Agenda item

In attendance for this item were:

Paula Furnival, Strategic Director for People

Rebecca Wassell, Interim Associate Director, Commissioning

Kerry McCrossan, Service Manager

Michael Hudson, Chief Financial Officer

Steph Simcox, Head of Finance

Sally Baldry, Principal Management Information Analyst

Cllr Adrian Hardman, Cabinet Member with Responsibility for Adult Social Care

The Chief Financial Officer and Head of Finance summarised the main points of the presentation which was included in the Agenda.

Draft Budget 2021/22

The Council had started the current 2020/21 budget year with a net settlement of £345million, and at Period 8 a very small underspend was predicted, which indicated progress with budgetary control and was also tremendously encouraging given the context of the Covid pandemic.

One of the ways in which the Council managed expenditure was by looking at projected demand for services, which indicated £26.5million of funding pressures.  Clearly the Council needed to work within the financial envelope received from the Government and the council-tax raising ability.  The net government grant increases totalling £9million was encouraging, however this was largely Covid related, and the effects of the pandemic would extend beyond quarter 1 of the budget year.

The Government’s Fair Funding Review had been deferred and two grants which were originally planned as one-off had continued to be rolled-forward; the additional Social Care Grant (of c£2.2m) and the Better Care Fund, however the New Homes Bonus had reduced by just over £1million. After applying a council tax increase of just over £6million, this left a shortfall of just over £10million, however £7.1million of savings had been identified. £3million of reserves were earmarked and it was explained that an element of bridging was needed because the figure of Council Tax collected by district councils and possible additional support from the Government for the impact from the pandemic remained uncertain and figures would not be fully confirmed until August/September.

The Directorate of People planned to work within its budget through demand management and partnership working.

In terms of the budget planning timeline, the 2021/22 Draft Budget report had been considered by Cabinet on 7 January and following consultation including with the Overview and Scrutiny Performance Board, would be reconsidered by Cabinet on 4 February and Council on 18 February. One change to the Cabinet papers was further investment in public rights of way.

The Head of Finance summarised the key points from the budget report relevant to Adult Services, including:

·         recommendation for a 1% increase in the Adult Social Care Levy for 2021/22 (which could be increased up to 3%)

·         additional Social Care Grant for 2021/22 of c£2.2million

·         pressures (£10.2million) were greater than the value of grant and recommended value of levy - £7.5million of demand including increased care costs, £2.7million inflation

·         figures in the budget report for inflation were across People Services and included £1.3million relevant to Communities and Public Health.

·         Services would need to continue to deliver efficiencies, transformational change and increase levels of income generation to remain within the overall recommended budget

·         £11.5million of pressures had been identified for 2021/22 including £2.7million additional costs for complexity/acuity for over 65s, £3.1million growth in price and complexity of care packages for adults with learning disabilities, £0.8million growth in complexity of care packages for adults with physical disabilities, £0.9million greater cost of mental health packages of care, and inflation increases across People Services of £0.6million for pay and £3.4million general inflation.

With the lack of any future budgetary certainty for local authorities, the Council was taking a prudent approach. Growth and pressures on spend were expected to continue at similar levels although it was anticipated that the adult reform programmes would cover annual pressures and prevent costs rising as quickly as they had.

The Chairman invited discussion and the following main points were raised:

·         The Fair Funding Review was still due to take place in 2020/21, although in view of the pandemic this may indeed change. The Chief Financial Officer confirmed that the Council would continue to lobby for the Review to take place and had responded to a recent consultation.

·         When asked whether the budget increase for mental health was realistic in view of the impact of the pandemic and the Council’s responsibilities, the Director explained that the main commissioning responsibility was discharged largely through Herefordshire and Worcestershire Clinical Commissioning Group (CCG), therefore the Council played a fairly small but important part with Care Act responsibilities to respond to people in crisis and ensure access to support and recovery; the fact that Worcestershire was a mental health transformation site was very positive and provided more funding. The Council was in a process of changing its mental health model, bringing it back in house, which would enable better oversight and ensure services were embedded in the community.

·         Further detail was provided about the increase in complexity of care for adults with learning disabilities, which was a national trend and resulted from increased survival rates of babies born with disabilities. There were also implications from Covid, since support could not be provided in the same way, resulting in higher unit costs in some cases. Over time, funding for this user group was increasing and at some point, would exceed the proportion of spend on other services.

·         In view of ongoing pressures, the Director was asked whether savings programmes which had not been implemented due to Covid, would continue in 2021/22 and the Panel was reminded about streams of work taking place as part of the new Strategy for the People Directorate. Overall, adult social care needed some modernisation to bring commissioning and delivery of services into line with high performing local authorities, which was likely to take three years and it would be important to maintain traction.

·         The new Directorate of People meant adult services was much better placed to maximise use of wider community services to prevent higher costs elsewhere, for example using libraries as hubs to help people navigate services earlier on.

·         When asked why the Adult Social Care Levy which could be up to 3% was being set at 1%, and whether this would be increased the following year, the Cabinet Member for Adult Social Care acknowledged this was a political decision to some extent and advised that it was planned to consider the option of using more the following year. There was some financial benefit in taking 1% this year as there was an element of compounding the 2% for the following year. It was also important to transform services before investing additional money.

