Agenda item
Budget monitoring (Hackney Education & Children's Social Care) (20.05)
To review in year budgets for children’s social care and education services for 2022/23 (month 7, October 2023).
Minutes:
5.1 Budget monitoring is a key area of the scrutiny function, in which the Commission reviews: In-year budgets; Management actions to address overspends/ underspends; Progress against agreed savings proposals. Historically, the Commission has taken separate budget monitoring reports for both Hackney Education and Children’s Social Care. Given the greater alignment of these services, the Commission has agreed to take a unified budget monitoring report, so that there is single oversight of all children’s budgets within the council.
Introduction from Corporate Finance Officers
5.2 The following issues were highlighted by officers in relation to the budget monitoring paper presented to the Commission for the financial position of children and education services to the end of October 2023:
§ After the application of reserves (£3.6m), this directorate was expected to be overspent by £3.8m;
§ The majority of this overspend is linked to corporate parenting (£2.7m) in relation to pressures in placement costs.
§ Other areas of overspend were in Access and Assessment, Safeguarding and QA and LAC.
§ In Hackney Education an overspend of £4.3m is forecast, mainly as a result of ongoing cost pressures in SEND provision. The cumulative overspend for SPEND will be around £21m by the end of 2023/24.
§ Early Years is anticipated to be overspent by £660k as a result of lower than anticipated income arising through the pandemic and changing patterns of children centre usage.
§ OBIS directorate is expected to break even after the application of reserves.
Questions from the Commission
5.3What impact has high levels of inflation had across the service? Are there any indicators that these inflationary pressures were receding?
§ (HoF) Inflationary pressures were experienced across the service, but particularly within the Commissioning budget, as providers were increasing the cost of services that they provide to the council. This was the case for commissioned services across both children’s social care and SEND services. Rising inflation had specifically impacted on fuel costs which has had a significant impact on the SEND transport budget. As contracts come up for renewal, providers were making the case for increased funding to offset inflationary pressures in relation to staffing, energy and other rising costs.
5.4 Can officers provide further detail around the cost pressures in the corporate parenting team (currently a projected £4m overspend)? What management actions are being taken to address this and are they effective, given that overspend in this area appears to be intensifying / increasing? How can fewer looked after children (as noted in the previous report) be reconciled with rising costs for corporate parenting?
§ (DCSC) It was noted that corporate parenting costs were increasing as residential placements were in high demand and local authorities were in effect, competing for these places. Safe and therapeutic placements were in short supply and in many cases these were expensive and not local. In terms of management actions, the 20 highest costing placements were under direct oversight by the DCSC to ensure that children were being placed appropriately in terms of care needs and costs. Some of the child-staff support ratios were as high as 4 to 1, so these were expensive placements. Challenge was provided to make sure that these ratios were appropriate to the need of the child. Such arrangements were regularly reviewed to ascertain if care levels were correct, and if there was potential to step down the staff-child ratio of support.
5.5 Following on from above, the Chair asked what do we know about the care providers for these residential settings? Were all staff trained to provide therapeutic support? Is Hackney looking for specific assurances around what it is paying for in the model of care and support provided? In reality, if there is a 4-1 ratio, these are not social workers, but mostly likely security and other staff? What does an affordable safe and therapeutic intervention look like?
§ (DCSC) officers suggested that this was not the case, but acknowledged that the authority was paying for children (often with complex needs) to be safe and well cared for in an environment which is friendly and homely. The Director was consistently seeking assurance that commissioned services were providing what was being paid for. If children were not receiving the care that is required then they would be moved. Many local authorities struggle with this issue, as there was simply not the capacity in residential care to take all those children in need. There needed to be much greater control from central government to manage these settings to ensure that there are sufficient numbers of quality settings which have appropriate capacity at a reasonable cost.
§ (DoE) Similar issues were experienced in supporting children with SEND, where children have equally complex needs and who need high levels of care and support.
5.6 Members of the Commission noted that it would be really helpful to have a better understanding as to what these residential settings looked like, to understand what is being provided for Hackney children in their care. Visits are clearly impracticable and not appropriate for the Commission, but it would be helpful for members to have further written information about the provider and what support is offered to children.
§ (DCSC) Visits were undertaken by social care staff as they have to quality assure what is provided and this is done for all children wherever they are placed. All of these settings are regulated by Ofsted. There are settings which are not regulated by Ofsted, and this is not where the authority would want to place any children, but sometimes we do not have a choice. Sometimes unregistered providers who the authority may place children with indicate that they will register with Ofsted, but clearly, this takes some time and children are often moved by the time that they are registered. All of these homes can be very different, sometimes just a single home offering a placement for one child.
