Agenda item

The Leader of the Council was invited to update the Board on the Medium Term Financial Plan, the process for setting the 2018/19 Budget and how Scrutiny might best contribute to that work.

Budget setting for this year would follow a different process than in recent years. The Council was facing a number of challenges and changes to Policy eg the budget pressures resulting from the inadequate situation in Children's Services, changes to Business Rates and the cap on public sector pay were all variables making financial planning more difficult. 

The Leader explained that the overall resource base was broadly steady but slightly increasing and a gap was emerging due to the demand led services mainly Children's and Adults.  Work was on-going in the Directorates to look at the trajectories of the Budgets and Directorates would then be looking at how they could work within a resource allocation over the medium term. 

As part of this process, it was suggested that Scrutiny could look at:

·       what other councils were doing in respect of budgets

·       the detailed in-year analysis

·       a comparison of in-year analysis with the new suggestions coming forward when the information was available in December.

During the discussion, the following main points were made:

·       There was £7.5m shortfall of which £6m related to Children's Services

·       Each Directorate would be advised of their resource allocation for next financial year and asked to consider how they would be able to manage within that allocation. Directorates would build their Budget bottom up by considering the Corporate Plan objectives, Directorate service requirements and pressures and the resources required to achieve those requirements

·       The Three Conversations Model was going to be one of the key underpinning initiatives in Adult Social care moving forward. It was a strengths-based approach to social care which built on the resources and resilience that an individual already had, including family, friends and the wider community to avoid long term care.  This was being piloted in some areas at the moment, meanwhile the numbers in crisis and pressures in this area were still high as not everyone was yet going through this process

·       The Adult and Health interface was very key in the medium term and the resource allocation would be discussed jointly as they were interlinked. It was important to ensure that the total funding was considered to ensure the best value and outcomes.  It was suggested that the relevant Scrutiny Panels should also carry out joint discussions

·       There were a series of initiatives in respect of winter pressures both nationally and locally.  One example in Worcestershire was that social workers would be allocated to hospital wards to assist with effective discharge

·       The impact of public sector pay on the Adult Social Care Budget was questioned.  It was confirmed that the key assumption eg pay and inflation would need to be reviewed as part of the budget setting process.  A challenge for the Directorate was that the majority of spend was with external providers

·       There was an opportunity to submit an expression of interest in a Pilot Business Rates Pool. It was a one year Pilot which in principle the County Council would be in favour of, if there was support from all District Councils.  There were some risks to take into account ie the no detriment clause had been removed and the Council would be trading a fixed level of funding for a variable sum.  Also the timescales for responding were tight

·       As there were a number of new councillors following the local Elections in May, it was suggested that it would be helpful if there was a councillor seminar about finances and the budget setting process during November. It was noted that in addition, there would a councillor budget briefing on the Council’s financial settlement  before the December meeting of Cabinet

·       Engagement with partners to date had been through Leaders, Chief Executive's and CCN ; a member suggested that local external partners should be involved  in the process and the Leader agreed to consider this

·       It was mentioned that it was important to ensure that adequate resources were provided for Scrutiny to ensure that it was effective in its role and also for the additional responsibilities for Children's Services Scrutiny

·       As consideration of the Alternative Delivery Model (ADM) moved forward, it was suggested that an in-depth analysis of children's social care was necessary particularly for those services provided by contactors, out of county residential placements and external foster placements which were much more expensive and not as good quality when they were not delivered in-house

·       The point was made that no decision had been made about the ADM for children's social care and development of this to meet the statutory direction would require lots of resource

·       Contrary to the Leader's earlier suggestion that the overall resource base was broadly steady but slightly increasing, it was suggested that actually this wasn’t the case as there would be significant cuts to funding especially if rates of inflation were not taken into account.  Also, the very inadequate situation in Children's social care had been building for a number of years and previous budget decisions had contributed to the situation

·       The Leader was urged to ensure that the public message about the financial situation should be truthful and candid

·       In order for Panels to carry out Scrutiny, they would need detailed information be made available as soon as practicable.  The Leader explained that this information was still being worked on at the moment but would be available in due course.

·       The Interim Chief Financial Officer confirmed that as part of the budget setting process, Directorates would need to specify how they would manage within their budget including risks and savings plans which she would sign off.

The following information was requested

·       Current savings plans and risks which could be circulated to Panels

·       Worcestershire County Councils and CIPFA Comparative Statistics.

The Chairman thanked the Leader and Interim Chief Financial Officer for attending the meeting and working with Scrutiny over recent months.

It was agreed that:

·       Each Panel would carry out budget scrutiny and report back findings  to the Board

·       Some support and guidance from the Finance Directorate would be arranged for Panels to assist Panels in their role

·       Each Panel would be supplied with last year's financial information as a starting point

·       The Vice-Chairman would be available to also provide individual support to Panels as requested.