Agenda item

2021/22 budget setting

To seek the views of the adults and wellbeing scrutiny committee on the budget proposals for 2021/22 as they relate to the remit of the committee.


The chairperson explained that the three scrutiny committees were reviewing the budget proposals in sequence and this agenda item sought views on the budget proposals for 2021/22 as they related to the remit of this committee.


The cabinet member - health and wellbeing reported that, due to a recent High Court judgement regarding the treatment of benefit income in social care charging policies and its impact for severely disabled people, £330k of the £520k proposed savings for ‘Implementing changes to client charging policy and income disregards’ was at risk.  As a consequence, the proposed policy changes would be put on hold and a further review of charging policy for 2021/22 would be undertaken once the Department of Health and Social Care (DHSC) position on the judgement was known.  The committee was advised that the adults and communities directorate was working on alternative savings proposals.


An updated appendix to the report, Appendix A ‘savings proposals’, had been circulated before the meeting and this was displayed.


The chief finance officer drew attention to: the proposed council tax increase of 4.99%, inclusive of a 3% adult social care precept; the lower council tax base, largely due to pressures that were coming through from the Covid-19 pandemic; and made reference to a supplementary paper on Covid-19 related grants to be received by the general scrutiny committee on 15 January 2021.


The director for adults and communities provided an update on existing capital investment schemes, including Hillside, super hubs, and technology enabled communities.  The savings proposals for 2021/22, as shown in Appendix A, were summarised:


·           Modernising assessment, commissioning and services delivery for learning disability clients (£1.5m)

The assistant director all ages commissioning added that strengths based and technology driven approaches would be utilised to deliver better outcomes and reduce expenditure.

·           Targeted review of complex cases followed by system challenge (£1.25m)

The assistant director for adult social care operations added that a key driver was developing Herefordshire services, thereby minimising out of area placements.

·           Implementing changes to client charging policy and income disregards

It was reiterated that £330k of the £520k proposed savings was at risk and alternative savings proposals were being prepared.

The director for adults and communities said that the proposals had been developed in the context of the principles of equity and fairness, the need for culture and practice change, and would build upon the strengths based model.

The chairperson acknowledged the extraordinary times, pressures and unknowns which made forecasting difficult in both financial and service delivery terms.  It was noted that the strengths based approach was about working smarter and doing more with less.  In response to questions, the head of corporate finance provided an overview of the ‘adult social care precept explanation’ slide, as included in the updated appendix, and the chief finance officer commented on the impact of the precept on the overall financial position of the council.  The chairperson recommended that a plain English narrative on the precept be prepared in order to aid public understanding.  In response to further questions: the chief finance officer commented on the increase in council tax reduction claimants and on the economic outlook, adding that the council was proposing a range of mechanisms to support households in financial difficulty; and the assistant director all ages commissioning provided examples of the modernisation of learning disability services, including the review of care plans for people with complex care and learning disability needs, and recommissioning options for respite and day opportunity services.  The chair noted that the committee’s work programme included scrutiny activity on the system response to Covid-19 and on learning disability services.

The vice-chairperson supported the preparation of a plain English narrative on the precept and commented on the need for further clarifications in terms of: the council tax base (report paragraph 6), including the overall figure in terms of the council tax base decline for 2021/22 as this was significant, for instance this would have an effect on the precepts of the market towns; the money expected from central government (paragraph 7), including any further movement in supporting local government to manage the pressures in response to Covid-19; how the measures identified in the Market Position Statement might help to address budget pressures (paragraph 8); and the level of public health grant (paragraph 10).  Noting that ‘access to health funding (NHS Continuing Healthcare and joint funding)’ was included in the adults and communities risk register, the vice-chairperson emphasised the importance of maximising income from all sources.

Later in the meeting, the chief finance officer explained that the settlement provided by government was still draft, with the precise budget for public health expected to be confirmed during the following week, and there were ongoing conversations with government departments about the financial pressures resulting from Covid-19.  It was noted that the reduction in council tax base was unusual and it was acknowledged that the situation needed to be described better.

Questions and comments were invited from committee members, the principal points of the discussion included:

i.           The increasing use of food banks was an indicator of worsening income levels.

ii.         A committee member said that the need for a precept and the need for significant savings to be delivered had to be communicated clearly.  It was commented that the adults and communities directorate had a profound role in the lives of vulnerable people, and it was essential to understand how different proposals would affect service users.  It was noted that the identified challenge of ‘pace and scale of change across the system’ also applied to service users, both in terms of adapting to change and in adjusting their personal finances.  It was suggested that services users should be provided with as much notice as possible and consideration should be given to increasing charges in a stepped or staged way.

In response, the director for adults and communities said that there was a lead in time for engagement and consultation to allow people to prepare for the changes but the savings proposals involved binary decisions and the sooner that the changes were made then the sooner the efficiencies for the council could be met.  The director also commented that: the directorate was focussed on high quality practices and outcomes for its customers; there were areas for improvement in the county, including employment levels for people with learning disabilities; and there was a need for conversations with customers and with the providers of care to manage the transition and provide a better offer.

iii.        A committee member commented on the challenges posed by the annual local government finance settlement, the vulnerabilities to economic change and the erosion of the council tax base.  It was noted that the cessation of the furlough scheme could be significant for many households and it was suggested that additional modelling be undertaken to explore the consequential impacts.   It was questioned how the Talk Community programme might be affected.  It was also questioned what was being done to address the potential impact of the pandemic on the mental health of young people.