Following up this point, the Chair indicated that given the amount of expenditure that is being spent on these residential settings and the pressures that this is creating in other areas of the budget, members needed a much clearer understanding of what was being provided and the associated costs involved. Whilst the Commission is confident that officers are undertaking visits and making these assessments, members did need a better understanding of these residential care providers which are accounting for much of the budget spend.
5.7 What more can be done on a pan London basis, or indeed, in physical development here in Hackney itself? Neighbouring authorities are facing the same pressures, what can be done to work with these authorities to develop more localised and cost effective solutions?
§ (DCSC) Hackney was working within the NE London Consortium and across London as all local authorities are facing the same challenges. There are a couple of authorities which are building their own children’s homes, which of course could benefit all of London authorities as we could place children there. This is also on the national agenda and more effective market provision was raised with the DfE inspector at a recent informal visit. At the moment providers had authorities ‘over a barrel’ given the limited capacity and increased demand for services.
§ (DoE) This is a common issue across children’s social care, education and SEND, and it may be that a deep dive by the Commission into this may be particularly helpful.
§ (DoF) Reported that discussions had recently commenced in terms of identifying properties which could be used to deliver children’s social care services. This was at an early stage, but the Corporate Director of Finance was keen to explore options in this space and it was hoped that progress could be achieved in 2024.
The Chair and the rest of the Commission greatly welcomed this new development.
5.8 The report noted that future funding for OBIS beyond this financial year needs to be identified from existing children and education budgets. Can officers set out if OBIS will continue to operate from April 2024 and the level of funding needed to support this Directorate. Where will funding come from if this service is to continue?
§ (DCSC) It was noted that the Director of Obis was not present and officers did not feel comfortable answering this question, but more information could be provided
Agreed: That further information on the future funding of OBIS beyond 2023/24 would be provided to the Commission.
5.9 Some services which are provided are undoubtedly an investment, delivering savings elsewhere for the council. Is there any evidence that some of the services listed here in this budget monitoring are clear, invest to save priorities? For example, Young Hackney and the social dividend that comes from this work?
§ (DCSC) There have been some very positive outcomes from the work of Young Hackney, but there has to be very careful thoughts about the future model for delivery of this service. YH has been a highly respected and valued service for the past 10 years, but it is time to reflect and review its approach.
5.10 Family Interventions and Support Service (FISS) is forecasting an overspend of £1.445m at year end, which is equivalent to 20% of the budget allocation for this service. Can officers explain what factors are driving this overspend in FISS? What actions are being taken to address this and what evidence is there that they are having an impact?
§ (DCSC) This cost pressure mainly related to staffing in this area of the service as there has been a significant problem in recruiting permanent members of staff. As a consequence, the service has had to recruit an increasing number of agency staff to support the service which is more expensive. Given the size and evolving needs of the service, there was unlikely to be a situation where the authority would never need agency staff, but clearly, the service would prefer more permanent members of staff. There is recruitment and retention strategy which it is hoped would reduce reliance on agency staff and reduce associated costs. A management restructure will also take place which will help to reduce costs in this area of spend.
5.11 There is a £943k cost pressure for Looked After Children and Leaving Care Services. Can officers set out what are the key service pressures which are contributing to this overspend? Are the factors behind this overspend - short-term pressures or longer term issues (e.g. housing related)? What management actions are being taken to address the cost pressures in this budget?
§ (DCSC) Again, this overspend is primarily connected to social care providers which are commissioned by the authority. Similar to the above, there was also a high level of agency staff use in this service area which was contributing to the budget pressures.
5.12 The council has a great apprenticeship programme and members of the Commission enquired whether there were opportunities to train and develop home grown talent which can support the wider children’s social care functions (for example, family intervention and support workers)?
§ (DCSC) Apprenticeships are very positive, but eventually all these recruits in social care / social work will be required to go on study for their ASW training course (for qualified status). Greater connections to universities and those other settings training our staff would help to develop recruitment pathways to Hackney. Last year there were 3 apprentices for social work in Hackney in 2022, but this year there are just 1.
5.13 As was noted in last year's budget monitoring report, there continues to be a significant underspend (£152k) in the clinical services budget. Noting from the previous report the significant increase in referrals for clinical services (32% increase) how is the service underspent? Are there long waiting lists for this service? Is activity at expected levels?
§ (DCSC) This service is dependent upon highly skilled specialised staff and it has been difficult to recruit to these posts which has created an underspend in the service. This service works closely with CAMHS Alliance where children (on a Children in Need Plan or a Child Protection Plan) can be directly referred into the Clinical Service rather than wait for CAMHS support. Many of the users of this service indicate that the approach of CAMHS is much ‘softer’ than the CAMHS approach, where for example, cases might be closed if there is a DNA. The service had also lost personnel to a neighbouring authority which was paying more than Hackney.
