Agenda item

The Cabinet Members with Responsibility for Children and Families, and Education and Skills had been invited to the meeting to present the Council’s draft budget for 2020/21.  The Director of Children’s Services & Chief Executive of Worcestershire Children First (WCF), the County Council’s Chief Financial Officer and WCF’s Director of Resources were also in attendance.

The Panel’s views would contribute to Overview and Scrutiny’s overall response to the budget which was being coordinated by the Overview and Scrutiny Performance Board (OSPB).

By way of introduction, the Chief Financial Officer made the following points:

·       As part of the Agenda for the meeting, Members had been given budget figures published for December Cabinet.  Updated figures had now been published ahead of January Cabinet.

·       Comments from this meeting would be considered by the Overview and Scrutiny Performance Board on 29 January 2020.

·       Although there had been a significant increase in Government funding, this was still seen as one-off funding (although some had been in place for 3 or 4 years) and therefore had not been included in the base budget.

·       The provisional settlement had been slightly better than forecast.

·       The High Needs Block of the Dedicated Schools Grant was still not at the level of in-year spend and the additional funding from Government (£8.7m) had not been included in the base budget.

·       Reserves included an allocation for unforeseen events.

·       It was proposed to increase council tax by 3.99%.  Even with this increase, council tax would be one of the lowest in comparable authorities.

·       The County Council would continue to face financial pressures in the coming years.

Members were given an opportunity to ask questions and the following main points were raised:

·       It was confirmed that the budget for positive activities was now held by public health as part of the Public Health Ring-Fenced Grant (PHRFG).  The Director of Children’s Services confirmed that £400k per year had been spent on positive activities for the last few years and this would still be the case for 2020/21.  The Director of Public Health was now embarking on the re-commissioning of contracts with the aim of bringing positive activities into the 0-19 arrangements.  The Director of Children’s Services was currently in discussion with the Director of Public Health to look at the potential to put more money into the service.  However, there was no agreement to date.

·       The Panel considered savings applied to the 2020/21 budget for WCF.  In response to a question about savings from the Post-16 Home to School Transport budget, Members were informed that the price of the Severn card was being reviewed with the potential for charges to be increased.  This review would include benchmarking with the aim of bringing charges up to the level of other local authorities after three years of no change.

·       It was confirmed that savings from Housing Support Contracts would be as a result of re-commissioning.

·       It was confirmed that a review of eligibility for Home to School Transport would be undertaken and the service would also be looking for further efficiencies from providers.  Service users who were covered by statutory duties would not be affected.

·       Members were reminded that WCF did not hold its own reserves.  Any overspend would need to be covered by an amendment through the contract if necessary.  This would follow conversations between WCF’s Director of Resources and WCC’s Chief Financial Officer.

·       In response to a question about the breakdown of costs for WCF Management and Board, Members were reminded that for two years (until 1 October 2021) the Chairman and three independent Non-Executive Directors were funded by a DfE grant.  The three Council-appointed Non-Executive Directors were not paid.  After two years the Council would have to make a decision about future funding.

·       It was confirmed that the Independent Non-Executive Directors were paid £500 per day for a limited number of days per year.  This was paid on an hourly basis rather than a fixed daily rate.  It was suggested that, although this may seem like a large amount, it was not huge when compared to rates of pay for similar posts in other organisations.

·       Given the overspend in the Home to School Transport budget in 2019/20, a question was asked about what was being done to reduce spend in this area.  Members were informed that a corporate working group (Chaired by the Head of Finance) was looking at this including opportunities to maximise income, levels of demand and better ways of commissioning.  Members were reminded that for the majority of children using the service, the Council had a statutory duty to provide transport and, without a change in primary legislation, this was unlikely to change.  The Director of Children’s Services concluded that this was a very tough area which was unlikely to yield big savings.

·       The Chief Financial Officer agreed that without national policy changes, the Council would not see a change in demand for Home to School Transport.  However, he acknowledged that the Council’s demand projections had not always been accurate and there was a need to model and forecast better, sharing data earlier in order to better inform commissioning decisions.

