Agenda item

Purpose of the item: Scrutiny of 2023-24 Draft Budget and Medium-Term Financial Strategy to 2027-28 of areas within the remit of this Select Committee.

Witnesses:

Clare Curran, Cabinet Member for Education and Lifelong Learning

Sinead Mooney, Cabinet Member for Children and Families

Denise Turner-Stewart, Cabinet Member for Communities and Community Safety

David Lewis, Cabinet Member for Finance

Rachel Wigley, Director – Finance, Insight & Performance

Nicola Kilvington, Director – Corporate Strategy and Policy

Nikki O’Connor, Strategic Finance Business Partner – Corporate

Louise Lawson, Strategic Finance Business Partner – Customer & Communities

Daniel Peattie, Strategic Finance Business Partner – CFLL

Marie Snelling, Executive Director – Customer and Communities

Rachael Wardell, Executive Director – Children, Families & Learning

Tina Benjamin, Director – Corporate Parenting

Matt Ansell, Director – Family Resilience and Safeguarding

Liz Mills, Director – Education and Lifelong Learning

Hayley Connor, Director – CFL Commissioning

Key points made in the discussion:

1.    The Cabinet Member for Finance introduced the item, noting that the draft budget had been agreed at Cabinet. The draft budget included a remaining funding gap of circa £14 million for 2023/24, which would need to be closed before the final budget and a funding gap of circa £200 million across the medium-term financial strategy (MTFS). The total pressures were circa £125 million and circa £65 million of efficiencies had been identified. The Strategic Finance Business Partner (Corporate) added that uncertainty remained on the Council’s funding from Government at this stage, until the Local Government Finance Settlement is received. The autumn statement from government provided useful pointers, including an increase in the threshold of council tax increase to 2.99% without holding a referendum and an ability to increase in the adult social care (ASC) precept to 2%. The initial assumptions used in the draft budget resulted in a £27 million increase in overall funding, this included an assumed 0% increase in the ASC precept, and a 1.99% increase in council tax. Inflation was the biggest factor in terms of pressures.

2.    A Member asked about the impact on services if the assumption that income levels would return to pre-pandemic levels in 2023/24 was not correct. The Executive Director (Customer and Communities) explained that income was monitored closely. There was a risk that libraries could not get back to those income levels, but this had been planned and mitigated for. Measures could be instigated if required, which included adjusting supply budgets and holding vacant posts. Surrey Arts was close to pre-pandemic income levels already. Registration services had a continuous high demand, recovering quickly in 2021/22, and were projected to over-realise income this financial year (2022/23). The services were regularly benchmarked to consider enhanced opportunities to generate additional income.

3.    In response to a question on utilisation of rental space, the Executive Director (Customer and Communities) explained that there were currently 16 rooms available for hire within libraries and many were well-used by long-term hirers. The price of rental spaces was regularly reviewed and there had been work on optimising a web presence to push spaces available. Open access technology was being introduced across 13 libraries, as well as extended opening hours which would increase income. The Cabinet Member for Communities and Community Safety added that many of the libraries were generous in proportions, thus it was important to repurpose and optimise the space and provide opportunities for community hubs. 

4.    The Executive Director (Customer and Communities) responded to a Member that they could use a Council library to run a surgery with their residents. The Cabinet Member for Children and Families noted that she had run her surgery in Staines Library for five years and it provided a safe and secure place.

5.    A Member asked if it was possible to move funding from one budget envelope to another. The Director of Finance (Insight and Performance) explained a virement was possible. It depended on the amount as to whether it had to be approved by Cabinet.

6.    In response to a question on how consultation feedback was reflected, the Director (Corporate Strategy and Policy) explained that there had been macro level engagement with residents, drawing on research from autumn 2021 that included workshops with residents and a statistically representative survey. Consultation feedback showed residents supported funding for services for vulnerable services and early intervention and prevention. A budget survey was currently live and available to all residents.  It was due to close on 19 December 2022. Equality monitoring information was standard with all surveys to understand the demographic of respondents.

7.    A Member asked whether a section of the performing arts library was self-funded. The Executive Director (Customer and Communities) would provide a written response following the meeting.

8.    A Member asked about the risk of inflation on staying on track with Safety Valve contributions. The Director of Finance (Insight and Performance) explained that inflation had been lower when the agreement was reached and the impact in the medium-term had been flagged with the Department for Education (DfE). The Council had heard from government that around £8 million additional funding is likely to be received for the 2023/24 financial year, which was expected to cover inflation. The Director of Education and Learning added that there was also in-year monitoring of inflation.

