Agenda item

Consider report by Director – Finance and Procurement. (Copy attached.)

4.1       There had been circulated copies of a report by the Director – Finance and Procurement which provided budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 June 2023 along with explanation of the major variances identified between projected outturn expenditure/income and the current approved budget.  Forecasts had been completed at the first quarter of 2023/24 at the 30 June 2023 which projected overall pressures within the Council of £3.771m at the financial year end.  £3.267m of service pressures had been identified at the end of the first quarter plus £0.504m of inflation pressures.  All pressures were detailed in Appendix 1 to the report.  The most significant service pressure of £3.377m related to additional forecasted costs in Children & Families Social Work, which was mainly attributable to an increase in out of area placement costs.  That position was one being reported across the UK as the volume and complexity of cases increased, along with an increase in the cost of placements.  That budget was already under significant pressure during 2022/23 and as such Elected Members had approved budget growth of £2.5m through the 2023/24 financial planning process.  Those pressures of £3.377m were over and above the growth provided with an unprecedented requirement for out of area placements exhibiting over the first quarter of 2023/24.  Urgent management action was underway to minimise any further escalation in costs to protect the ongoing financial sustainability of the Council.  Current inflation levels in the UK were impacting the Council directly and through impacts on delivery partners.  At the first quarter additional direct costs of 0.504m, over and above growth provided in the budget were forecast based on current inflation levels.  The overall £3.771m pressure posed a significant risk to the Council’s ability to balance the 2023/24 budget.  The Recovery Fund was not sufficient to address the scale of pressure.  The Council Management Team had reviewed the monitoring position and had proposed a 20% reduction in some previously approved earmarked balances, brought forward from 2022/23, as a solution to balancing the budget in 2023/24.  Those reductions were shown in Appendix 2 to the report.   Consideration was urgently being given to the permanent budgetary impact of pressures and how they would be funded through the 2024/25 financial planning process.   Financial Plan savings of £11.418m required to be delivered in 2023/24.  Appendix 4 to the report provided an analysis of deliverability.  Following the June 2023 month end £5.343m (47%) savings had been delivered permanently, £5.456m (48%) were profiled to be delivered by 31 March 2023, and £0.619m (5%) had been delivered on a temporary basis through alternative savings.  

4.2       The Director of Social Work and Practice, Mr Stuart Easingwood, provided assurances that the Council was responding to unprecedented demands on the services provided by Children & Families Social Work to the best of its abilities.  The demand on services was being experienced on a Scotland and UK wide scale.  Scottish Borders Council was committed to providing care for young people from the Scottish Borders locally as much as possible. Out of area placements were only considered once all other opportunities in the region were exhausted or if a Children’s Hearing Panel had made a legal order in the interests of the young person.  In response to a question regarding the level of educational engagement a young person receiving out of area care would have, Mr Easingwood explained that the Director of Education and Lifelong Learning was working to guarantee that no effort was spared in ensuring that young people were provided with an educational package alongside the appropriate care provision.  Regarding in-region facilities at the proposed Tweedbank Care Village, Mr Easingwood explained that the plans were still progressing in partnership with Scottish Borders Housing Association and Aberlour. Mr Easingwood confirmed that a meeting was contemporaneously underway to discuss interim provision of facilities in the area whilst the Care Village plans were progressed.  The plans for the Care Village were also under review with a desire to ensure that they were fit for purpose.  The Chief Executive highlighted that the Council had a range of provisions in schools such as pastoral support; special service; partnership work with Quarriers and Aberlour; as well as Community Learning and Development engagement to support young people.  In response to a question regarding the potential for foster care to help alleviate some of the pressures, Mr Easingwood explained that there had been a 25% decline in the number of foster placements available nationwide, thanked foster carers for their invaluable undertaking and confirmed that work to recruit more carers would continue.  In response to a request from Elected Members the Chief Executive undertook to provide a private briefing outlining the number of children involved, legislative landscape, and costs associated with the Children and Families Social Work service.  Mr Easingwood confirmed that on a national level work was ongoing as part of the Children and Young Peoples Planning Partnership, and that all of agencies involved understood the need to be pro-active to resolve difficult issues.  The Chief Executive explained that future care provision would not involve an either/or system of in-region or out of region care.  Certain situations would likely always arise that could not be resolved at a local level, and the public sector needed to invest in the provision of care and care facilities for the future to avert a crisis.  In response to a question regarding staffing provision, Mr Easingwood explained that it was important to create career trajectories for people, and that an attractive package needed to be developed to ensure that people were encouraged to pursue a career in care.  Members welcomed the savings that had been achieved, or were profiled to be achieved, in the year.  It was highlighted that referring to current levels of inflation as unprecedented was imprecise because despite the rate being high, rates had been much higher in previous decades.  In response to a question uncertainty regarding receiving teachers’ pay award finances from the Scottish Government, Mrs Douglas confirmed that a commitment had been made that the Council would receive funding, however there was uncertainty in relation to the timing of the payment. 

DECISION

AGREED to:-

(a)     note the projected corporate monitoring position reported at 30 June 2023, the remaining pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1 to the report;

(b)     note the pressures of £3.771m detailed in Appendix 1;

(c)     approve the CMT proposal to reduce earmarked balances, brought forward from 2022/23, by 20% as detailed in Appendix 2 to the report to allow the 2023/24 budget to be balanced;

(d)     note the Recovery Fund resources detailed in Appendix 3 to the report;

(e)     note the progress made in achieving Financial Plan savings in Appendix 4 to the report;

(f)      approve the virements in Appendices 5 and 6; and  

(g)     approve the virements in Appendix 7 specifically related to the reduction in previously approved earmarked balances.