Witnesses:
Julie Iles, Cabinet Member for All-Age
Learning
Mary Lewis, Cabinet Member for Children, Young
People and Families
Liz Mills, Director – Education,
Lifelong Learning and Culture
Jacquie Burke, Director – Family
Resilience and Safeguarding
Rachel Wigley, Director – Financial Insights
Mark Hak-Sanders, Strategic Finance Business
Partner – Corporate Finance
Key points raised
during the discussion:
- The Strategic Finance Business
Partner gave an overview of the corporate budgetary position and
strategy, focussing on the 2021/22 budget gap and a view of the
funding position from 2021/22 to 2025/26.
- The core planning
assumptions that informed the draft Budget were established using
the PESTLE Framework for considering political, economic, social,
technological, legal, environmental and climate factors. Future
demand, inflation and funding were also considered. Thus, the draft Budget and Medium-Term Financial
Strategy were based on an assessment of the likely operating
environment for the county council in 2021/22 and over the medium
term. The draft Budget was developed in an integrated way across
the organisation and was linked with the council’s four new
priority objectives and the community vision 2030. The immediate
priority for 2021 was to stabilise the council’s finances
following the COVID-19 crisis.
- The Strategic Finance
Business Partner stated that the draft Budget contained an
£18.3m funding gap for 2021/22.The main areas of the funding
gap were £5m in Adult Social Care, £5.9m in Children,
Families, Lifelong Learning and Culture, and £5.9m in
Environment, Transport and Infrastructure. Funding estimates were
to be iterated with the further clarity that was expected before
Christmas in the local government finance settlement following a
government spending review in November 2020; there was relative
confidence that the £18.3m gap would be closed without
further directorate efficiencies. Fulfilling the council’s
statutory duty of setting a balanced budget for each financial year
was to be achieved by refining core planning and funding
assumptions, reviewing directorate gaps, and finalising efficiency
and transformation proposals. The 2021/22-2025/26 capital programme
also needed to be finalised. A final budget was to be presented to
Cabinet in January 2021, following the conclusion of a public
consultation in December 2020 and equality impact assessments for
proposed efficiencies, and approved by Council in February
2021.
- The medium-term
estimates assumed that the Government Fair Funding Review would
reduce the council’s funding – estimates suggested that
the funding gap would rise to £170.1m over the 5-year period
to 2025/26.
- The Director –
Financial Insights gave an overview of the Children, Families,
Lifelong Learning and Culture Draft Budget. There were seven
strategic priorities for 2020/21, alongside ongoing
business-as-usual responsibilities within the Directorate. The
Directorate budget, excluding the Dedicated Schools Grant, was
£251m, the largest part of that being allocated to Corporate
Parenting, followed by Education, Lifelong Learning and
Culture.
- The Medium-Term
Financial Strategy for 2021-26 (MTFS) was focused on the key areas
of transformation and financial pressures within the Directorate.
The Ofsted rating of children’s services continued to be a
priority, but there were other financial issues such as expenditure
on placements, including Special Educational Needs and
Disabilities, and changes within integrated commissioning to
deliver and develop the Integrated Care System.
- Pressures for 2021-22 were
£61.6m and efficiencies proposed amounted to
£55.7m. Reductions that still
needed to be found over the 2021-26 MTFS period totalled
£22.6m and this figure assumed that
there would be a spike in Looked After Children referrals caused by
COVID-19, which were then expected to reduce from
2022/23.
- The High Needs Block
was a key area of financial risk for the Directorate. For 20/21,
there was a grant of £160m, an approved overspend of
£24m. This is the budgeted contribution to an offsetting
reserve, equivalent to the cumulative deficit to provide resilience
in the balance sheet, and an unapproved overspend of £8m. The
Directorate’s Capital Programme totalled £3m over five
years, for schemes directly delivered by the Service. There were
also Directorate schemes of £270.4m over five years included
in the Property Capital Budget.
- The Chairman asked
what the key risks and financial challenges faced by the
Directorate were in the short and medium terms. The Director
–- Education, Lifelong Learning and Culture explained that
the main risks were caused by rising demand and the cost of meeting
that demand, particularly unit cost. Across the system there were
discernible impacts of COVID-19 - such as increased levels of
anxiety in children and changes in young people’s needs - all
of which impacted unit cost. The best approach to meet challenges
was to strengthen the systems already in place: family resilience;
the Learner’s Single Point of Access; the SEN strategy; the
work on reducing absence and exclusions; and the community family
resilience network.
