To seek the views of the Scrutiny Management Board on the budget proposals for 2024/25.

The board agreed unanimously to scrutinise the directorate delivery plans in the sequence in which they were ordered within the appendices of the report. It was requested that a record of any actions arising would be forwarded to relevant officers ahead of the scheduled meeting on 16 January and any draft recommendations would be recorded for finalisation in that same meeting. 

 

Community Wellbeing Directorate Delivery Plan 2024/25

 

The Corporate Director for Community Wellbeing took the slides as read and gave an overview of the report. It was pointed out that the main point of focus in the budget for next year was the ongoing and increasing demand and complexity in adult social care. This was largely attributed to an ageing population and an increase in the number of individuals falling below the income threshold, who were unable to fund their own care.

 

The Corporate Director for Community Wellbeing specifically outlined a number of areas leading to increased demand pressure in adult social care, including: an ageing population in Herefordshire, inflation/spiralling cost of living, increased complexity of need, market availability and impact of the county hospital.

 

The Corporate Director for Community Wellbeing pointed out and gave an overview of the mitigations that had been put in place and how they were backed up by a series of robustly tested savings. This included the extension of the ‘shared lives scheme’ which would offer more opportunities for people to remain in a home environment for care where possible.

 

The Scrutiny Management Board debated the Community Wellbeing Directorate Delivery Plan 2024/25. The principal points of the discussion are summarised below.

 

1.     The board agreed there was a need to reinstate the local account as a means of communicating to the public how money was being spent on adult social care services, this would also provide details of performance and future plans for the service.

2.     The board highlighted the need for greater promotion and understanding of funding arrangements for adult social care. This would include improved dialogue and engagement with self-funders - especially those opting for high cost residential spaces - explaining how care was funded and what happens when individuals drop below the threshold and fall into the responsibility of the service.

3.     The board raised concerns about a proposed 10% reduction in library opening hours and suggested exploring the voluntary sector as part of the council’s library strategy. The importance of libraries as a safe space facility and point of internet access for young people and families was noted and the need to publicise and raise awareness of the temporary and proposed new location of the city library was highlighted.

4.     The board heard that it was not solely the council that was responsible for supporting the community, and that the service worked with a range of partner organisations, in particular the Integrated Care Board, which itself was looking for more support from the voluntary sector. It was noted that by collectively pooling together funding within partnerships it would be possible to provide holistic support for the community. This was part of the work that was being done going forward and was integrated into the transformation work that was currently being carried out.

5.     The board was given an assurance that public health savings in relation to contracts had been achieved through a procurement exercise. This did not involve cutting support for voluntary organisations, but instead related to savings made through a commissioning exercise regarding a statutory public health nursing contract. A further decommissioning of software that was being used for health checks had also contributed to savings. 

6.     The board discussed and requested clarification on how the all ages money was originally conceived to be used, along with further detail on the mitigated funding relating to all age money and whether it was visible as a separate line in the budget and whether it was recurrent or a one off. The Director of Assurance and Resources suggest recording this as an action to take away, that would inform further discussion in the board’s next meeting on the 16 January 2024.

 

Draft Recommendation: The local account should be reinstated as a means of communicating to the public how money was being spent on adult social care services, this would also provide details of performance and future plans for the service.

 

Draft Recommendation: Greater promotion and understanding of funding arrangements for adult social care should be encouraged. This would include improved dialogue and engagement with self-funders especially those opting for high cost residential spaces.

 

Action: Clarification to be provided at the16 January meeting on how the all ages money was originally conceived to be used, along with further detail on the mitigated funding relating to all age money and whether it was visible as a separate line in the budget and whether it was recurrent or a one off.

 

 

 

 

Children & Young People Directorate Delivery Plan 2024/25

 

The Corporate Director Children and Young People took the slides as read and summarised and introduced the content as detailed below.

 

·       The service was on an improvement journey and there were clear and recognised signs of: improved performance, improving quality of practice and slowly reducing levels of demand.

·       The improvement plan aimed to improve services from a very low base, and reduce and manage demand. A three-year-plan would then deliver a resilient and financially sustainable service.

·       The post-covid era had seen more families in need of support and increasing levels of need for children with special educational needs and/or disability. More children were living in poverty as the spiralling cost of living began to impact families.

·       The service, along with those in neighbouring authorities, was forecasting a very significant overspend for the current year, which was due to demand and other pressures.