9.    A Member asked about confidence that free schools would be able to compensate for the capital grant being £48 million lower than hoped for and other options. The Director (Education and Lifelong Learning) explained that the agreement had been structured for the capital element to sit at the end to have a longer-term impact. The Council had previously received additional capital funding in an unplanned way. There may be a risk to revenue in year five of the agreement if additional capital funding were not received but there was time to plan if that were the case.

10.A Member asked about the predicted fall in pressure forecast in 2023/24 for home to school transport and whether this was realistic, considering the rising number of Education, Health and Care Plans (EHCPs). The Strategic Finance Business Partner (CFL) stated the prediction was realistic based on the current intelligence. There were over £2 million of efficiencies, with a £17 million net increase in the next financial year. Pressures included inflation and EHCP growth which were both expected to be at lower rates in future years with net increases year on year which are broadly similar. The assumption for fuel prices was that they would remain at the current level, subject to natural inflation rises.

11.Responding to a question on the timing of expanding the Council’s in-house provision for children with disabilities (CWD), the Executive Director (Children, Families, Lifelong Learning (CFL)) explained that if the increase in inhouse sufficiency was delayed to wait for borrowing costs to reduce, it was likely to have an overall negative impact financially due to the high cost of external provision. The Member also asked by what year the Council expecting to have made sufficient capital investment to mitigate overspends in the CWD service. The Executive Director explained that the capital investment was broader than just the CWD service. The overspend was linked to direct payments and personal support spend for families with CWD. The budget would be adjusted in terms of revenue spend in this area.

12.A Member asked about the £2.5 million overspend in social working staff when vacancies existed and whether increasing the salaries of permanent staff would reduce the spend on agency staff by a similar amount. The Director (Safeguarding and Family Resilience) explained that the cost of agency staff per head was significantly greater than that of a permanent member of staff, which was why the overspend existed. Increasing salaries was being considered. The Member added that East Surrey College had expressed interest in working collaboratively with the Council to train social workers to then work at the Council. The Member asked whether reserves would be called on the meet the pressure of inflation. The Strategic Finance Business Partner (Corporate) said there was currently no plan to call on reserves. The Cabinet had approved the use of part of the current financial years’ contingency budget to cover the cost of the pay award above what was built into the 2022/23 budget, but otherwise no use of either the contingency or reserve was agreed. Directorates were being asked to mitigate pressures and implement budget recovery plans in-year for directorates forecasting an overspend in 2022/23.

13.A Member asked whether the efficiency to manage demand for looked after children was achievable and whether it involved greater spending on early help services. The Executive Director (CFL) explained the demand management centred around maintaining children at home, as this was usually the best option for them. The reason the efficiency was red-rated was due to the possibility a child may have to come into care due to safeguarding issues. The Director (Safeguarding and Family Resilience) explained that there was a review on early help services, and it was not expected that the service would cost more; it was about delivering services differently and more effectively. It was hoped there would be a reduction of children requiring statutory social work as a result of a good early help offer. The Director (Corporate Parenting) added that where appropriate, the Council was encouraging children to step-down from residential care to fostering. The No Wrong Door model had averted a number of teenagers from coming into care and the reunification programme had identified suitable children to return home. 

14.A Member queried how expanding in-house provision was an efficiency in the Adult Social Care (ASC) budget but was a cost in the CFL budget and asked whether fostering should be considered an efficiency. The Director of Family Resilience and Safeguarding explained that the cost of external provision for residential services for children was significant and thus, it was more cost effective for the Council to deliver the provision. The Cabinet Member for Children and Families added that the care home closures in ASC were for those with less priority needs and the buildings were no longer fit for purpose. The Executive Director (CFL) shared that increasing allowances to in-house foster carers would be coming to Cabinet for approval in the coming months. It cannot be shown as an efficiency on the budget because the cost of increasing allowances would happen all at once and therefore, the longer-term impact would not be seen at that stage.

15.A Member asked whether there was an increase of the children in in-house provision due to struggling to recruit foster carers. The Executive Director (CFL) explained that the Council would not seek to accommodate children in a residential placement if there was suitable fostering. If there were not enough in-house foster carers, the Council would utilise the Independent

Fostering Agency. Children would be moved to internal children’s homes when appropriate. 

Actions/requests for further information:

1. The Executive Director of Customer and Communities to provide a written response on whether a section of the performing arts library was self-funded.

RESOLVED:

After the meeting, the Committee shall agree wording for inclusion in a joint report from the council’s Select Committees to the Cabinet in respect of the draft Budget 2023/24 and Medium-Term Financial Strategy to 2027/28. That wording shall be drafted under the oversight of the Chairman and Vice-Chairmen and then shared with the Committee for agreement. It will reflect the wish of the Committee to make workforce recruitment and retention the absolute priority for budget expenditure.

The meeting was paused at 13:02pm and reconvened at 13:32pm.