoring expenditure on statementing and taking appropriate action as necessary to manage within budget;
• the Council's new SEN strategy ensures that resources are targeted to early intervention, for example the extension of the SEN Index to nurseries, the allocation of resources for the development of in-school learning provision, exploration with schools of the delegation of the statementing budget from April 2005. The aim is to increase the number of children whose needs can be met without a statement, thereby reducing expenditure on statementing.

6. Having addressed the SEN issues, the Directorate finances are broadly in balance. This is an improvement on the position reported in December. At that time it was stated that, typically during the year there is greater certainty concerning overspends than underspends. It is anticipated that more rigorous monitoring to the year-end will identify the necessary underspends to balance the budget. This process has been backed up by regular meetings between the Director, individual Heads of Service and the Strategic Finance Manager. Such measures as a vacancy freeze were examined by the Directorate Leadership Team but the negative impact on service delivery were considered to outweigh any financial benefits.
7. The Statementing and Out County provision do remain as the areas of potential risk for 2004/05. In respect of Statementing the allocations for the new financial year are being finalised in readiness to be sent out to schools as part of their formal budget notifications. In the next report an analysis will be provided of that element of the budget unallocated at this stage and available to meet in year growth. Likewise, an analysis will also be provided of the current on going commitments in respect of the out county budget.
   
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