Top

Top

 

Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting : 11th June, 2012

 

Report of the Leader, the Cabinet Member for Social Care and Health (Adults), Lifelong Learning and Libraries and the Cabinet Member for Social Care and Health (Children) and Schools.

Social Services Budget Programme

 

Purpose of the Report

1.             To provide Cabinet with an update regarding the Social Services Budget Programme.

Recommendations

1.             It is recommended that Cabinet:

·               Notes the contents of this report.

·               Continues to receive regular updates on the progress of the Programme.

2.             It is recommended that the Director of Social Services oversees the finalisation of the Social Services Budget Programme Plan no later than September 2012 (for 2013/14 actions) and January 2013 (for 2014/15 and 2015/16 actions).

Reasons for the Recommendations

1.             To ensure that Cabinet endorses the actions being taken to manager the recovery of the 2011/12 overspend and delivery of the savings targets for the next four years.

2.             To ensure that the Social Services Budget Programme has a clear plan for recovering the overspend and meeting corporate savings targets.

Background

2.             After a prolonged history of significant overspends in social services (as high as 13% in 2005/06), effective implementation of the first three-year Change Plan between 2008 and 2011 enabled the Directorate to deliver its statutory responsibilities within the budget set by the Council and to meet a substantial savings target of £6 million. 

3.             This was a significant achievement.  Resource management in social services is inherently problematic.

 

·               Potential demand for most social care services will always exceed supply and so we are always involved in establishing eligibility and in rationing.

·               Like all local authorities in Wales, this Council is heavily dependent on funding from the Welsh Government.  The formula used to allocate this funding is problematic for the Vale of Glamorgan.  It means that social services here receive substantially less money for spending on social services than local authorities similar in size.  The outcome is that our average spend per head of population is relatively low.  Therefore, we have to be exceptionally efficient and, like any other ‘lean’ organisation, there is limited resilience or scope for ineffective use of resources.

·               Decisions which affect the type and cost of services to be provided are often outside of the council's control and may be unpredictable - for example, decisions taken by the court in childcare cases or elderly carers suddenly unable to care for a relative with high support needs.

·               Some individual services are very expensive.  Placements for children or packages of care for adults with complex needs can exceed £200,000 a year.

·               Financial decisions have to follow the changing needs of individual users.

·               Market pressures sometimes mean that councils can face escalating costs when purchasing services in excess of original budget assumptions.

·               While some services are low volume and high cost, others such as the provision of home care and some residential care services are notable for their high turnover and volatility. 

·               Expenditure incurred in one year may lock the council into financial commitments on behalf of individual service users for many years to come.

4.             However in the 2011/12 financial year, there was a significant deterioration in the ability of the Directorate to remain within the budget set. 

5.             In children’s services, cost pressures arose from an increased number of Looked After Children.  This was attributable to:

·               the impact of the Baby Peter case;

·               changed practices in the Family Courts and a growing number of cases involving care orders;

·               the Southwark Judgement which obliges Councils to accommodate increasing numbers of 16 and 17 year olds;

·               a number of very expensive court ordered remands and complex needs residential placements; and

·               the immediate imposition of National Minimum Allowances for Foster Carers by the Welsh Government at rates much higher than those paid in the Vale.

In the Revenue Budget 2012/13, net growth in Children and Young People’s Services includes £157k to meet the Welsh Government national minimum allowance for foster payments.  The increase in children’s out of county placements is estimated at £1.1m.  In order to address this, additional funding of £600k has been provided, with the service taking action to manage placements to meet the balance as part of the Social Services Budget Plan.

6.             In adult services, cost pressures arose from:

·               the Welsh Government (WG) introducing at very short notice the First Steps Improvement Package guidance, which required the Council to introduce a £50 cap on charges for non-residential care services. As at September 2011, the resultant net reduction in income that the Council had to bear was estimated at £650k (i.e. after taking into account £373k funded by WG via Revenue Support Grant). Since that date there has been continuous growth in the number of clients. Consequently, the full year impact is now estimated to have increased from £650k to £1.4 million and there is a potential that this could rise further. The budget for social services in the Vale was based on WG funding these increased costs and discussions are continuing on this issue.

·               the challenging demographic picture in respect of older people and people with very complex needs because of enduring disabilities;

·               a 13% rise in residential care home fees, caused in part by WG guidance on commissioning (which places local authorities at a serious disadvantage in negotiating with independent sector care home providers and makes them more vulnerable to challenge via judicial review); and

·               the current state of the economy which has an inevitable impact on the demand for state-funded social care.