·       A Member reminded the Panel that the Council had not had a choice in whether to set up the Company (WCF) and that none of the options were cost free.

·       It was confirmed that if a parent chose to send their child to a school that was not their catchment school, transport would not be funded by the County Council.  Members were reminded that there was a specific policy on Home to School Transport in relation to faith schools.  The Cabinet Member with Responsibility for Education and Skills confirmed that, in line with most local authorities, the Council used straight line measurements to assess distance from home to school.

·       The Director of Resources for WCF informed Members that the High Needs Block of the Dedicated Schools Grant (DSG) included an additional £8.7m which was Worcestershire’s share of the national £780m announced in October 2019.  However, this was a one-off payment and the Council would continue to lobby for additional future funding.

·       The Director of Resources confirmed that consideration had been given to ‘top slicing’ the DSG in order to balance the budget, something that had been done in other local authorities.  However, this was rejected as it may have meant that it would not have been possible to implement the national funding formula.  The Council was currently awaiting the outcome of a CIPFA consultation on the DSG.

·       The Director of Children’s Services confirmed that she was not aware of any private nursery providers which were planning to close provision as a result of the level of funding (which now included an additional £0.08 on the 2, 3 and 4-year-old hourly rates announced in November 2019) but would check and report back to the Panel.

·       In response to a request for an update on the 14 January meeting of the Worcestershire Schools Forum, the Panel was informed that the forum had been content with the 2020/21 budget proposals.

·       It was confirmed that the Duke of Edinburgh Awards Scheme was now funded by schools and the voluntary sector, rather than the Local Authority.

·       The Chief Financial Officer confirmed that the 2020/21 budget had taken account of recurring overspends and these were now built into base budgets where appropriate.

·       The WCF budget was forecasting a small underspend for 2019/20.  A Member noted that the Social Care Directorate was forecast to be within 0.2% of budget overall, something which Officers should be congratulated on.

·       It was confirmed that the overspend on Home to School Transport would remain in WCC cost centres, and the WCF budget would be shown as balanced.  The Chief Financial Officer informed Members that the overspend was viewed as a budget setting error and, as such, it would stay with the Council.

·       The WCF Board’s budget paper had been included in the agenda papers in the spirit of transparency.  It was confirmed that the WCF Board was meeting to approve the budget in the following week.

·       It was confirmed that, in line with WCC, WCF staff were allowed to carry forward a maximum of 5 days annual leave.

·       In response to a question from a Member of the Panel, the Chief Financial Officer confirmed that, although the budget included 2% for pay inflation, this figure was not yet agreed and may be higher.  The Director of Children’s Services confirmed that teachers had agreed a 2.75% pay rise.

·       Members were informed that the change from 37 to 35-hour contracts would not apply to WCF staff.  Savings had not been built into the budget as the Council awaited the results of a Trade Union ballot.

The Panel agreed that the following comments should to be forwarded to OSPB:

·       The Panel was content with the budget proposals for 2020/21.

·       The Panel expressed concern about the budget for Home to School Transport.  Given the budget overspend in 2019/20, Members urged careful monitoring of the 2020/21 budget and welcomed the setting up of a Corporate Working Group to look at levels of demand, transport routes and better ways of commissioning.

·       In relation to the High Needs Block of the Dedicated Schools Grant, the Panel recognised that the budget deficit reflected pressures being experienced by all Local Authorities and encouraged further lobbying of Central Government on the level of future funding.

·       Members noted that the Social Care Directorate was forecast to be within 0.2% of budget overall for 2019/20 and wished to congratulate the Directorate on this.

·       The Panel wished to express its thanks to Worcestershire Children First, and in particular the Director of Resources, on continuing to provide a good level of information to the Panel in relation to budget and performance.  Members had been concerned that the move to WCF would disrupt the flow of information to the Scrutiny Panel but were reassured that this had not proved to be the case.