·       Although not presented as an excuse for the local overspend, it was stated that all 151 councils with children’s services had overspent on their budgets in 2022.

·       The proposed budget included a significant increase for 2024/25 along with a three-year-plan to return to a reduced budget rate at a sustainable level by 2026/27.

·       Saving proposals for the year were proposed and had been rigorously tested by service leaders and finance colleagues. The service was going into the next financial year in a more certain and steady position than the current one, with a clear trajectory of reducing demand and improving practice.

·       The Leader of the council thanked the board and the task and finish group for its forensic examination of the children’s budget, and expressed the council’s desire to fund a service that was proportionate to Herefordshire’s needs.

 

The Scrutiny Management Board debated the Children and Young People Directorate Delivery plan. The principal points of the discussion are summarised below.

 

1.     A discussion took place around the figure of £11.5 million relating to the ‘2023/24 Forecast Outturn at Q2’ as given on p55 of the document and the ‘Pressures Reported at Q2 2023/24’ figure of £13.5 million as given on p58 of the report. The board sought clarity on the difference between these figures and enquired whether the mitigating actions being in-year would have a sustained effect on those pressures, because otherwise the service was carrying £13.5 million additional service operating costs into the budgeting process.

2.     The board enquired whether the pressures that were being carried into the budget were artificially created, whether they were real and whether there was a £2 million gap somewhere.

o   The Corporate Director Children and Young People stated his belief that the pressures being carried into the budget were not artificially inflated and that there was not a £2 million gap. The budget had been rigorously tested and was subject to robust monthly monitoring.

o   The Director of Assurance and Resources offered to circulate the Q2 report that had gone to Cabinet to provide the board with greater clarity around the mitigations.

o   The Corporate Director Children and Young People stated that there were a raft of current in-year actions and that the staffing profile was very different to how it had been at the end of last year. There were a lot of things being done at the moment that would have an impact, especially in terms of the profile of the workforce that was locum/interim and the shrinking size of the workforce, this would all have a positive impact on reducing pressures next year.

3.     The board questioned whether the 2024-2025 cost savings from social workers migrating from agency to permanent were achievable.

o   The Corporate Director Children and Young People explained that, if, by Q1 the service could convert 30 agency posts into permanent roles, then that would have a cost avoidance, or a saving, during the remaining three quarters of next year of just over £1 million. The service had already converted 10 of those posts before Christmas and had another six starters in the pipeline.

o   The service had worked closely with colleagues in finance and HR to make sure the proposed saving was realistic and it was also based on the trajectory of improving recruitment. The director was confident that by the end of Q1 the service would have converted the equivalent of 30 agency posts to permanent positions and that if some of those posts were higher value positions then this would have a greater impact on savings.

4.     The board queried the recording, on p18, of not delivering required improvements as low risk and medium impact and asked specifically how monitoring was being improved.

o   It was explained by the director that it was recorded as such because the service now had: a tried and tested improvement plan, an established improvement board and an improvement partner, and that all of this was surrounded by confidence from the Department for Education and Ofsted that the service was making improvements. If those elements had not been in place then the risk would have been recorded as being higher.

o   In response to the question on monitoring improvement, the director explained that he and the service heads met and worked closely with their counterparts in the finance team and HR to discuss and monitor high-level budget issues and policy changes, with a view to driving down costs and delivering improvements.

5.     The board noted a greater emphasis on reunifying children with their families and moving them from high cost placements. The board asked, where the allocation of funding for those children and families was located in the budget, and for more information on how they were being supported.

o   The Corporate Director Children and Young People explained that the legal status of the vast majority of children in care was full care order. The service was working with families to try to rescind these care orders where appropriate. A number of these cases had been progressed successfully and there were an additional 15 in the pipeline. Resources had been expanded to increase the number of special guardianship orders, where children return to their families through rescinded care orders or achieve permanence through a special guardianship order so they’re no longer looked after by the council, which was a better outcome for the children.

o   The board heard there were rigorous processes in place to make sure costs placements were managed and that, where appropriate, children were stepped down into better value, lower cost, lower supervision placements. Ideally, going forward, more and more children in council care could have their needs met and their homes provided by family-type placements such as in-house foster care.

o   The service was working with fostering services to increase support available and to increase the number of foster carers over the next two to three years. Some of the investment and shift in finance being recorded was for supporting foster care/foster services and developing services such as the ECHO team and family group conferences. The aim was to try and reduce the number of children coming into care and successfully reunify other families.

o   As part of the budget build for next year the service was looking at where money needs to be allocated and where it would have the most impact and provide best value.

o   In response to a question from the board regarding anticipated reductions in the number of the social workers in the coming year, the director explained that based on an anticipated fall in caseloads and demand in the coming year, the directorate and finance team were confident that they would be able to reduce the social work establishment.