·         Cllr Tucker, who was not a member of the Panel expressed shock about the decision not to give an inflationary increase for fees to domiciliary care providers, which had been criticised in the local media by Crossroads, a provider. Increased costs had been evident during the recent scrutiny ‘Care Work as a Career’ which she had led and whilst appreciating the principle of reforming a service first, services needed to continue. Whilst explaining that budget figures would need to be approved by Council, the Director provided more context and explained that fees and provision for domiciliary care were being looked at in conjunction with neighbouring authorities and the Council was about to go to market with a tender, which would help with the setting of cost/price. A response had been prepared to Crossroads and she also outlined the Council’s support to care providers during the pandemic. The CMR also cautioned against blanket increases and whilst he was aware of discontent from Crossroads, pointed out that in comparison with rates across the Midlands, the Council was not underpaying by any stretch. At the Chairman’s request, it was agreed that a copy of the response be provided to the Panel once advice had been taken about any commercial sensitive information.

·         The Director and CMR explained that all care providers had been written to (over 600) as part of consultation and partly in response to feedback from providers that council systems were opaque. While the response rate of 7% was very poor, consideration of rates and the Council’s role in the care market would continue and it was an evolving position.

In-Year Budget Monitoring (Period 8)

The Panel had been provided with the latest available figures and although these showed a slightly worsening position, indicative figures for period 9 showed improvement. The slight overspend of c£357k (0.3%) was a significant improvement from Quarter 1, the main reasons being tighter budget control, managing accountability, a 30% drop in new admissions to residential and nursing care (when comparing October 2020 to October 2019) and a decrease in projected numbers of people coming into the care system although higher average costs of those being placed in care.

There were variations between the different client groups:

·         Older People Services included a saving relating to implementation of ‘Liberty Protection Safeguards’ and staffing costs

·         Learning Disability and Mental Health Services were forecast to overspend due to increases in average unit costs

·         Physical Disabilities Services was forecast to underspend due to lower activity numbers than budgeted for

·         Provider Services were overspending due to agency and overtime costs

The forecast position excluded the impact of Covid-19, which was assumed to be funded from external funding sources, which were significant, for example the Covid-19 grant of £33.4million.  Areas where Covid related spend/loss of income had been funded which were relevant to this Panel included supporting care providers with additional costs, personal protective equipment, loss of income from clients, delay in implementation of change programmes, infection control measures and support for vulnerable individuals.

The Chairman invited discussion and the following main points were raised:

·         The Chairman congratulated the Directorate on the significantly improved budget position, although it would remain to be seen how things evolved after Covid.

·         Regarding the potential impact of the review of Learning Disability Services for adults, the Director explained that costs for this client group would not necessarily be impacted due to spread of types of care for this group and the increases in unit costs were broadly related to nursing placements particularly for mental health, as a result of being more confined during Covid.

Performance Monitoring

The Principal Management Information Analyst provided a summary of the performance information for quarter 3 (October to December 2020).

Regarding the number of adults whose long-term support needs were being met by admission to care homes, the rate for 18-64 year olds was 14.08 per 100,000 at the end of November, with 48 admitted over the rolling year. Numbers had been very low in June/July, had since started to rise very slowly but remained below average, significantly lower than the previous year and all cases were scrutinised to ensure admission was appropriate. The rate for older adults had dropped, was expected to further reduce and was much lower than the previous year.

The proportion of people with no ongoing social care needs following reablement after hospital discharge had dropped slightly but improved steadily to 77% for December 2020. Performance for the number of older people staying at home following reablement was good linked to good reablement services and a reduction in numbers of people going into nursing and care homes.

Annual reviews of care packages had a performance target of 95%, and performance at the end of December had dipped to 83.7%. Performance varied across the different services with the area social work teams being on target, with the issue being with mental health and learning disability teams, however action plans to improve were in place.

Discussion points:

It was agreed that further detail about the percentage of annual reviews completed for the mental health and learning disability client groups would be circulated to the Panel. The Director confirmed that Covid was the main reason for recent underperformance, due to staff having to work differently and to a certain extent by families, but that percentage numbers were in the high 70s. She reassured the Panel that people were absolutely not left unsupported and that where reviews had not yet occurred, health and wellbeing checks had taken place.

The Director responded to a question about the potential long-term impact on budgets from the reduction in admissions to care and nursing homes and increases in reablement, advising that the cost difference if current rates of support continued could save the Council around £6m. Reablement costs could increase but the overall outcome was very positive for the Council and in particular for the individuals concerned.

In agreeing comments to be highlighted to the Overview and Scrutiny Performance Board, the Chairman referred to the current financial forecast which was a significant improvement for which the Directorate was congratulated. It would be important to see how shifts during the Covid pandemic evolved, for example whether the drop in numbers entering care and nursing homes continued.

It was noted that a 1% increase in the Adult Social Care Levy was proposed in line with inflation for 2021/22 and the additional Social Care Grant for 2021/22 c£2.2m was welcomed.

Maintaining an appropriate level of financial reserves was important in order to have sufficient resilience and this was something the OSPB could explore as part of its budget discussion.