Agenda item

This report provides the quarter one 2024/25 projected financial outturn information for the general fund and housing revenue account (HRA).

The February 2024 approved general fund budget for 2024/25 was balanced on the assumption of £38m in savings, efficiencies, and additional resources. 

The quarter one budget monitoring position for 2024/25 demonstrates the ongoing financial challenges to this authority from relentless increasing demand and cost pressures. These pressures are not dissimilar to those faced by all upper tier local authorities. The council’s robust financial governance and proactive management of its budget is enabling significant mitigation.

Services are expected to implement mitigation strategies to address emerging operational pressures identified within the first quarter. This is critical to maintaining the financial health and sustainability of the council as the medium-term financial plan makes no allowance for replenishing any reserves used to balance 2024/25 budget.

The expenditure on the Special Educational Needs and Disability Service (SEND), which is within the high needs budget, continues to exceed the government grant made available as part of the Dedicated Schools Grant (DSG) and reflects the rising demand for services in this area. This position has significantly worsened from the already dire position assumed in the budget for 2024/25. BCP Council has taken steps to manage this situation locally but, as a national issue, these steps are limited. Conversations for an urgent solution continue with the Department for Education (DfE) and the Ministry of Housing, Communities, and Local Government (MHCLG). 

The Deputy Leader and Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book. The Board was advised of the quarter one 2024/25 projected financial outturn information for the general fund and housing revenue account (HRA).

The February 2024 approved general fund budget for 2024/25 was balanced on the assumption of £38m in savings, efficiencies, and additional resources. The quarter one budget monitoring position for 2024/25 demonstrated the ongoing financial challenges from increasing demand and cost pressures, not dissimilar to those faced by all upper tier local authorities. The Council’s robust financial governance and proactive management of its budget had enabled significant mitigation.

The Board was informed that Services were expected to implement mitigation strategies to address emerging operational pressures identified within the first quarter.

The expenditure on the Special Educational Needs and Disability Service (SEND), continued to exceed the government grant made available as part of the Dedicated Schools Grant (DSG) and reflected the rising demand for services in this area. This position had significantly worsened from the position assumed in the budget for 2024/25. Conversations for an urgent solution were continuing with the Department for Education (DfE) and the Ministry of Housing, Communities, and Local Government (MHCLG).  The Board raised a number of issues, including:

·     Carparking Overspend and Cost of Collection Charges – The Board sought clarification as to whether this was due to transactional charges by Credit Card Companies being considerably more than budgeted. The reasons for this were being examined along with mitigating measures to address this.

·     Charges per transaction had increased but numbers using the car parks had reduced. The Portfolio Holder was asked if charges had reached a point which deterred people from using the car parks. It wasn’t believed that this was the case and different factors around this were being looked into.

·     Action: It was suggested that the O&S Board should look into parking charges further and undertake a more in-depth look into whether the current policy was suitable. The Board was advised that the Chief Operations Officer was carrying out an in-depth look into this.

·     The Board raised issues regarding wellbeing concerns at points 21, 22 and 23 of Appendix A1 to the report for Children’s Social Care.  There was a strong oversight of the Children in Care Overspend which was addressed though Gateway Meetings.

·     Costs of agency staff and whether it was realistic that this could be reduced. A significant recruitment drive had changed the position to around a mix of 30 percent agency staff and 70 percent permanent staff. There was clear support for remuneration for social workers in children’s services in order to support this agenda.

·     The reduction of the Adult Social Care Budget by £5.1million. An amount had been budgeted for mental health support which had not been required. This was an ongoing budget issue which was proposed to support the ongoing budget pressures with Children’s Social Care. The saving had no impact on the adult social care service provision.

·     Element of Challenges - Parameters were being put in place which would hopefully reduce the £3.1 million current forecast. Additionally, there may be a saving which has not been brought down. It was noted that the initial contingency was part of the budget which had been set by Council. It was suggested that the rate of the use of contingency may be concerning depending upon the degree of confidence in the mitigating measures being taken.

·     Optimism Bias Contingency – The Portfolio Holder was asked if there was any regret in putting this in place as there was then a very real opportunity to use this without giving it further consideration. The Board was advised that the risk should be balanced with contingency, and it was thought that this was being done well. Although the contingency money was spent but this was ok as this was part of the budget.

·     Notice periods to realise savings as part of transformation – Clarification was sought regarding savings reduced due to notice periods it was noted that this would have an impact on savings as the period of savings would be reduced by the length of the notice period. 

·     Children’s Services Delivery Model – It was noted that parts of the new service delivery model were on hold until spring 2025 due to a potential Ofsted visit during 2024. In addition, changes needed to be made in conjunction with the pay and reward work.

·     DSG – It was noted that paragraph 24 of the report outlined that the DSG budget deficit had increased by 57 percent. A comment was made that it was difficult to understand why it had increased at this rate over a short period. Children’s Services had turned around the backlog situation with EHCPs and with more in place this had contributed to the increase in this period.

·     DFE sector led improvement was scrutinising all decisions around placements and the service had been successful at reducing costs quite significantly. The Board was reminded that Recommendation C of the report set out that a separate report should go through to the October Cabinet meeting.

·     It was noted that part of the Safety Valve support would have been for two new provisions for children with ASD which needed to be addressed. The capacity within secondary schools was not there currently there to provide places but this would become available in the future. A Councillor commented that unless there was full reform around SEND the Council could still experience difficulties as external providers costs impacted

·     Savings by SEND provision in local schools – The Board asked how many children could be accommodated and the impact of this on savings. It was noted that this was work which needed to be undertaken, there was some complexity depending upon the numbers of children within cohorts and also their geographical location.

Action: The Board requested that a report on Capital - as part of Q2 report be brought to the Board – to remain on tracker until achieved.