The director for adults and communities commented on the role of existing communities in the success of the strengths based model and it was essential that the right investments were made, such as in integrated community hubs.  It was reported that: thirteen Talk Community hubs had been established and it had been the intention to increase this to twenty by the end of the year but this would be a struggle due to Covid-19; there was an arrangement with hvoss (Herefordshire Voluntary Organisations Support Service) to recruit and develop volunteers; profiling had been undertaken to help communities to understand and respond to local needs; and a formal engagement process was to be undertaken with communities to push the Talk Community agenda further.

The assistant director for adult social care operations noted the pressures on mental health services and commented on work being undertaken with Herefordshire and Worcestershire Clinical Commissioning Group and Herefordshire and Worcestershire Health and Care NHS Trust; it was noted that a team had been established recently to support people with personality disorder.

The assistant director all ages commissioning said that the strategic approach to commissioning took the wider economy and workforce into account, and the council was working with care providers to recruit from the potential available workforce, including from the retail and hospitality sectors.

The chief finance officer outlined proposals from government to smooth the impact of reduced income sources over a number of years and specific funding streams to address under collected council tax, adding that further details of the schemes were awaited.  He also outlined bad debt provision, the challenges associated with trying to estimate the impact of the pandemic and economic recession, the modelling undertaken to date, and the risks around the cessation of business rates relief.

iv.        The head of prevention and support provided further details of the recent High Court judgement and gave an overview of the alternative savings proposals that were being developed.  These included applying the state retirement income increase of 2.5% from April 2021 and an intensive programme of reviews to be undertaken by the financial assessment team in terms of nil charge payers, disability related expenditure, and occupational pension income.  The welfare and financial assessment team manager added that the savings proposals were based on the assumption that the allowances used in financial assessments, as set by the DHSC, would remain frozen in 2021/22.

The chairperson noted that this was an unexpected development and questioned whether any work had been done to assess and mitigate any impacts on service users.  The director for adults and communities advised that work on the full equality impact assessments, as with the other savings proposals, had not yet been undertaken.  He added that the directorate endeavoured to work at maximum efficiency, utilised officer networks to develop and present initiatives, and looked for the best ways to support its customers.  However, social care was not free at the point of delivery and was means tested.

The vice-chairperson noted that the nature of this work was ongoing and that it may need to feature as part of the committee’s work programme going forward.

The comments of the attending cabinet members are summarised below:

§    The Leader of the Council said that: the questions from the committee were welcomed; the potential economic impact of the furlough scheme being withdrawn was a national issue but the county needed to ensure that it received a fair share of any support measures; the work of officers was appreciated, including the positive developments in terms of Talk Community and in the necessary maximisation of income to help the whole community through these difficult times; and it was encouraging that 45% of people responding to the budget consultation thought that the proposed council tax and social care precept increase of 4.99% was about right.

§    The cabinet member - health and adult wellbeing said that: any increase in council tax was difficult many people but the council had to provide services to meet the needs of its residents; the increase of 4.99% represented an increase of £1.51 per week for a band D equivalent property and was necessary, particularly to support elderly and vulnerable people; and the directorate was thanked for its hard work.

Later in the meeting, the vice-chairperson suggested that such points should be made clear in the messaging around the increase.

§    The cabinet member – finance and corporate services said that: the comments of committee members had been insightful; officers in the finance and directorate teams had thought deeply about where the pressures were coming from and the transformational change that was necessary to make savings whilst continuing to meet the council’s statutory responsibilities and the increasing demand for services; and close cooperation across the council was essential in order to respond to demographic pressures, to the pandemic and to other unexpected challenges, such as flooding incidents.

In response to a question from the chairperson about the identified support for a Herefordshire Community Lottery in the local consultation, the attending cabinet members commented that: interesting feedback had been received from the local consultation and from the online public consultation; best efforts had been made with the consultation given current social distancing measures; a lottery could involve an element of public choice in the elements to be supported; any lottery should not have a disproportionate impact on individuals with lower incomes; and time would be taken to develop any related scheme.

Further to a comment made by a committee member about the positive contributions being made by local people, the chairperson said that it was fortunate that the county had such a depth of voluntary service and paid tribute to the efforts being made by members of the public to support vulnerable people within their communities.

The committee discussed draft recommendations and agreed the following resolution.

Resolved to recommend to the General scrutiny committee:

The adults and wellbeing scrutiny committee recognises the extraordinary pressures for the council, and for the adults and communities directorate in particular, and acknowledges the significant work that has been undertaken and is ongoing in preparing the budget for 2021/22.

The committee recommends that:

1.       A plain English narrative be prepared to explain the adult social care precept.

2.       Clarifications be provided in subsequent budget meetings in terms of the reductions in the council tax base (paragraph 6), the money expected from central government (paragraph 7), how the measures identified in the Market Position Statement might help to address budget pressures (paragraph 8), and the level of public health grant (paragraph 10).

3.       That the operational changes and proposals in terms of Learning Disability services, including the impacts on service users, be presented to the committee at the May 2021 meeting.

4.       That opportunities be considered to inform service users about charging changes in advance and to stage increases incrementally.

5.       That details of the alternative savings proposals for £330k be circulated to councillors as soon as possible, with a report presented to a future meeting of the committee.

6.       That consideration be given to additional modelling around potential economic scenarios, including the cessation of the furlough scheme, and the consequential impacts such as the erosion of the council tax base, reduction in other income streams, and on the delivery of services.

Supporting documents: