Witnesses:
William House, Finance Manager
Mel Few,
Cabinet Member for Adult Social Care, Wellbeing and
Independence
Tim
Evans, Cabinet Associate for Adult Social Care, Wellbeing and
Independence
Declarations of interests:
None
Key
points of discussion:
-
Officers highlighted the challenging budgetary
situation facing the service, noting that a core reason for the
budget overspend were the high savings targets set out in the
Medium Term Financial Plan (MTFP). It was highlighted that the
updated September 2016 projected overspend for 2016/17 was
£20.9 million. Officers explained that increased demand for
adult social care placed a burden on the service, however, it was
also noted that this was a national pressure, and one that was not
limited to Surrey County Council.
-
It was highlighted that the
introduction of the national living wage had seen care costs
increase.
-
The Cabinet Member for
Adult Social Care, Wellbeing and Independence highlighted that
briefings had taken place between the Council’s Cabinet and
Members of Parliament for Surrey to focus on the issue of the
overspend within Adult Social Care. The Cabinet Member noted in particular the limitation of
the powers regarding the adult social care 2% council tax increase.
This was highlighted as benefitting the service by £12
million and reducing the impact of savings requirements. However,
the possible limitation of this increase as a one-time occurrence
was a key risk for the service budget. Equally, the £12
million of income raised from the precept is substantially less
than the £35 million of pressures budgeted in 2016/17
relating to increased demand and market prices.
-
Members questioned whether the budget
setting method used by the service was appropriate,
querying how the financial planning process could be
improved to better reflect the trends in demand. Officers explained that the issue was not to do
with the methodology used to predict demand, but the difficulties
experienced in delivering savings plans to reduce demand to
budgeted levels. Demand is currently
running at 6-7% which is very close to the level modelled prior to
including the impact of savings plans which intended to bring
demand down to 4%. It has not been
possible to achieve this level of reduction in light of increased
demand across the whole health and social care system in
Surrey.
-
It was questioned by the Board whether
direct payment reclaims were an achievable target. The Cabinet
Member for Adult Social Care, Wellbeing and Independence noted
that the introduction of prepaid
accounts for direct payments (which automatically prevent monies
being paid out to individuals who have surpluses in their accounts)
in the previous financial year will considerably reduce manual
reclaims in future years.
-
Officers and the Cabinet Member for Adult
Social Care, Wellbeing and Independence noted that budget changes
as a result of winter were not possible to predict accurately due
to changing pressures from winter conditions, however that the
service was expecting a maximum of £25 million overspend up
to the end of the financial year.
-
Members questioned the impact of Surrey
Choices funding on the budget overspend and whether the service
holds the organisation to account effectively regarding
the increase of £2 million in funding provided
by the Council. The Cabinet Member for Adult Social Care, Wellbeing
and Independence noted that the organisation was in a
transformation programme. It was also noted that the operational
structure of the organisation was the responsibility of its
shareholder board. It was noted by the Cabinet Member for Adult Social Care, Wellbeing and
Independence that it would be
ideal for there to be representation of the Adult Social Care
service on the shareholder board to improve
accountability.
-
The Board was informed that Surrey Choices was
undergoing changes in delivery since it became a separate entity
from the Council, and that this had presented new
challenges. The Cabinet Member for
Adult Social Care, Wellbeing and Independence highlighted that,
dependant on who was driving change, this organisation could
present a positive way forward.
-
Members raised concerns that there was a danger to
frontline service as a result of the overspend in the
future.
Recommendations
The Board is extremely concerned that the projected overspend in
Adult Social Care poses a significant risk to the Council’s
overall financial position in 2016/17 and future years.
The Board recommends:
-
That the Cabinet set out the actions that be
undertaken in the next three months in order to reduce the
projected overspend;
-
That the Cabinet consider revising the methodology
for finance planning;
-
That the Cabinet prioritise a sustainable set of
savings for Adult Social Care as part of the planning for the
Medium Term Financial Plan (MTFP) 2017-2022;
-
That officers bring a future report on the present
issues emerging in the home-based care market, and what action the
Council is taking in relation to this;
-
That officers bring a future report on Surrey
Choices to the Board, as the Board is concerned about increased
costs;
-
That the Chairman write to the Surrey Choices
shareholder board requesting non-executive representation for Adult
Social Care.