5.14 Can officers explain what the £394k virement to the Domestic Abuse Intervention Service was? Is this purely relating to service demand? Is this a one-off budget alteration?
§ (HoF) A number of factors contributed to this figure. Some of the contributions from partners were lower than expected which has led to this position.
5.15 The report notes that £500k of staff savings from a staffing restructure within children’s social care is expected for 2023/24 and 2024/25. Are savings on-track to be delivered for this year? Will any restructures coincide with expected Ofsted inspections?
§ (DCSC) This was an internal management restructure and it was hoped to be on target for this year. The LGA was very clear that the children's social care service needed to streamline its management of the service, and therefore a delayering exercise was planned. The savings are required for this year, and this cannot be delayed any further to wait for Ofsted inspection to occur. The service is conscious of morale and is therefore taking a tiered approach to the restructure. Informal consultations have started with affected staff and there had been positive feedback, but this would be an open process with ongoing dialogue with affected staff. It was also noted that there were a significant number of agency staff within these affected positions which needed to be provided with notice of any proposed staffing changes.
5.16 Can officers provide further detail on the £650k of savings which have been identified for this year in the targeted and specialist interventions for young people that need extra support? What services does this affect and which cohorts of young people does this impact upon?
§ (HoF) This was a second part of a base budget review of services where £350k was earmarked for 2022/23 and £650k for 2023/24. Some of the measures included in this cost savings included the Prospects contract, the deletion of an Assistant Head of Service post and aligning business support across Young Hackney and family support service. Some of these savings had been delivered, and if there was a shortfall at the end of the year, a mixture of grant funding or other one-off measures will meet that gap. Next year, services will be reviewed and delivered in the base budget.
5.17 A vacancy rate saving of £900k is set for children’s social care services. Will this be achieved? What assessments have been made as to the impact that this may have on services?
§ There is a council wide vacancy factor of 3.5% which is applied to all directorates. This equates to £1.7m across both children and education services. This is reviewed on a ¼ basis, and if the staffing quota is full and the vacancy rate saving looks unlikely to be achieved, then budget holders are encouraged to look to non-staff budgets to achieve the savings. At period 7, there was an acceptance that this would be achieved. It was also noted that some front line services were difficult to hold vacancies, and there would be exemptions here.
5.18 The report notes that all savings are on track to be delivered by April 2024 - yet the report has these marked as ‘amber’ in RAG rating. What risks are associated with these?
§ In terms of the £250k for commissioning marked as amber, as the directorate has taken on a commissioning specialist in a consultancy role to identify how some of the commissioning functions might work together more closely and achieve savings. £90m is spent on commissioning services therefore this £250k has been invested to see how these services can be more aligned across health, education and social care. It is marked amber because this is reviewed at ¼ points, but it is expected to be delivered but if not there will be a mitigating use of reserves.
5.19 What does the £1.13m underspend in the Direct Schools Grant (DSG) budget relate to? What income is accrued through the DSG? Or is this an overachievement of income? How can underspend in the DSG Income budget line be used to offset the whole Hackney Education budget (which it appears to in the report) noting that DSG is to passport funds direct to schools?
§ (DoE) The Schools Forum administers the DSG and how this is spent among local schools. Where there is an underspend this sometimes relates to an underspend in schools or some parts of the system have not utilised all the resources available. Where there is an underspend, it is incumbent on officers to have discussions within the Schools Forum as to how this is pass-ported to local schools. This balance does not figure in the General Fund.
5.20 What does the £666k overspend in the Early Years Budget relate to? What management actions are being taken to address these?
§ (DoE) Hackney Education had commissioned a review by Ernst & Young to review provision, and would be bringing proposals for a new operating model for the sector and to ensure that this is managed more effectively. A report is expected at Cabinet in January 2024 setting out these proposals.
5.21 Hackney Education derives a significant amount of income from traded services to local schools and schools outside the borough (e.g. School Improvement Partners). How is income from traded services holding up in the current context of financial pressures within schools? Are there areas of trade which are experiencing specific difficulties, and what action is being taken to improve performance?
§ (DoE) A review of traded services had been undertaken and those services for which there was no longer a sufficient or sustainable demand, may need to be reassessed. The spending habits of local schools were changing, therefore, this required Hackney Education to keep all traded services under review as they must respond to local needs.
5.22 The Commission made clear that it appreciated how challenging the financial position of the council was and that this placed officers in very difficult situations in having to prioritise services, and identify those areas where savings could be made. Cuts have been made across the whole of local government over the past 10 years and these have had a significant impact on services and the communities which they support. On behalf of all the Commission, the Chair thanked all officers for their work in such difficult times.
Supporting documents:
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Item 5 (Coversheet) Budget Monitoring, item 5.
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Budget Monitoring Report October 2023, item 5.
PDF 103 KB