6.     The board voiced concerns that Special Education Needs (SEN) transport costs had spiralled wildly in the previous financial year. The board enquired if the directorate knew what the costs would be in the coming year, given that school placement preferences had already been received from families, and the board asked whether there was adequate mitigation in place to cope with costs.

o   The Corporate Director Children and Young People explained that at both local and national levels there had been a post-covid rise in demand for education health and care plans (EHCPs). As with many other authorities, this had resulted in spiralling costs, especially so with regards to transport arrangements here in Herefordshire. Following covid a number of transport providers and businesses had exited the market, creating a significant reduction in available capacity to transport children to schools. This was exacerbated by a rise in children with EHCPs going outside of the county.

o   The council had engaged in two unsuccessful tenders to try to place new contracts for school runs. The consequent dependence on spot purchasing and taxi contracts had led to the spiralling transport costs being experienced.

o   As mitigation, the council was starting to build robust processes to bring transport services back in-house, such as escorts for taxis, a council minibus and council drivers. The service was increasingly looking to providers from a wider geographical area outside of the county. The service had built in mitigations for next year, it did not expect the market to worsen and believed that through its interventions the situation would being to improve in the coming years.

o   The board heard that through work with its partners in the police and health, the service was looking to develop a number of early help arrangements that would get people the right help at the right time. There was a body of evidence nationally that suggested early help could reduce the referrals into statutory services. This was difficult to evidence this locally, but it was hoped this would prove to be the case here, and would have a positive impact in terms of reducing costs within the service.

7.     The board stated that it was looking for evidence that would give it assurance that, despite the massive overspends in delivery of the last two years, it could have confidence that the budget being put together was realistic, deliverable and robust.

8.     The board remained to be convinced that the plan presented was going to work, by virtue of the fact that it very similar assurances had been provided in previous years. There was particular concern when considering the savings delivery plan which is profiled across four quarters, where the whole year’s service savings are planned for delivery only in the fourth quarter. Concern was expressed that this would make it difficult to monitor and manage any progress toward achieving these savings and improvement earlier in the year.

9.     The board stated it would like to see more credible profiling of what was going to happen to particularly high cost placements, the reduction of the social worker establishment and the SEN transport efficiencies over the four quarters.

10.  The board explained it would like to come back to the directorate in the following week’s meeting, where the medium-term financial strategy would allow the board to look at activity over a longer time period.

 

 

Action: The Director of Assurance and Resources to circulate the Q2 report that had gone to Cabinet, to provide the board with greater clarity around the mitigations relating to pressures reported at Q2 2023/24.

 

Action: Greater clarity to be provided at 16 January meeting in relation to SEN transport costs and mitigations.

 

Action: The board questioned the way saving delivery was being profiled across the quarters and asked that those profiles be revisited at the 16 January meeting to make sure that they reflected what would be a realistic profile for the delivery of those savings, and that the council wasn’t artificially advancing or delaying when those savings were expected, because there was a risk associated with doing this.

 

 

 

 

Economy & Environment Directorate Delivery Plan 2024/25

 

The Corporate Director, Economy and Environment took the report as read and gave a summary and overview of the slide content.

 

·       The Corporate Director pointed out that within the council the Economy and Environment Directorate held the majority of one-off large contracts, including: waste collection, waste disposal, energy costs, transport cost and the public realm contract. Inflationary rises on those contracts had a significant impact on the directorate.

·       The Corporate Director, Economy and Environment highlighted mitigation that was in place to temper the impact of inflation. This included a 3% efficiency programme with Balfour Beatty Living Places (BBLP).

·       The directorate was working on how to shape larger one-off costs of delivery, as an example it was working with BBLP in relation to shaping the Future Operating Model.

·       The director gave an update in relation to the deferred savings on parking charges. This was an increase that had been agreed by council two years ago, but the council had collectively agreed to its implementation for a two year period. It was now due for implementation, and if not, it would create a pressure which would need to be mitigated by savings elsewhere.

