Agenda item

The Cabinet Member with Responsibility for Children and Families and the Assistant Director of Families, Communities and Partnerships had been invited to the meeting to update the Panel on the development of the Alternative Delivery Model (ADM) for Children's Social Care.

The Panel received a presentation from the Assistant Director.  In the course of the discussion the following main points were made:

·       Cabinet had previously agreed to take 2 options forward: a wholly owned council company and a strategic partnership with another local authority.  Members were told that the strategic partnership was no longer an option and the Council would be taking forward the development of a wholly owned company.

·       A risk in this option was the perception that this was a form of privatisation.  This was not the case; an important driver would be to maintain the Local Authority's value base as the company developed.

·       Members were given a detailed list of the services that would be included in the scope of the company.  All but 2 of the services (Targeted Family Support and the Placements Team) were also under direction from the DfE.  The services included in the scope covered 620 fte staff.

·       The Adoption Team and the Young Adults Team were not in the scope as they were part of a different delivery model and it was important not to undermine this work.

·       The Company would be overseen by a Board, with non-executive directors being independently appointed.  There would be approximately 9 members of the Board, depending on the skill set of those appointed.  The Chair would be appointed in consultation with the DfE.

·       Maintaining the democratic link would be a clear principle.  It was important to remember that the company would be delivering services on behalf of the Council.

·       The Wholly Owned Council Company (WOCC) would be a route to sustain improvement.  There would be no quantifiable financial benefits and this was not about income generation.

·       Concern was expressed about the high costs of setting up the company.  A further question was asked about when the company could be disbanded and whether this could happen when the service was judged by Ofsted to be 'good'.  In response it was suggested that, when the service was judged to be 'good', there would need to be a period to sustain this.  It was confirmed that improvement work would continue alongside the development of the WOCC.

·       In response to a question about what would happen if performance slipped further, Members were reminded that the County Council remained accountable, with the running of the services delegated to the company.  It was important to ensure that this did not happen.

·       Staff who transferred to the WOCC would retain the same terms and conditions and the same pension arrangements.  The Company would be a corporate partner with a strong relationship with corporate support services (with approximately 85% buy back).

·       In response to a question about the WOCC's relationship with Place Partnership, the importance of providing high quality support services was highlighted.

·       The working assumption was that the majority of the Company's staff would be based at the County Council's Wildwood Offices, as that was where staff were currently based and where the Multi-Agency Safeguarding Hub was located.  There would also need to be locality offices throughout the County.

·       The £4.6 million required to establish and set up the Company would be spent on transition and development costs, including legal, HR and project management costs.  This figure may change as the detailed work on setting up the company was done.

·       Current guidance was that the Company would be liable for VAT, but the County Council had a commitment in writing that the DfE would meet these costs.

·       The County Council was currently in discussion with the DfE about potential funding support.  In response to a question about what other local authorities may have received, Members were informed that this was not currently in the public domain, although conversations with colleagues in these authorities were ongoing.  It was suggested that Councillors may be able to get information on this from fellow Councillors in other authorities.

·       The Cabinet Member with Responsibility confirmed that the DfE had been absolutely categorical that either there would be new arrangements which did not require the payment of VAT or that they would meet VAT costs and would continue to do so after the Council was out of intervention.  Written confirmation of the position was awaited.

·       It was confirmed that the role of Lead Member for Children's Services would remain and the WOCC Board would also include an elected Member.  Due to a conflict of interest in holding the company to account, this place on the Board could not be taken by the Lead Member for Children's Services.

·       No decision had yet been taken about the role of the statutory Director of Children's Services.  This would be discussed further with the Council's new Chief Executive when he was in post.  It would be important to ensure that relationships between the Council and the new Company were right as, although the duty to carry out the services would be transferred, the Council would retain the responsibility for those services.  A Member commented that it would be important to ensure that there were no unhealthy tensions between the Council and the Company.

·       The appointment of the Chairperson would be crucial and they must be the right person for Worcestershire.

·       It was confirmed that the Council would set the budget for the Company as part of its corporate budget setting process.  In the light of this, a question was asked about what would happen if the Company asked for an increase in budget, something that may have an impact on levels of Council Tax.  This was acknowledged as a valid concern, and it was part of the strategic commissioning role to assess whether budget requests were necessary when level of demand was considered.  This would need to be worked through via the development of the contract and the implementation phase, and may be something that scrutiny could have a role in.

·       It was confirmed that there would be a year's implementation phase with a shadow Company formed by 1 December 2018.

·       Concern was expressed that the decision to set up a WOCC would be taken by Cabinet rather than full Council.  It was confirmed that the decision on the actual contract would be taken by Council in due course but the decision to approve the development of the Company would be taken by Cabinet in March 2018.  Further concern was expressed that this was a huge change for the Council and it was important that all Members were able to buy into it at an early stage.  The Assistant Director confirmed that she would take advice from Democratic Services.

·       It was confirmed that Trade Unions had attended staff briefings and would be involved all through the process.

·       It was important to ensure that residents had a clear understanding of what was happening to avoid the perception that this was privatisation of a Council service.  The CMR agreed and reminded Members that the Council would retain responsibility for the service and would continue to maintain budgetary control and to approve the Company's business plan.  It was acknowledged that there was also a staff concern about the perception that they were going to work for an organisation that might not have the same public sector value base.  It would be important to bust the privatisation myths in order to ensure staff retention.

·       It was acknowledged that an incredible amount of work had been undertaken to get to this point.  A question was asked about whether the dates going forward were set in stone and whether there was a fall-back position if deadlines were not met.  The relationship with the DfE would be crucial and Members were referred to the development of a Memorandum of Understanding which would set out expectations.  The expectation would be that the ADM would go live on 1 April 2019.  However, it would be important to focus on getting it right rather than simply making it happen.

·       A question was asked about how the Company would make service improvements, given that it would be staffed by the same people.  It was acknowledged that the majority of staff would be the same.  However, the Board would have a single, unwavering focus on children and young people and sustaining improvement.  The CMR reminded Members that the priority would be to make service improvements and the ADM would be a single focused organisation which should add to this and not detract from it.

·       An important message was that there would be no organisation redesign as much of this had already been done and there were no plans for any redundancies.

·       It would also be important to look at what services remained with the County Council and ensure that they were sustainable.  The Assistant Director agreed that it would be important to maintain a joined up offer and consider the impact on the rest of the organisation.

·       In response to a question about the relationship between Councillors and the WOCC, it was suggested that it would be important to strike a balance between allowing an element of independence and ensuring good outcomes.  Formally, Cabinet and Council would be required to approve the WOCC's business plan on an annual basis.

·       With reference to the role of the individual elected Member, there was a need for further work on this and it was perhaps something that scrutiny could be involved in.

·       Further work was needed on protocols for dispute resolution between the County Council and the WOCC in relation to approval of the business plan.  However, in practice it was hoped that working relationships would be good enough for this not to happen.

·       The CMR confirmed that he would welcome ongoing scrutiny involvement as the ADM was developed.