Agenda Item No.
THE VALE OF GLAMORGAN COUNCIL
CABINET: 30TH JULY, 2012
REFERENCE FROM SCRUTINY COMMITTEE (SOCIAL CARE AND HEALTH): 16TH JULY, 2012
" SOCIAL SERVICES BUDGET PROGRAMME (DSS) -
Committee were provided with an update regarding the Social Services Budget Programme.
The Deputy Leader and Cabinet Member for Adult Services together with the Cabinet Member for Children's Services were present at the meeting.
Resource management within Social Services was inherently problematic because:
· Potential demand for most social care services would often exceed supply, and so the Council was always involved in establishing eligibility.
· Like all local authorities in Wales, this Council was heavily dependent on funding from the Welsh Government. The formula used to allocate this funding was especially problematic for the Vale of Glamorgan which meant that Social Services here received substantially less money for spending on Social Services than local authorities similar in size.
· Decisions which affected the type and cost of service to be provided were often outside the Council's control and may be unpredictable.
· Some individual services are very expensive. Even with the appropriate efficiency measures and controls operating well, placements for children most at risk or packages of care for adults with especially complex needs could 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.
· Whilst some services were low volume and high cost, others such as the provision of home care and some residential care services were notable for their high turnover and relativity.
· Expenditure incurred in one year may knock the Council into financial commitments on behalf of individual service users for many years to come.
· To balance the competing priorities of managing service demand improving quality, meeting higher expectations and reducing expenditure was especially difficult in situations were safeguarding people from significant harm had to be the key factor in decision making.
After a prolonged history of significant overspends in Social Services, effective implementation of the first 3-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. However, in the 2011/12 financial year, there was a significant deterioration in the ability of the Directorate to remain within the budget set.
In Children's Services, cost pressures arose from an increased number of Looked After Children. Net growth in Children and Young People Services Revenue Budget 2012/13 included £157,000 to meet the Welsh Government national minimal allowance for foster payments. The increase in Children's Out of County Placements was estimated as £1.1 million. In order to address this, additional funding of £600,000 had been provided, with the service taking action to manage placements to meet the balance as part of the Social Services Budget Plan.
In Adult Services, cost pressures arose from:
· The Welsh Government (WG) introducing 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 £650,000. Since that date, there had been continuous growth in the number of clients and consequently, the full year impact was now estimated to have increased to £1.4 million and there was a potential that this could rise further.
· 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 the WG guidance on commissioning.
· The current state of the economy which had an inevitable impact on the demand for state funded social care.
The Adult Services budget for 2012/13 had been increased by £98,000 to meet increasing numbers of young people with learning disabilities and £402,000 to meet increasing numbers of older people and people with a mental health problem. An additional sum of £300,000 was also included for past demographic growth. The ongoing impact of increases in care home fees above the level of inflation was estimated at £506,000 and Social Services had been given growth of £250,000. Adult Services were expected to find the remainder of just over 50% through efficiency savings and service redesign.
At the time the 2012/13 budget was drafted, it was estimated that there was an underlying overspend of £3,220,000 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 £1,776,000 (of which £373,000 had been funded by WG to date).
Given this challenging context, it was essential that the Council had in place a coherent strategy for securing financial stability within the resources available.
On 16th November, 2011 Cabinet approved a report outlining the serious overspend and pressures on the Social Services budget. The report contained details of the urgent actions being taken to tackle the factors which produced the overspend and identified the need for effective project management arrangements to be established. The proposals from that report had been reviewed and, where they would realise quantifiable savings, they had been included in the Budget Programme Plan, a copy of which was attached to the report.
Since November 2011 the following actions had been taken:
· Initiate a programme to manage and monitor the Directorate's overspend and corporate savings target.
(i) In December 2011, a Social Services Budget Programme was initiated which would 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.
(iii) To ensure ownership of projects targeted at savings, project streams had been established in each of the three divisions within Social Services. Each Head of Service would act as the Project Sponsor for projects in their area.
· Establish the up to date financial position of the Directorate and set clear targets for savings for four years 2012 - 2015/16
(i) As part of the Council's annual budget setting process the financial position of the Directorate had been established and budgets set for 2012/13. The outturn position of the 2011/12 budget had improved from the forecast reported in November 2011 but the overspend was still £2.387 million. The Budget Programme Plan had been set, based on the requirement to recover the overspend and to make corporate savings targets. The savings profile was set out in Table 1 of the report.
