Agenda item

As part of the Budget Scrutiny Process, the Chief Financial Officer (CFO), highlighted the key points from the draft Budget 2023/24 and medium-term financial plan for 2024-27 including:

·         The overall net Council Budget for 2023/24 was £400.792m. The Council had received net additional grant funding of £26.3m, £8.4 for core spending areas and £19.5m in recognition of pressures in adult and children’s social care.

·         The Panel was advised that a funding review was anticipated for 2025/26, as the Department for Education (DfE) considered the responses to the Josh McAllister review and other changes, which would be critical moving forward.  

·         The Council’s budget pressures totalled £67.9m, of which pay and contract inflation were significant factors, as was a large increase in service demand, including £5m relating to children’s safeguarding.

·         The proposed Council Tax increase for 2023/24 was 4.94%, which would provide a net £14m additional income. With a limited use of reserves, the levels of savings and efficiencies needing to be identified was £22.4m.

In terms of specific budget information relating to children and families, the WCF Director of Resources (DOR) highlighted the key points to note:

·         The Panel was advised that the 2023/24 Budget for WCF was £147m gross, of this £111.105m related to the Council’s net base budget and the balance towards the overall running costs of WCF. The £32.825m other funding mainly related to specific grants for example the Social Care Grant £15.3m, DSG £6.5m and other specific grants and £3.06m related to non-County Council sales, fees, and charges.

·         The main budget pressures related to the ‘demand led’ placements which were consistent with other upper tier authorities and pressure on home to school transport budgets. It was highlighted that there was a risk that the placements budget for 2023/24 could exceed the budget by £2-3m, although this would be mitigated by the £2m risk reserve and close monitoring during the year, with prompt action taken if required. The DOR advised that this approach had been taken and worked well over the last 3 years.

·         The DOR outlined that £13.7m gross investment into Children’s Services for 2023/24 (net £10.1m), was largely funded by the additional Social Care Grant (£9.3m). Savings of £3.6m had been identified, which included a reduction of the employer pension fund rate from 18.6% to 17.1% which saved £0.6m, an increased vacancy factor from 2.5% to 6.5% equating to savings of £1.7m and savings proposals of £1.3m required by WCF, which were outlined in Appendix 3 of the 5 January 2023 Cabinet Report.

·         In relation to the provisional Dedicated Schools Grant (DSG), the Council had been notified that an extra grant of £14m, as part of the additional funding outlined in the Autumn Statement, was to be made available for schools (including academies), this was in addition to the £406m for the schools’ block highlighted in the report. The Panel was informed that the Government had also announced it’s intention to extend the statutory override for the DSG for the next 3 years to 2025/26. This was welcomed in the short term but in effect deferred the problem of funding the historical deficit for SEND and High Needs to March 2026. The Council continued to lobby on this issue and to prioritise work to reduce the deficit through the DfE programme Delivering Better Value (DBV) in SEND which had commenced, and which would influence and shape future national government policy in this complex and challenging area of activity.

During the discussion, questions raised by Members were responded to as follows:

·                Members raised a number of issues about Home to School Transport, including ensuring value for money for the Council was obtained, particularly with the use of taxis, the rising costs for providers and the possibility of extending the use of greener vehicles. The DFO advised that there was to be a deep dive review on all aspects of the Home to School Transport system to see how it could be made more sustainable. The CMR commented that this was an issue currently facing many Councils and that the siting of schools should be given careful thought in the planning process to enable more students to be able to walk or cycle to school. The CMR advised that there had previously been a premium paid by the government to help rural authorities with this area of spend, but this had since been removed.

·                In response to financial questions on the HTST budget the CFO and DFO agreed to provide the Panel with details of:

- the breakdown of figures for areas of spend, e.g., primary, secondary and SEN

- a breakdown of costs in terms of the types of vehicles used.

- a specific cost comparison of total HTST costs for 2022/23 compared to projected costs for 2023/24. (The CFO advised there was £4m additional investment).

·                In response to a member’s query regarding the bar chart on benchmarked council tax figures in respect of the amount spent on children and families, the CFO agreed to provide more detailed information so that members could compare the amount spent by area. He added that Worcestershire’s spend on Children’s services usually placed it in the middle of CIPFA comparable authorities.

·                The impact of the increased vacancy factor was raised. With some key vacancies already being difficult to recruit to, concern was expressed that this would have a negative impact on the recruitment of key staff, and thereby the quality of service provided to children and young people. The Chief Executive provided assurance that this requirement would be safely managed to ensure that there was no impact on recruitment to social worker posts.  The Panel was informed that the delivery of this would be monitored carefully across the Council and WCF during 2023/24 - with a provision set aside as a contingency.

·                A Member asked what measures were in place to address the High Needs Block funding deficit. The DFO advised that £5m had been allocated in this year’s budget for this purpose to start to provide for the historical deficit which would need to be addressed over the next 3 years. The DFO explained that the DBV in SEND programme would be the key route to deliver a sustainable plan and inform future policy alongside the other 54 authorities included in the programme.

The Chairman thanked the Finance Officers for their report. As this would be the last Panel meeting the CFO attended before leaving the Council to start a new job, the Chairman thanked him for his work and wished him well for the future.