- A Member questioned
how the Directorate could continue to find efficiencies in the same
areas over consecutive years. The Cabinet Member for All-Age
Learning stated that 90% of Local Authorities were in a comparable
position to Surrey with regard to overspends and required
efficiencies. The Director – Education, Lifelong Learning and
Culture explained that the Directorate was building on the
strategies introduced in recent years, e.g. family resilience and
the Graduated Response. The Director – Family Resilience and
Safeguarding emphasised that the efficiencies to keep within the
budget envelope were in line with what the service believed was
best for children and what was set out in the initial strategic
vision, i.e. children should be helped at the lowest level of need
and those who became looked after should be cared for within
the county. The Service was attempting
to increase the proportion of permanent staff to improve the
experience of looked-after children and contribute to efficiency
savings. The Director – Corporate Parenting stated that
securing more foster carers was also key to providing service
efficiencies. Recruitment had slowed during the pandemic, however
there was an aim to return to pre-COVID-19 levels, and this would
reduce costs and improve the situation for young
people. The Cabinet Member added that
there were restrictions on how the Dedicated Schools Grant could be
used, however the council was continuing to lobby the Government
for increased SEN funding. The average unit cost in the
non-maintained and independent sector was £52k per placement
and did not necessarily generate better outcomes for young people.
The Service was seeking to increase the capacity of its own
specialist settings, which had placement costs of, on average,
£16k - £23k, and were therefore more financially
efficient. The Cabinet Member emphasised that, as a demand-led
service, the Service needed to reduce unit cost whilst guaranteeing
outcomes.
- A Member asked how
confident the Directorate felt that the planned savings were
achievable, given the repeat need for savings in the same areas of
pressure and overspends of the High Needs Block, transport, and
family resilience. The Director – Education, Lifelong
Learning and Culture stated that a detailed planning stage for the
delivery of each of those savings was underway, and each saving was
to have a robust plan sitting underneath it.
- A Member was
concerned about the high value of planned efficiencies in the High
Needs Block. The Director – Education, Lifelong Learning and
Culture stated that the Directorate was reliant upon a systemic
response to ensure savings were achieved. The RAG (red, amber or
green) ratings reflected the complexity of the task, however it was
anticipated that the ratings would start to improve. A group formed
from the school community was working with the Service around
inclusion and was aiming to ensure that in September 2021 every
child could have their need met within a mainstream or maintained
school environment. The Director assured Members that there were
large-scale delivery plans sitting behind planned
efficiencies.
- Members asked how
confident officers were that the Directorate would find the
efficiencies required of it and whether earlier expressions of
confidence that the council would close the remaining £18.3m
funding gap assumed that the further
£5.9m of efficiencies would be achieved by the Directorate or
if the gap could otherwise be closed. The Director –
Financial Insights stated that there was a government spending
review at the end of November 2020 that provided a high-level
provisional overview of likely local government funding. The
Director, however, expressed confidence that sufficient funding to
close the gap would be provided and thus directorates would not
have to find further efficiencies for 2021/22.
Barbara Thomson left the meeting at 11:38.
- A Member asked what
“additional management action” meant and for officers
to provide an example of this. The Director – Education,
Lifelong Learning and Culture, explained that wider ongoing work
was focusing on meeting needs earlier and reducing the need for
statutory plans; a fall in requests for statutory plans over the
previous 9-12 months indicated that management actions were
effective in resolving issues. Further examples were emotional
literacy support systems that were being put into schools and the
expansion of pathways to employment for post-16 students (the
Service was anticipating 100% increase in the number of placements
of those schemes by September 2021).
- A Member asked how
the UK’s future relationship with the European Union (EU) was
expected to impact the draft Budget and MTFS. The Strategic Finance
Business Partner stated that the impact of leaving the EU was one
of the legislative and economic factors that was considered in core
planning assumptions. Clarity on the
future relationship would be a guiding impact and thus this may
need to be revisited. The Director – Family Resilience and
Safeguarding stated that staffing was the biggest concern for
children’s social care. The Service had engaged with the
existing workforce earlier in the year to ensure that staff from
the EU had the correct paperwork in place to continue working for
the service. In terms of children’s homes and receiving
supplies, there was contingency planning in place. Work was
underway to ensure that families had the right paperwork in place
going forward.
- Councillor Clare
Curran – declared non-pecuniary interest as non-executive
director of Surrey Choices.
Recommendations:
I.
That, subsequent to this meeting, the Children,
Families, Lifelong Learning and Culture Select Committee will agree
wording for inclusion in the report regarding the draft Budget and
Medium-Term Financial Strategy which is to be prepared jointly by
the council’s four select committees.
Meeting suspended at 11:55
Meeting recommenced at 12:00