· 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 had 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 and identify existing corporate savings projects for 2012/13.
(ii) Based on this work, the Budget Programme Plan had been established as summarised in Table 2 of the report. In 2012/13 the plan aimed to save £1,809,596 but a shortfall of £4,502,404 remained overall.
· Develop and implement key financial and non-financial management information systems
(i) Historically, the Directorate had produced several sets of management information, both financial and non-financial. Each report had 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 had been reviewed by a multi-disciplinary team comprising officers from corporate and directorate finance and team managers. A single monthly report was now being issued, outlining care package commitments, changes in provision and the use of domiciliary care providers. There was further work to do in this area.
(iii) Management data would be reviewed through the programme, making amendments to its content as necessary to ensure that it was accurate, relevant, timely and informative. Use of the data set would be critical in managing the reduction in budgets in the coming year.
· Initiate projects to reduce the most significant cost pressures (placements for Looked After Children and Adult Services care packages (notable domiciliary))
(i) To arrest the rising pressure on service budgets, action had been taken in the most significant areas of spend - placements for Looked After Children and Adult Services care packages. Details of these projects were itemised in Appendix A to the report.
(ii) The Internal Audit report regarding the WG's First Steps initiate had verified the figures submitted by the Council. Discussions were ongoing with WG to determine whether any funding would be forthcoming. Should this not be the case, it would contribute an additional £1,400,000 to the underlying overspend.
· Communicate the status of the Directorate's budget with key stakeholders
(i) To address the financial position of the Directorate in this and coming years, and to meet the significant challenges the Council faced, support from all stakeholders would be necessary. A range of communication activities had taken place, including:
(a) The Annual Letter from the Director to staff focussed on the role all of them play in ensuring that services were managed within budget.
(b) A report to Scrutiny Committee (Social Care and Health) (January 2012) outlined the measures being taken to tackle the overspend.
(c) A report was issued and briefing session held for all Elected Members on the cost pressures faced by the Council and how these were to be tackled.
(d) The Leadership Forum for Social Services Managers, in February, focussed on resource management issues.
(e) Team Manager meetings had 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.
A shortfall of £4,502,000 remained 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 would be undertaken to ensure each was quantifiable, realistic, achievable and time bound. Additionally, it was vital that projects were initiated in time to realise savings when they were due to do so.
The use of the management information being provided to team managers would be a key monitoring tool to ascertain that savings were being achieved and to ensure robust financial management. Processes for reporting and escalating risks and issues would be further developed as the Programme progressed,
As the Programme continued, it would
· 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.
· Develop detailed business cases for specific savings projects where they were high value (in excess of £300,000) were classified as high risk according to the Council's project management toolkit. The business cases and the Programme Plan would be reported regularly to the Programme Board and cabinet for consideration and endorsement.
· In the 2012/13 Audit Plan, allocate over one FTE of audit time to the Directorate, a proportion of which would be used to measure objectively the performance of the Programme.
Councillor Egan thanked the Committee for inviting him to attend.
The Social Services Directorate had to save money whilst at the same time, maintain services to the most vulnerable.
The situation was difficult and would get worse. The chances of the Council receiving large sums of money from Central Government were poor, which meant the task of managing the service would become more and more difficult.
It was important that Cabinet received any comments from the Scrutiny Committee.
Councillor Elmore echoed the above and welcomed any comments the Committee may wish to make.
(1) T H A T Cabinet be recommended to endorse the Programme as outlined in the report.
(2) T H A T Scrutiny Committee continue to receive regular updates on the progress of the Programme in order to be able to exercise proper oversight and scrutiny.
(3) T H A T a detailed business case for specific projects contained within the Programme Plan be prepared.
(4) T H A T 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 recommendations
(1-3) To ensure that Scrutiny Members are aware of the actions being taken to manage the recovery of the 2011/12 overspend and delivery of the corporate savings targets for the next four years.
(4) To establish a clear process for reporting the Programme's progress and ensure a process was in place for the development of specific proposals to address the Directorate's financial position.
Attached as Appendix - Report to Scrutiny Committee (Social Care and Health): 16th July, 2012