·       The Cabinet Member for Transport and Infrastructure highlighted concerns about spiralling costs and increasing pressure on procurement of projects. It was stated that every time a project came up there was something that had not been catered for. Work was being done to address this with the aim to speed up projects to avoid additional inflationary pressures, amid concerns that it might not be possible to get desired savings on big projects.

·       The Cabinet Member for Roads and Regulatory Services explained the directorate was looking at savings going forward, particularly in relation to the most effective way of dealing with highway repairs and working with Balfour Beatty around the Future Operating Model and Annual Plan. It was explained that briefings on the annual plan were being held on 16, 17 and 27 January 2024 and all member were urged to attend these if possible.

·       The Cabinet Member for the Environment discussed the key variances at Q2 around planning and building control and attributed the £1.3 million reduced income to a downturn in the market, a delay in the fee uplift and a delay in the delivery of strategic sites. This was driven by national circumstances and it was hoped it would not be the long term picture.

 

 

The Scrutiny Management Board debated the Economy and Environment Directorate Delivery Plan 2024/25. The principal points of the discussion are summarised below.

 

1.     The board asked about the £450k savings being proposed from the Annual Plan works and if there was information on what services were being proposed to be cut in order to deliver those savings. It was also asked as to what the mechanism of assurance was which ensured that the 3% efficiency was delivered as real efficiencies, rather than cuts in the service delivery within the Balfour Beatty programme.

·       The Corporate Director, Economy and Environment explained that additional detail around the Annual Plan regarding the £450k savings would be provided in the briefings on January 16, 17 and 27.

·       The director gave an assurance that the same 3% efficiencies delivery process had been carried out for a number of years and that the council always explained to Balfour Beatty what the target in the Annual Plan would be and what needed to be delivered. A detailed dialogue had taken place around income generation and the majority of things being looked at focused on income, rather than reducing things. It was recognised that this was not reflected in how the figures were being presented in the budget.

2.     The board remained unclear about the specifics of the BBLP – Revision of Annual Plan works as set out in Ref S2. The director explained that the council was in the middle of conversations with Balfour Beatty and would be happy to present back next meeting.

3.     The board requested that to prevent confusion, when what was being presented was new or additional income, that this be represented in a different way, to show it as income, and not shown as if it were a saving.

4.     The board asked if there was a structural deficit in the way that planning income was overpromised in the budget compared to delivery. The board suggested that the service may have been over-targeted in terms of delivering income from this area and that this concern was supported by the way they had under delivered against income targets in previous years. It was asked what assurance there was that income would be delivered in the coming year, when targets have repeatedly been missed. Where was the pipeline of commitments and dialogues with developers to justify the figures for 2024?

·       The Corporate Director Economy and Environment explained that there had been a delay at government level in implementing some of the increases that had been expected in planning fees. An income target of around £300,000 had been set for the year and that couldn't be achieved because the government didn't increase the fees until December of 2023. The new fees were now in place and would increase the income generated next year.

·       Understanding the income for planning had been a challenge for a number of years due to the market, but colleagues from planning had helped in identifying the challenges facing the county in terms of phosphates and what that meant in terms of the large planning applications coming forward.

·       The Corporate Director Economy and Environment stated that with regards to the applications pipeline, the team had recently restarted regular meetings with agents, which had ceased a couple of years ago. This had started a positive conversation with planning agents to think about which applications were coming forward, what was holding back any of those applications and to start to plan when they would be coming in and what support could be provided.

·       The pre-application advice service had been reinvigorated to ensure that the team could deal with details in advance of an application coming,

·       It was also stated that the directorate was in In the middle of a detailed transformation program which included a proposal to invest over £1million in the planning software systems. It was hoped that this would enable faster handling of applications and would consequently increase fee income.

·       The whole package around planning in terms of the transformation programme, the investment in the IT system and review of how pre-applications were handled, would hopefully provide assurance in terms of the income from the service.

 

5.     Regarding the potential for a structural deficit in terms of planning income, the board asked if evidence could be provided for the next meeting to demonstrate and justify the income target that was set for planning.

6.     The board asked how the net income from car parking was linked to the service delivery it paid for in-year across the directorate, and across the Balfour Beatty Living Places contract. It was also asked how that income and service spend was tracked and controlled in-year to make sure that service costs did not exceed the delivery of net income.

·       The board heard from the director that parking was one of the biggest income generators for the directorate and that regular conversations were held within the service to ensure targets were being monitored. The service had seen different use in timings of car parks across the city and was keeping that under review as to how that impacted income and if changes needed to be made.

