Agenda item

In-year Budget Monitoring – Quarter 2

The Deputy Chief Finance Officer (DCFO) advised the Panel that as at Quarter 2 the year end forecast position showed a marginal overspend for CoaCh and the Chief Executive’s Unit was largely break even, with a few minor variances as detailed in the report. One of the variances related to additional expenditure in connection with the purchase of property related software following the insourcing of Place Partnership Ltd. The DCFO advised that they were currently looking at ways for this to be financed outside of CoaCh. The areas of underspend had been used to offset some of the increased costs, for instance, relating to legal costs for childcare cases.

In respect of the Communities budget, the Panel was informed that at Quarter 2 the year end forecast was for an overspend of £227k, which was mainly as a result of reduced income from The Hive, which was not likely to be received this financial year. The Assistant Director for Communities (ADC) explained that the main financial pressure had resulted from Civica moving out of the Hive. Consideration was being given to using the vacant space for a youth hub facility and she was liaising with the Department for Work and Pensions regarding possible grants available to assist this purpose. It was stressed that this possible income would not be at the same level as was previously obtained. 

The ADC also highlighted that ways in which the Archives/Archaeology unit could generate more income were being looked at, and a bid had just been submitted for an Archaeology contract. Other areas were also being reviewed to see whether there was any scope for efficiency savings. In response to a Member’s question about the potential of development streams, the ADC advised that there were two elements, firstly the advisory service which was base budget funded and where historical records were cared for and advice was provided for planning applications. The second element related to a field service and this was where there was the opportunity to tender for commercial work. The Panel was informed that the team was developing the skills required to be able to successfully bid for work. The Head of Libraries, Archives and Archaeology was currently putting together an Action Plan on income generation and was expecting that within the next 6 months the team would be in a better position to bid for significant work.

Budget Scrutiny

The Leader of the Council had suggested that Scrutiny Panel’s might wish to discuss emerging pressures and challenges for services in relation to the 2022/23 Budget at this meeting.

The DCFO advised that a post pandemic review of operations had identified a number of key pressures which would impact services including the rising costs of transport, energy and pay. It was noted that in CoaCh, the majority of the budget related to staffing.  The Government had confirmed that it would return to an annual pay award, but the pay award had not yet been set for this financial year. The Assistant Director for Human Resources, Organisational Development and Engagement (ADHR) advised that the Council supported the suggested pay award of 1.75% arrived at through national bargaining, but that the trade unions were seeking a much higher rate. It was likely to be February before a final pay award was confirmed.

The Panel was informed that there were difficulties in recruiting key specialist staff on a national basis, and agency staff were therefore being used to support certain specialist roles, leading to significantly increased costs.  The Strategic Director for Commercial and Change advised that the issue was particularly acute for CoaCh due to the many different specialist roles. Members felt that this recruitment issue was one which needed more detailed review in terms of the staffing costs and ensuring cost mitigation.

On a positive note, the ADHR was pleased to confirm that the Council was currently maintaining an 85% permanency rate for Social Workers, where there had previously been significant recruitment and retention issues. Also, the Council was growing its use of and support for apprenticeships, with over 100 apprentices currently being supported through use of the levy in Worcestershire businesses.

With the RPI increasing and likely to be at 3% by the end of the calendar year, the Panel was advised that inflationary factors were putting pressure on services just to remain as the status quo.

The Strategic Director advised that the Council currently had £630m of procurement managed by the Council’s Commercial team. For some of the contracts such as Microsoft, market influences could lead to a sudden increase in costs, whilst for major contracts due to end next year, such as the street lighting contract (negotiated by West Mercia Energy) there would inevitably be an increase in contract price. The Panel was informed that CoaCh had a number of procurement interim staff with specific knowledge to provide support.

The Cabinet Member for Corporate Services and Communication commented that whilst the inflationary factors presented a change in circumstances, he was impressed with the way in which the Procurement Team were facing the challenges and had confidence in them. He was pleased with the investment being made in the Apprenticeship programme and that succession planning was being built in.

The increased cost of transport and the impact on the supply chain was raised by Members and the question was asked as to what the Council was doing to mitigate these costs?  The Strategic Director explained that as the Council didn’t buy many goods and services itself, these costs tended to sit with suppliers and contractors. Where the Council used transport such as for home to school transport, there were some fixed contracts and some other arrangements. Additional costs would be mitigated wherever possible, but it was hoped that this was a relatively short-term issue.

Members expressed their concern about the emerging pressures and challenges and the resultant impact on Council budgets and services. The Chairman highlighted that the Panel was due to review the Corporate Procurement Strategy at its January meeting. In the meantime, Panel’s comments would be forwarded to the Overview and Scrutiny Performance Board.

Performance Monitoring

The Panel received performance data for Quarter 2 and asked a range of questions which were responded to as follows:

·         Registration of deaths within 5 days – concern was expressed about the red and deteriorating performance in this area and that the data for September 2021 was missing. The ADC explained that the September 2021 data was missing because of a national technical problem. The deteriorating performance related to delays by General Practitioners (GP’s) submitting forms which resulted in deaths not being able to be registered promptly.  It was confirmed that some GP’s were repeat offenders. It was agreed that the Chairman (on behalf of the Panel) would lobby primary care colleagues to improve performance. The Panel agreed that this issue would be included on the Panel’s work programme.

·         Death registration appointments within 2 days – it was agreed that as this performance was 100% and green that a breakdown could be included in future graphs.

·         Increasing Staff Engagement – A Member questioned why the data for December 2020 to June 2021 was missing from the performance graph. The ADHR explained that this gave a misleading impression, and he reassured the Panel that there had been a lot of work taking place on staff engagement including regular staff briefings, targeted conversations during staff performance reviews and regular consultation with trade unions.

·         Sickness Rates – A Member sought further clarification on the sickness rate figures. The ADHR highlighted that the figures for September and December 2020 were incorrect and should read 3.22 and 5.23 respectively. He advised that there had been an increase in sickness rates as a result of long Covid cases and also with staff being signed off work whilst they awaited treatment, which had been delayed due to Covid. A Member queried how the Council’s Covid sickness figures compared to national averages. The ADHR advised that unfortunately local authorities were taking very different approaches as to how and when Covid was being recorded as sickness, with some not recording it as sickness at all which did not help with offering any meaningful comparisons. It was requested that a graph showing sickness days versus working days be incorporated into the performance data in future.

·         Compliments – The Strategic Director drew attention to the number of  compliments received this year, which was double the previous year. The majority were for adult social care services, though there was also 20 for children’s social care and 6 corporate compliments too.

·         Library usage – The Panel noted that since they were re-opened library visits had not yet recovered to pre-pandemic levels, although use of e-services had significantly increased.