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Agenda Item No. 7










The Operational Manager for Accountancy, in presenting the report, advised that the initial revenue budget proposals for 2018/19 were submitted to the Committee for consideration together with the amended original budget for 2017/18 for services that formed part of the Committee’s remit.


The Council’s budget was determined largely by the Revenue Support Grant (RSG) settlement set by the Welsh Government (WG). The provisional RSG settlement was received from WG on 10th October, 2017.  The final settlement was likely to be received in December 2017.


Appendix 1 to the report set out the Amended Budget for 2017/18 for the Committee, together with the necessary adjustments to be made to the original budget.


The Council was required under statute to fix the level of Council Tax for 2018/19 by 11th March, 2018 and in order to do so, would have to agree a balanced revenue budget by the same date.  To be in a position to meet the statutory deadlines and the requirements for consultation set out in the Council’s Constitution, much of the work on quantifying the resource requirements of individual services needed to be carried out before the final RSG settlement was notified to the Council.


The forecast for Social Services at year end was a potential overspend of around £1m due to pressure on the Community Care budget.


Children and Young People Services – The major issue concerning this service was the pressure on the children’s placements budget given the complexities of the children currently being supported.  Work continued to ensure that children were placed in the most appropriate and cost effective placements.  However, it should be noted that due to the potential high cost of each placement, the outturn position could fluctuate with a change in the number of Looked After Children and / or the complexity of need.  This budget would be closely monitored during the year.


Adult Services – The major issue concerning this service was the continuing pressure relating to the Community Care Packages budget and it was currently projected that there could be an overspend this year of around £1m.  At this stage of the year, the outturn position was difficult to predict with any certainty.  This budget was extremely volatile and was under pressure from significant demographic growth, an increase in the complexity of cases, as well as pressure from care providers to increase fees as a result of the National Living Wage.  An increase of 1.5% above the 1% inflation provided in the budget would be paid to residential and nursing home providers.  Additional funding had recently been announced by WG through the Social Care Workforce Grant which totalled £30m across Wales and had provided additional funding of £704k to the Council.  This funding had been used to increase the fees paid to domiciliary care providers above the 1% provided within the budget.  This additional money from WG was not sufficient to fund any growth either in number or size of care packages, it was entirely used to meet the increasing costs of domiciliary care provided by the private sector.  The Community Care Packages budget would also need to achieve savings of £200k in the year.  The service however, continued to strive to manage growing demand.  It had an excellent track record in this area however this was becoming increasingly difficult to contain.  Further savings initiatives would be considered which may be funded via regional grants.  WG had continued to provide Intermediate Care Fund (ICF) grant to Cardiff and Vale University Health Board to allow collaborative working between Health and Cardiff and the Vale Councils however the level of grant funding was not guaranteed on an ongoing basis.


It was proposed that up to £1m be used this year from the Social Services Legislative Changes fund to cover the shortfall.  Cabinet would be provided with further details during the course of the year.


Leisure – There was currently an adverse variance to the profiled budget.  The main reason was due to high costs for vehicles during the summer season.  It was anticipated that this would reduce over the winter months and therefore it was currently projected that the overall budget would outturn on target.


Savings 2017/18


As part of the Final Revenue Budget Proposals for 2017/18, a savings target of £335k had been set for the Committee.  Attached at Appendix 2 to the report was a statement detailing each savings target with an update of progress.


With regard to the Social Services savings targets which related to the Care Package Budget reductions, while there was significant pressure on this budget and it was anticipated to overspend, schemes had been put in place to deliver savings in this area by transferring domiciliary care clients to direct payments and by establishing a review team and therefore the saving was projected to be achieved in full.


Medium Term Financial Plan


The Medium Term Financial Plan (MTFP) 2017/18 to 2020/21 was presented to Cabinet on 18th September, 2017 (minute no. C74).


It assumed a reduction in WG funding of 3% for the years 2018/19, 2019/20 and 2020/21.  This resulted in the requirement to find savings of £20.941m over this period, with £9.326m currently having been identified.  There were therefore further savings to be identified of £11.615m over the three year period.


The latest Plan factored in a managed level of cost pressures, a notional increase in Council Tax of 2.6% each year, price inflation of 0.5% and annual pay awards of 1.6% each year from 2018/19.


Provisional Settlement 2018/19


The Council's provisional settlement was announced by WG on 10th October, 2017.


WG had advised the Council that its provisional Standard Spending Assessment (SSA) for 2018/19 was £221.296m.  SSA represented WG's view of the relative resources needed to provide a standard level of service in each Local Authority in Wales and its primary use was to allocate RSG to these Authorities.


2018/19 Initial Budget Proposals


As part of these initial proposals, it had been necessary to revisit the cost pressures facing services in order to build up a complete and up to date picture of the financial position and an updated list for the Committee was shown in Appendix 3 to the report.  These were not shown in any order of priority.


Details of the proposed areas for savings for 2018/19 to 2019/20 for the Committee were attached at Appendix 4 to the report.  The savings did not include the cost of any potential redundancies.  Further work was ongoing to identify future projects that would realise savings for the Council.


A summary of the overall base budget for 2018/19 for the Committee was attached at Appendix 5 to the report. 


Further work would be undertaken by the Budget Working Group (BWG) in order to achieve a balanced budget for the final budget proposals for 2018/19.  This would include a review of the use of reserves, a possible increase in Council Tax, a review of all cost pressures, possible changes to the approved saving targets, a review of the inflation assumptions and the current financial strategies.


The BWG would consider the results of the budget engagement process in determining priorities for future savings and service delivery.


Appendix 6 to the report set out the actual reserves as at 31st March, 2017 for the Committee and showed the estimated reserves balance for each year up to 31st March, 2021.


Members raised concern regarding the level of cost pressures with some noting that a significant increase in Council Tax may be required to deal with the pressures.  Although there appeared to be significant reserves listed, the Operational Manager advised that if they were used, they could only be used for one off situations and could not be used year on year. 


In recognising that it was difficult to streamline further, Members asked whether further pressure should be placed on WG in view of the requirements under the Wellbeing Act.  The Cabinet Member, with permission to speak, advised that representations had already been made to WG and all Councils were facing similar pressures.  He stated that he had also been disappointed that there had been no further funding in the UK budget to help Welsh Councils.  Following a query as to whether the Health Board could be encouraged to assist the process, the Cabinet Member referred to the difficulties also being faced by the Health Board.


In recognising that a significant part of the overspend was around commissioning care it was noted that it was difficult for the department as it had  statutory responsibilities to assess and meet people’s needs, as not meeting their needs could have significant dire consequences.  The Director also advised that although savings were increasingly difficult to find, the department was committed to try to find as many savings as possible and would also look to considering new models of care where it would be safe and prudent to do so.  Good practice was also taken into account and the Association of Directors of Social Services Cymru offered support where possible.  Officers regularly engaged with other Local Authorities and providers and also utilised their own personal networks, in order to be innovative with their approaches.  The Vale had also been recognised for its innovative approach in a number of areas such as outcome based commissioning.


A Member queried whether there would be an opportunity for a number of organisations and professionals to have a wide debate on the subject in order to put forward suggestions, recognising there were considerable complex care cases involved.


Following the response to the Chairman’s question as to whether the savings identified were achievable, the Director advised that in his view they were achievable but it would be difficult, with Members accepting that there was a £1m overspend for Adult Services and the budget was extremely volatile. The budget was also under pressure from significant demographic growth and an increase in the complexity of cases as well as pressure from care providers to increase fees as a result of the National Living Wage.  Although understanding that the department was considering every aspect and that it had the Committee’s support, the Chairman felt that the significant complex cases and the issues facing the department needed to be raised throughout the Council in order that all Council Members could recognise the issues the department was facing, following which it was subsequently




(1)       T H A T the amended revenue budget for 2017/18 as set out in Appendix 1 to the report be noted.


(2)       T H A T the comments of the Scrutiny Committee be referred to the Corporate Performance and Resources Scrutiny Committee highlighting the issues facing the Department in reference to the £1m overspend for Adult Services with the request that the Corporate Performance and Resources Scrutiny Committee consider the matter with a degree of urgency.


Reasons for recommendations


(1)       To advise Committee of amendments to the 2017/18 budget.


(2)       To advise Corporate Performance and Resources Scrutiny Committee as the lead Scrutiny Committee of the issues facing the Social Services Directorate in particular with regard to the £1m overspend on Adult Services forecast.”