7.     The board reminded the Corporate Director Economy and Environment of recommendations made at the board’s November meeting regarding looking at income and charging around parking. A request had been made around information provided for the budget - using car parking as an example - to demonstrate how the council was making sure that net income was funding various in-year services, and that it wasn’t either overspending on services compared to the income being delivered by parking or retaining income that was being been generated, and therefore make a profit.

8.     The board sought information that provided assurance that the council not only understood where that connectivity was but could also demonstrate there was a mechanism by which it managed in-year services dynamically, so that it didn’t overspend on car park revenue supported services or use car park income to offset overspending on non-qualifying services.

9.     The board suggested that the services delivered by Economy and Environment were those which the majority of the county’s households received and recognised. Concerns were raised that the proposed allocated budgetary increase for the directorate was only 2.5%, compared to budget increases planned for the other directorates within the council. It was asked if services would suffer as a consequence.

10.  The board asked if there had been any analysis of what impact the relatively small 2.5% budgetary increase would have across the directorate, especially in relation to the £340k for deleting vacant posts not currently occupied.

·       Regarding the vacancies, the Corporate Director Economy and Waste explained that the posts being deleted had been vacant for some time and that it was fair to assume that removing them would be not present a risk or add pressure to the service. Analysis was being carried out on scenarios where there was full-time equivalent funding for roles that were only part-time filled, such as school travel assistants.

·       The director stated that the budget covered everything the directorate needed to do next year and assurance was given that services to residents would remain unchanged.

·       The Corporate Director Economy and Environment stated that they always worked within the budget that had been allocated and understood pressures across the organisation. The energy savings proposed were based around knowledge of projected fees and charges of what the costs for energy would be, and the directorate was comfortable with this. It was pointed out there was a need to be realistic in terms of what happened if costs went up next year and this would be built into the budget process for next time around.

·       The board was given assurance by the director that deleted vacancies referred to in the budget were not being taken from planning services and enforcement.

11.  The board asked the Corporate Director Economy and Environment if they were confident that the £800k proposed saving from waste management transformation and £580k from a reduction in energy costs was achievable.

·       The Corporate Director Economy and Waste explained that there had been a detailed analysis of the waste budget. The directorate had engaged in a detailed discussion with bidders about what could be delivered within the available budget envelope. The directorate was confident that it could deliver services within the set budget.

12.  The board noted there was a perception among some, that environment was the ‘small e’ within the directorate. It was asked what commitments to reducing CO?emissions were in place, had there been any analysis of how much money was being committed to the environment side of things rather than the economy and was the directorate satisfied from the budget that the environmental commitments the council had made at a strategic level could be met.

·       The Cabinet Member for the Environment explained that the council had to resource and deliver on statutory obligations and that the carbon reduction activity was an intrinsic piece of long-term work. There was an ‘invisibility’ about environmental work, as it appeared and ran through most areas of the council’s work - this made quantifying how much money was being spent on it difficult. It was stated that more resource to achieve environmental strategies would always be welcome, but as with other areas within the council, there was a requirement to work within the budgetary envelope.

13.  The board heard that the ‘Scoot Highways System’ at Ref S9 was no longer being used and had not been used for some years. The system had been replaced by traffic sensors and its removal had not and would not impact highways or congestion.

14.  In a response to a question regarding Ref S8 in the slides, the board heard that £250k coming from transfer of functions from Local Enterprise Partnership (LEP) was a transfer of budgets from LEP to the council. The associated funding would come with it and a joint committee would oversee the transfer of those functions.

 

Action: The board requested an update for the 16 January meeting on a recommendation made at the board’s November 2023 meeting regarding income and charging around parking.

 

Action: Regarding the potential for a structural deficit in terms of planning income, the board asked if evidence could be provided for the 16 January meeting to demonstrate and justify the income target that was set for planning.

 

Action: The board remained unclear about the specifics of the BBLP – Revision of Annual Plan works as set out in Ref S2 and requested additional detail on this be made available for the 16 January meeting

 

Action: The board requested that, to avoid confusion, when what was being presented was new or additional income, this should be represented in a way that shows it as income, and not as if it were a saving.

 

 

Corporate Services Directorate Delivery Plan 2024/25

 

Due to time constraints, the board agreed unanimously to defer this section of the item until the meeting of 16 January 2024.