The Adult Services budget for 2012/13 has been increased by £98k to meet increasing numbers of young people with learning disabilities and £402k to meet increasing numbers of older people and people with a mental health problem.  An additional sum of £300k is also included for past demographic growth.  The ongoing impact of increases in care home fees above the level of inflation is estimated at £506k and Social Services have been given growth of £250k.  Adult Services are expected to find the remainder of just over 50% through reducing the Service’s dependence on institutionalised care.  The inability to achieve savings on day care transport costs for clients in receipt of mobility allowance due to changes in regulations is provided for in the sum of £130k. 

7.             To balance the competing priorities of managing service demand, improving quality, meeting higher expectations and reducing expenditure is especially problematic in situations where safeguarding people from harm has to be the key factor in decision-making.

8.             At the time the 2012/13 budget was drafted, it was estimated that there was an underlying overspend of £3,220k to be recovered in future years. This assumed that WG would fund all the costs relating to the First Steps Implementation Package currently estimated at £1,776k (of which only £373k has been funded by WG to date).

9.             Due to the challenges outlined, it is essential to have in place a coherent strategy for securing financial stability within the resources available.

10.        On 16th November 2011, Cabinet approved a report of the Leader and the Cabinet Member for Social and Care Services outlining the serious overspend and pressures on the social services budget.  The report contained details of the urgent action being taken to tackle the factors which produced the overspend (in the form of Budget Recovery Plans) and identified the need for effective project management arrangements to be established. The proposals from the November 2011 report have been reviewed and where they will realise quantifiable savings they have been included in the Budget Programme Plan (attached at Appendix A).

Relevant Issues and Options

11.        Since November 2011 the following actions have been taken.

 

·               Initiate a Programme to manage and monitor the Directorate’s overspend and corporate savings targets.

i) In December 2011, a Social Services Budget Programme was initiated.  This Programme will oversee the delivery of savings projects relating to recovery of the overspend and other savings projects to be delivered by the service as part of existing corporate budget savings requirements.

 

ii)           The Programme uses the Council’s project management methodology and the Programme Sponsor is the Director of Social Services.  A multi-disciplinary Programme Board has been established (Appendix B) and a project manager has been identified from within existing resources to support the projects.

 

iii)          To ensure ownership of projects targeted at savings, project streams have been established in each of the three divisions within Social Services (Adult Services, Children and Young People Services and Business Management & Innovation).  Each Head of Service will act as the Project Sponsor for projects in their area, ensuring a link between accountability for projects and their delivery.

 

·               Establish the up to date financial position of the Directorate and set clear targets for savings for the four years 2012/13–2015/16.

 

i)            As part of the Council’s annual budget setting process, the financial position of the Directorate has been established and budgets set for 2012/13.  The outturn position of the 2011/12 budget is not anticipated to have deteriorated from the forecast reported to Cabinet in November 2011.  The Budget Programme Plan has been set based on the requirements to recover the overspend (as outlined in Appendix C) and to make corporate saving targets.  The savings profile is set out in Table 1.

 

Table 1 Savings Profile

Year

Existing Corporate Savings Target (£000)

Overspend Recovery

(£000)

Total

(£000)

2012/13

754

676

1430

2013/14

1,847

303

2,150

2014/15

1,333

817

2,150

2015/16

-

2,757

2,757

Total

3,934

4,553

8,487

 

·               Review all initial proposals for 2012/13 from the November 2011 Cabinet report to ensure savings are quantifiable, realistic, achievable and time bound.

 

i)            Meetings and workshops have been held with each Head of Service and other managers to review and appraise the proposals to make savings contained in the November 2011 Cabinet report, establish links with other Directorate plans (such as the Change Plan and the Director’s Annual Report) and identify existing corporate savings projects for 2012/13.

 

ii)           Based on this work, the Budget Programme plan has been established as summarised in Table 2.  In 2012/13 the plan aims to save £1,809,596 (£379,596 in excess of the target for the year); however a shortfall of £4,502,404 remains overall.

 

Table 2 Summary Budget Programme Plan

 

Year

Total Savings Required
(£000)

Total Savings
Identified
(£000)

Surplus/
Shortfall on Required Savings

(£000)

2012/13

            1,430

   1,810

   380

2013/14

            2,150

   1,307

  -  843

2014/15

            2,150

      818

   -1,332

2015/16

            2,757

        50

   -2,707

Total

            8,487

    3,985

   -4,502

 

·               Develop and implement key financial and non-financial management information systems.

 

i)            Historically, the Directorate has produced several sets of management information, both financial and non-financial.  This includes budget monitoring reports, financial commitment reports (for adult services care packages), reports on use of domiciliary care provision and key performance indicators.  Each report has been issued by different teams and covered different periods.  As such, the information did not always enable a clear, holistic picture of service performance.

