Agenda item

(indicative timing: 11.15am -12.00pm)

As part of the Budget scrutiny process, the Panel considered the draft 2022-23 budget for areas within its remit. The County Council’s Chief Financial Officer (CFO) highlighted the main points to note from the draft budget and the medium-term financial plan including:

·         The overall net Council budget for 2022-23 was £373.2m, compared to the gross budget for 2021-22 of £349.7m.

·         The significant pressures on the budget included £15.7m for People Services, £10.3m for pay and contract inflation and £5.9m (£7.9m gross) for WCF relating to social care. Specific details were provided as to how it was expected these funding pressures would be met.

·         Several one-off Government grants had been received for 2022-23 including a further £6.1m in recognition of the pressures in Adults and Children’s social care; also, a one-off services grant of £1.4m, discounted in part to reflect that the grant was to fund the Council’s employer liability in relation to the new National Insurance levy.

·         The Panel received a graph benchmarking Council Tax for County Councils in 2021-22 without Fire. The Panel noted that Worcestershire’s average Council Tax (£1,344) was at a lower level than the average, but highlighted the graph was difficult to breakdown in terms of area.

In terms of specific budget information in relation to children and families, the Panel was informed that:

·         The full year WCF Budget was £134.9m gross, of which £109.143m related to the Council’s base budget contribution to the total running costs of WCF; £23.319m related to other funding and £2.459m related to non-County Council sales, fees and charges.

·         Over half of the WCF budget was the ‘demand led’ placements and home to school transport budgets. There was a risk that the placements budget for 2022-23 could exceed £2-3m and that this was being mitigated by a £1.9m risk reserve. This would be closely monitored, with prompt action taken as required.

·         The Panel was informed of an additional allocation of £7.1m to the High Needs Block in 2022-23 which was Worcestershire’s share of the national £780m announced in October 2021. A further £325m was announced in the settlement to support High Needs placement and top-up pressures being experienced by all local authorities.

·         The Director of Resources (WCF) explained that the above would help to support some of the ongoing cost pressures in the High Needs Dedicated Schools Grant (DSG), however, it would not eliminate the deficit of around £16m which would need to be carried forward to 2022-23. The Panel was informed of the key risk associated with the expectations of the Government when the statutory instrument came to an end, which would be the position for the 2023-24 financial year. The Director assured the Panel that the Council continued to actively lobby on this matter. The Panel supported this approach and would await a further update.

·         It was clarified that £1.3m had been included in the 2022-23 WCF Budget for pay inflation. The Panel was informed that the 2021-22 pay award had not yet been settled, but the Director of Resources (WCF) advised that 3% (an estimated 1.75% for 2021-22 and 1.25% for 2022-23) was deemed to be a realistic increase in budget, in line with the approach of other local authorities. The Panel asked to be kept informed of the progress of negotiations.

During the discussion, further points were raised by Members, which were responded to as follows:

·         The Cabinet Member and the Director of Resources (WCF) provided some clarification on the process which took place between the Council and WCF to agree a contract price for WCF for services for the following year. The Director of Resources (WCF) highlighted that WCF also had its own governance requirements to adhere to, including agreement of the budget by the WCF Board.

·         With respect to the Transport budget of £19.372m, the Home to school element of this was £18.289m and the remainder of the budget related to travelling costs incurred by WCF employees, such as social workers visiting clients.

·         It was clarified that the looked after children and fostering budget, was contained within the CSC Placements and Provision budget.

·         In response to a query about whether WCF needed to pay more to retain key staff, the Director of Resources (WCF) commented that there was always pressure on the placements budget, but that salaries compared well with those in the County Council.