Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 16th November, 2011
Report of the Leader and the Cabinet Member for Social and Care Services
Pressure on the Social Services Revenue Budget 2011/2012 and Budget Recovery Action Plans
Purpose of the Report
1. To secure Cabinet approval for proposals to address the projected overspend within Social Services.
1. Notes the need for effective action in tackling the serious overspend and pressures within the social services budget.
2. Endorses the proposals outlined in the budget recovery action plans for Children and Young People's Services and for Adult Services, including setting up a multi-disciplinary project team and a project board.
3. Receives further reports about the progress made in implementing the plans together with other options to address the issues arising as necessary.
4. Refers this report to the Corporate Resources and Social Care and Health Scrutiny Committees for information.
Reasons for the Recommendations
1. To ensure that Cabinet is aware of the need for effective measures to deal with projected overspends in the social services budget.
2. To secure approval for and take forward the budget recovery action plans for social services.
3. To provide Cabinet with regular opportunities to ascertain whether the budget recovery plans are bringing expenditure under control and to provide alternative options for consideration as necessary.
4. To ensure that the relevant Scrutiny Committees are able to exercise effective oversight of this key area of activity.
2. On 28th February 2011, Council approved the Capital and Revenue Budget for 2011/12. The expenditure monitoring report for 1st April to 31st July in respect of the social services budget showed that by year-end Children and Young People's Services could overspend their budget by £975,000. This could be offset by use of a ‘one off’ provision of £210,000. The budget was under considerable pressure because of rising numbers of children who are in the care of the Council and a number of exceptionally high cost placements.
3. The subsequent revenue monitoring report for the period to 31st August showed that the gross overspend was projected to continue at the same level but that there was an additional pressure on Children and Young People's Services as a result of the recommended National Minimum Allowance for foster carers introduced by Welsh Government. The required changes in policy will cost the Council an additional £157,000 per year.
4. For Adult Services, it was projected that by year-end they could overspend their budget by £654,000. This had arisen from:
· the need to increase fees payable to care homes by over the 2% inflation included in the 2011/12 budget, a change that is likely to cost £0.5m per year;
· the continuing pressure on the budget for Community Care packages;
· changes required to the Council's charging policy to ensure compliance with the Measure, Regulations and Guidance issued by the Welsh Government, which became effective in April 2011; and
· difficulties in achieving some of the 2011/12 savings targets.
· The gross overspend of £654,000 could be partly funded by a specific provision of £465,000.
5. To assist local authorities with the implementation of the new £50 maximum charge for adult non-residential care, the Welsh Government allocated a sum to each local authority as part of the Revenue Support Grant settlement. For 2011/2012, the allocation for this Council was £373,000. However, as at September 2011, it is estimated that the net impact to the Council for the year as a result of implementing the Measure could be as much as £1m. This issue is to be further reviewed by Internal Audit. A number of other local authorities which did not have a maximum charge before introduction of the new regulations have also experienced a considerable impact. Even taking this into account, the figure for the Vale of Glamorgan appears to be disproportionately high. Welsh Government officials have been monitoring the situation across all local authorities; they have agreed to work with the Council in considering urgently how we have calculated the impact and whether a further allocation may be appropriate.
6. As at September 2011, the projected gross deficit for 2011/12 (i.e. before any funding from specific provisions is made) now stands at £1.3m for Children and Young People’s Services and £2.4m for Adult Services.
7. All of this is clearly a very worrying position for the Council, made even more compelling by the exceptionally difficult financial context and the fact that the use of provisions is a one-off source of funding, not a long-term solution.
Relevant Issues and Options
8. In response to evidence of a deteriorating financial position, officers from the Social Services Directorate and the Financial Services Division have analysed the pressures on budgets. The report of the Head of Children and Family Services in respect of expenditure on children looked after by the Council is attached at Appendix 1. The report produced by the Heads of Adult Services and Business Management & Innovation on the community care budget in Adult Services is detailed at Appendix 2. The reports also set out the service context, the response to date and proposed next steps.
9. These reports have been used as the basis for drafting budget recovery action plans which will be used to develop a framework for the Directorate's efforts to bring budgets under control as soon as possible. The plans are attached at Appendices 3 and 4.