 

ii)           All financial management information in adult services has been reviewed by a multi-disciplinary team comprising officers from corporate and directorate finance and team managers.  A single monthly report is now being issued, outlining care package commitments, changes in provision and use of domiciliary care providers.  There is further work to do in this area.  For example, the monthly report will shortly include the number of care packages started and ended (including the net effect) on a per team basis.  Team managers have been trained in the use of this information pack and a monitoring process has been initiated whereby the Head of Adult Services and Head of BMI will review the report with the Corporate Accountant and raise issues for investigation directly with the relevant team manager.

 

iii)          Management data will be reviewed throughout the programme, making amendments to its content as necessary to ensure that it is accurate, relevant, timely and informative.  Use of the data set will be critical in managing the reduction in budgets in the coming years.

 

·               Initiate projects to reduce the most significant cost pressures (placements for Looked After Children and Adult Services care packages (notably domiciliary)).

 

i)            To arrest the rising pressure on service budgets, action has been taken in the most significant areas of spend – placements for Looked After Children (LAC) and Adult Services care packages. Details of these projects can be found in Appendix A

 

ii)           The Internal Audit report regarding the Welsh Government’s First Steps initiative has verified the figures submitted by the Council.  Discussions are ongoing with the Welsh Government to determine whether any further funding will be forthcoming; should this not be the case, it will contribute an additional £1400k to the underlying overspend.

 

·               Communicate the status of the Directorate’s budget with key stakeholders

 

i)            In order to address the financial position of the Directorate in this and coming years, support from all stakeholders will be necessary to meet the significant challenges the Council faces. A range of communication activities have taken place, including:

 

a)           The Annual Letter from the Director to staff focused on the role all of them play in ensuring that services are managed within budget.  This message will be reinforced by a paper called Resource Management in Social Services: Guidelines for Good Practice (Appendix D), to be included in the procedural manuals for the Directorate.

 

b)           A report to Social Care and Health Scrutiny Committee (January 2012) outlined the measures being taken to tackle the overspend.

 

c)           A report was issued and briefing session held for all Elected Members (January 2012) on the cost pressures faced by the Council and how these are to be tackled.

 

d)           The Leadership Forum for social services managers in February focused on resource management issues.

 

e)           Team Manager meetings have been held in all three divisions to communicate the budget situation and the revised savings targets for the next four years, highlighting individual accountability for budget management.

 

12.        As outlined above, a shortfall of £4,502k remains for the programme overall.  In order to finalise the programme plan, a review of projects in the November 2011 Cabinet report for 2013/14 – 2015/16 will be undertaken to ensure each is quantifiable, realistic, achievable and time bound.

 

In addition, it is vital that projects are initiated in time to realise savings when they are due to do so.  The nature of projects to address savings targets in 2013/14 (such as the continuation of the review of residential services and learning disability day and respite services) is more complex and require longer lead in times.  These projects will need cross-council project teams and commitment to deliver.

 

Proposals to meet the savings targets for 2013/14 will be reviewed and agreed by the Programme Board by September 2012 with the proposals to meet 2014/15 and 2015/16 targets agreed no later than January 2013.

 

The use of the management information being provided to team managers will be a key monitoring tool to ascertain that savings are being achieved and to ensure robust financial management.  Processes for reporting and escalating risks and issues will be further developed as the Programme progresses.

 

13.        As the Programme continues, the programme will:

·               continue to identify projects and opportunities for further savings;

·               reset the savings targets, based on future cost pressures and corporate savings targets from the next medium-term financial plan as appropriate.

·               continue to monitor progress against the Programme Plan.

·               in the 2012/13 Audit Plan, allocate in excess of one FTE of audit time to the Directorate, a proportion of which will be used to measure objectively the performance of the Programme.

Resource Implications (Financial and Employment and Climate Change, if appropriate)

14.        Changes in future service provision may impact upon staffing levels and due consideration will be given to the Council’s employment policies and procedures.

15.        The Social Services Directorate will ensure that this work is undertaken within available resources.

Legal Implications (to Include Human Rights Implications)

16.        There are no legal implications arising directly from this report.

Crime and Disorder Implications

17.        There are no crime and disorder implications arising from this report.

Equal Opportunities Implications (to include Welsh Language issues)

18.        There are no equal opportunities implications arising out of this report.

Corporate/Service Objectives

19.        Key objectives of the Council addressed by this report are:

·               to make the Vale a safe and healthy place in which individuals, children and families can live their lives to the full; and

·               to manage the Council's workforce, money and assets efficiently and effectively in order to maximise its ability to achieve its service aims.

Policy Framework and Budget

20.        This report is a matter for executive decision.

 

Consultation (including Ward Member Consultation)

21.        There are no matters in this report which relate to an individual ward.

 

Relevant Scrutiny Committee

22.        Social Care and Health

 

Background Papers

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.

 

Contact Officer

Philip Evans, Director of Social Services

 

Officers Consulted

Corporate Management Team

 

Responsible Officer:

Philip Evans, Director of Social Services

Sian Davies, Director of Resources