The Director of Finance will submit a report (Document “U”) which provides Members with an overview of the forecast financial position of the Council for 2016-17 and a mid year performance report.

It examines the latest spend against revenue and capital budgets and forecasts the financial position at the year end. It states the Council’s current balances and reserves and forecasts school balances for the year. 

The report is also being considered by the Executive at its meeting on 8 November 2016.

Recommended –

That the Corporate Overview and Scrutiny Committee  review and comment on the Mid Year Financial Position Statement and Performance Report for 2016-17.

                                                                        (Andrew Cross – 01274 436823)

The Director of Finance submitted a report (Document “U”) which provided Members with an overview of the forecast financial position of the Council for 2016-17 and a mid year performance report.  It examined the latest spend against revenue and capital budgets and forecasted the financial position at the year end. It stated the Council’s current balances and reserves and forecasted school balances for the year. 

The report was also being considered by the Executive at its meeting on 8 November 2016.

The Director of Finance stated that the report was a combination of service performance coupled with financial performance.

In relation to service performance, the Interim Assistant Director Policy, Programmes and Change drew Members’ attention to the recently approved District and Council Plan documents which in essence would herald a new set of indicator sets based on priority outcomes that the Council, its partners and the community will be working together to achieved around:

·        Better Skills, more good jobs and a growing economy;

·        A great start and good schools for all our children;

·        Better health, better lives;

·        Decent homes that people can afford to live in and

·        Safe clean and active communities

In relation to current service performance the details were not comprehensive at this mid year stage, however more detailed and comprehensive data would be available at the end of the financial year, which will also highlight areas of improvement.  Where there were concerns regarding performance, robust performance management measures were in place and portfolio holders had been privy to the discussions.

Overall current performance information identified that performance in many key areas was improving and remained on target although there continued to be areas where the district faced significant challenges and where performance was either deteriorating or not improving quickly enough and these were detailed in the report.

In relation to financial performance the Director of Finance stated that the Council was forecasting a £6m overspend above the approved budget of £378m and that although this had not materialised, it was a particular issue within Adult Services which was forecasting an overspend of £5.2m, primarily as a result of the overspend on purchased care and learning disability purchased care.  Within Children’s Services, a £3.1m forecasted overspend was predicted, primarily as a result of an increase in the number and cost of Looked After Children.

In relation to the £45.6m budgeted savings the Director reported that there were risks associated with the underachievement of a number of plans and it was forecasted that £9.0m of savings will not be delivered as intended, primarily linked to service areas dealing with Transport Assistant, Looked After Children, Older Residential Care, and Waste Disposal.

Reserves stood at £13.8m, which continued to be seen as potentially inadequate, in the context of reduced Government funding and savings to be achieved in future years.  A position that had been confirmed by the Council’s External Auditors.

Finally the Director drew attention to the Council Tax and Business Rates Collection rates,  and although Council Tax collection rates were higher than forecasted, Business Rates collection were lower than expected with the Council receiving £2.5m less than the budgeted amount.

In conclusion he stressed that all departments were taking remedial action to bring the budget back on track.

During a lengthy discussion Members asked a number of questions of the Director of Finance as well as of the Strategic Directors / Assistant Directors that were present.  The questions together with the responses are detailed below:

In relation to the proposal to develop a 69 apartment extra care home and a 50 bed residential care home in Keighley on the former Bronte school site, as part of the Great Places to Grow Old Strategy, a Member questioned the rationale behind this, as Local Authority care facilities costs 50% more compared to the private sector, and therefore why had the private sector not been tasked with meeting this shortfall.  In response the Assistant Director stated that the proposals were specifically about addressing the short term bed shortage, when older people were discharged from hospital and waiting for a reassessment, and that the intention was not to provide long term care in the new facility.

In response to a question on how the Service was addressing the inefficiencies in long term care, the Assistant Director acknowledged that further work in residential care settings was being looked at.

In relation to the cost of internal provision versus the cost of external provision, a Member stressed that this issue should not just be looked at in terms of cost, but factors such as adequate staff pay and training for those employed by the local authority were equally important, and a balance had to be struck.

A Member stated that in order to ensure residential care costs were contained, financial contributions from the NHS were crucial.  In response the Assistant Director stated that there were on going discussions with our health partners to address a number of issues, including how to bridge the shortfall in funding.

In relation to the issue of complex care, the Leader highlighted that in the context of insufficient competition, the cost of this type of care was generally  high.

A Member questioned whether the budget set for Children Social Care was realistic in the context of the pressures being experienced in Looked After Children.  In response the Assistant Director stated that the budget in this area was realistic as the number of children coming into care was on a downward trajectory during the last financial year and the budget had therefore been set within this context, however Bradford had seen a 9% increase in referrals to the Service, which mirrored the national picture of increased referrals.  Within Bradford the primary increase in the number of children being looked after was from within the new emerging communities.

In relation to a question regarding secure residential care, the Assistant Director stated that it was always the intention to try and house children within the district, however a small number of children sometimes had to be placed outside of the district in secure residential settings, as these children needed a level of care not available within the district.

In addition it was pointed out that there had been a significant increase in the cost of purchased placements and that those children placed in secure residential care were generally placed there on welfare grounds or they had been referred by the courts.

In relation to a question regarding fostering and the pressures being faced by the Service, the Assistant Director acknowledged that the service was under pressure and there had been a drive to recruit more foster carers, in particular those that were able to look after older children with particular needs.  In addition the service was struggling to match the needs of a particular child to a foster carer.

A Member questioned that if the Council was more active at resolving issues when they first presented themselves, that would then reduce pressure on services.  In response it was acknowledged that if early intervention and the early help offer was right, this would consequently reduce the number of children coming into care and free up social work time to deal with more pressing cases.

A Member stated that in relation to Adult Social Care the strategy to contain costs was not working and there needed to be a debate on how we could address this. In response the Director of Finance stressed that the financial pressures facing adult social care and looked after children was a national issue and how provision is maintained going forward, in the context of reduced local government funding.

A Member questioned the impact of the imminent introduction of the Universal Credit on Council Tax collection rates and also the adequacy of the Council reserves going forward.  In response the Director of Finance stated that it was difficult to estimate at this stage the impact of Universal Credit, albeit to say that there could be a corresponding impact on Council Tax collection rates.  In relation to the reserves position, given the significant cost reduction targets the Council’s reserves position was inadequate.

A Member questioned the rational behind the proposal to close a care home and the proposals to build a new facility, as the demand for care was only going to increase over the long term.  In response the Assistant Director stated that the closure of  Home B was in a different part of the district whereas the proposal to build a new facility in Keighley was in a part of the district, where a particular need had been identified in respect of extra care beds.

In relation to the significant overspend in Children’s and Adult Social Care, a Member ascertained what work, if any, had been done to look at the issue from a new angle such as obtaining a new perspective from officers outside of these two service areas, with a view to injecting some fresh ideas into the debate.  In response the Director of Finance that some work had already been done in this area, including a review by Deloittes into Adult Social Care which had flagged up some weakness around implementation, in addition a new Strategic Director was now in post who would no doubt have a view on how the service functioned going forward. 

A Member stressed that more public health work should be diverted towards Adult Social care and raising awareness around taking responsibility for our own care with a view to reducing dependency in old age.

The Chair thanked the Director of Finance and Strategic Directors/ Assistant Directors for attending the meeting and providing detailed responses to Member’s questions.

No resolution was passed on this item.