10. In drawing up the plans, opportunities for using supplementary grant funding, deferring expenditure, improving efficiency, generating income and reducing service expenditure have been considered. Some of the actions have longer lead-in times than others, especially solutions which are more strategic in nature. Cabinet will be provided with reports about progress made in implementing the plans alongside social services revenue expenditure monitoring reports.
11. The Directorate will need some additional support to take forward urgently all the initiatives required. This includes help with project management using the Council’s corporate methodology and toolkit through multi-disciplinary project teams overseen by a project board. It is especially important that Financial, Internal Audit, Legal and HR Services continue to provide timely corporate support so that all parts of the Council can work together in finding deliverable solutions to the problems we face and that there is appropriate capacity within Social Services to manage the process through. Social Services will afford considerable priority to implementing the whole range of remedial measures described in the plans, in order to fund potential shortfalls from within existing budgets wherever possible. It should be noted, however, that Social Services (like other Council services) are committed to achieving efficiency savings. Specifically, for Social Services, these total £4.235m between 2011/12 and 2013/14 with at least another £1.333m earmarked in 2014/15 and the continued prospect of further reductions in expenditure over later years.
12. Whilst balanced budgets have been delivered in recent years, the increased financial burden of funding social care in the Vale of Glamorgan has to be seen also in the context of significant pressures experienced in many other local authorities across Wales. The Council faces formidable challenges in delivering high quality social services - most obviously in finding ways to bridge the gap between the reducing resources available and the year-on-year growth in social care demand (resulting from demographic trends, increased citizen expectations, changing family structures and increasing numbers of people with long standing and complex disabilities) and in costs. To balance the competing priorities of managing service demand, improving quality, meeting higher expectations and reducing expenditure is exceptionally difficult, especially problematic in situations where safeguarding people from harm has to be the key factor in decision-making.
13. The only way in the long term to deal effectively with a context where the need for social care is growing rapidly and resources are not keeping pace is a combination of retrenchment, reducing costs and reshaping services to divert demand. It is proving difficult to get such changes in place as quickly as required, partly because of the clear impact of a depressed economy.
14. There are many obstacles to overcome.
· Some of the national systems underpinning the provision of social care are fundamentally broken, especially the economic model (given the failure to deal with issues around paying for care).
· Our budget management strategy is too often undermined by Welsh Government initiatives that are ill-conceived and not costed properly.
· Our key partners in the NHS have yet to find effective ways of stopping the acute hospital sector retaining a disproportionate share of resources vis-à-vis community health services.
15. However, progress is being made. Because of the difficult financial context and increasing demands for services, the only sustainable answer for social services in the longer-term is for the Council and its partners to change the pattern of services - based upon an understanding that we need to promote independence and focus services away from institutional settings and into people’s homes and local communities. This agenda and the actions needed are set out in our second three-year change plan for social services, which will now need to be reviewed given the recent budgetary developments.
16. The change plan will help us to tackle the strategic agenda required, especially in developing the tools needed for reshaping services (with better links between planning and partnerships, commissioning and contracting and resources management). The Directorate’s work on new services models is beginning to produce dividends. With the Social Services Improvement Agency (SSIA), we have been able to emphasise the role of services for older people which are geared towards reablement and restoration. This will enable us to lessen the grip of traditional organisational silos and help us to develop integrated models of health and social care. There is increasing acceptance too of social recovery models in Mental Health and valuing people approaches in Learning Disabilities. We are pioneers in establishing a coherent approach to the preventive, protective and remedial initiatives contained in the Child Poverty Strategy (Flying Start, Families First and the Integrated Family Support Service). The Vale of Glamorgan has taken a leading role in taking forward the work of the regional improvement collaborative (SEWIC) in reshaping services.
17. Although not yet producing quantifiable savings, the work being done on new models of care has clear merits:
· providing opportunities for creative thinking about how services are delivered, encouraging dialogue and getting consensus about overall direction;
· providing a way of establishing priorities and clarity for staff, partners and service users/ carers;
· helping to embed concepts which service users and others believe are necessary to underpin a dignified life– independence, choice and control, wellbeing, social inclusion;
· acting as a precursor for decisions about investment of resources and commissioning;
· encouraging more investment in preventative services to divert people from inappropriate and higher cost provision or managing demand at lower levels of intensity/intrusiveness; and
· generating debate about tiers of services, thresholds and access without complex assessments by social workers.
18. The next steps must involve turning these service models into effective commissioning strategies and plans. We should also incorporate new ideas about possible service delivery models – social enterprises, cooperatives, trading companies, etc. Our own staff are beginning to respond positively to new ideas about how to provide effective and efficient services but there is much work to be done in getting changes in practice and provision. One of the key success criteria for this work is consistent, visible and enabling leadership by managers in social services. Recent management reconfigurations mean that the Directorate will be better equipped to provide this leadership.
19. Much of the work to achieve this and the cost savings required for a balanced budget are reflected in the Heads of Service budget recovery action plans. However, many of the proposals have yet to be quantified in financial terms and in achievable delivery times. This will necessitate setting up multi-disciplinary project Teams. It is by no means certain at present that these will realise the level of savings required to address the projected overspend within the expected timeframe, particularly when viewed alongside the significant savings targets already set. This may require further consideration in terms of the type and levels of service provided in the future as part of the Social Services Change Plan.
Resource Implications (Financial and Employment and Climate Change, if appropriate)
20. The latest projected gross deficit for 2011/12 for Social Services is £3.7 million. Action will need to be taken to address this overspend.
21. The Heads of Service budget recovery action plans include reference to certain actions required to meet future years’ allocated savings targets totalling £464,000. These will not result in a reduction in the underlying overspend unless they are in excess of the allocated sums.
22. Further efficiency savings have been allocated by the Council and will need to be found by Social Services in 2012/13 and 2013/14, totalling £754,000 and £1.847m respectively. A provisional target of £1.333m has been identified for 2014/15 although this is likely to increase and the pressures on funding are also expected to continue in future years.
23. Net cost pressures of £4m have been estimated for the service for 2012/13, most of which are connected with the cost of LAC services, the introduction of the First Steps Improvement Package initiative (£50 cap) and care home fees. It is doubtful whether funding will be available as part of the 2012/13 budget process to fully counteract these future pressures, which may serve to exacerbate the situation further.
24. Changes in future service provision may impact upon staffing levels and due consideration will be given to the Council’s employment policies and procedures.
Legal Implications (to Include Human Rights Implications)
25. The legal and human rights implications associated with any measures proposed to achieve savings will be fully considered as part of the project management process.
Crime and Disorder Implications
26. There are no crime and disorder implications as a direct result of this report.
Equal Opportunities Implications (to include Welsh Language issues)
27. Section 149 of The Equalities Act 2010 has replaced and incorporated the Race Relations Act 1976, the Sex Discrimination Act 1975 and the Disability Discrimination Act 1995 Public Sector Duties. Section 149 states:
A public authority must in the exercise of its functions give due regard to the need to:
a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.
28. A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to the matters mentioned in subsection (1).
29. Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;
b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;
c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.
30. The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.
31. Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to:
a) tackle prejudice, and
b) promote understanding.
32. Compliance with the duties in this section may involve treating some persons more favourably than others but this is not to be taken as permitting conduct that would otherwise be prohibited by or under this Act. The relevant protected characteristics are - age; disability; gender reassignment; pregnancy and maternity; rate; religion or belief; sex, sexual orientation.
33. Any changes to social care services should demonstrate compliance with the Act and Equalities Impact Assessments to be carried out where appropriate.
34. The budget recovery plans will contribute to the corporate priority of "working with partners to meet the diverse needs of our residents in ways that will safeguard and support those who are most vulnerable and in greatest need; help people to keep fit and healthy; and increase social cohesion and equality of opportunity for all."
Policy Framework and Budget
35. This is a matter for executive decision.
Consultation (including Ward Member Consultation)
36. There are no implications for individual Wards as a direct result of this report.
Relevant Scrutiny Committee
37. Corporate Resources and Social Care and Health.
Cabinet meeting on 5th October 2011 - Revenue Monitoring for the period 1st April 2011 to 31 August 2011
Cabinet meeting on 7th September 2011 - Revenue Monitoring for the period 1st April 2011 to 31 July 2011
Cabinet Meeting on 13th April, 2011 - Social Services Change Plan 2011-2014
Philip Evans, Director of Social Services
Corporate Management Team
Philip Evans, Director of Social Services
Sian Davies, Director of Finance, ICT and Property