The purpose of this report was to provide Cabinet with an update on the Council’s revenue financial position as at 30th June 2023 and to seek approval for any virements over £100,000 which require approval by Cabinet as required by the Council’s Financial Procedure Rules.

The Chief Officer – Finance, Performance and Change provided a summary of the current position. The key points are as follows:

• The net revenue budget for 2023-24 is £342.334 million. The overall projected position at 30th June 2023 is a net over spend of £9.727 million.
• The projected over spend is primarily due to ongoing pressures within the Social Services and Wellbeing Directorate and on the Home to School Transport budget.
• The budget approved for 2023-24 included budget reduction proposals totalling £2.608 million. The current position is a projected shortfall on the savings target of £200,000, or 7.67% of the overall reduction target.
• A thorough review of earmarked reserves was undertaken by Corporate Management Board during quarter 1 of 2023-24 which has identified £3.067 million of reserves that can be unwound to contribute towards emerging risks for the Council as a whole during 2023-24. A further £733,000 of earmarked reserves was to be repurposed against similar schemes.
• It is too early in the financial year to provide a realistic indication of projected council tax income for this year and whether or not the Council is likely to see a reduction in its in income from Council tax as more people have experienced financial hardship due to the current cost of living crisis, or whether the additional income which should be collected through the introduction of the Council tax premiums on empty properties will impact. This will obviously be very closely monitored throughout the remainder of this year.

The Cabinet Member for Finances, Resources and Legal thanked the Chief Officer – Finance, Performance and Change for the report. He noted there were significant overspends that would have to be addressed and that it would be necessary to make a forensic assessment of the pressures and the full impact on the authority.

He noted he had been at a finance cabinet members network meeting and although it provided little comfort, it was somewhat reassuring that these pressures are found across Wales. He noted his support for the virements and the recommendation.

Prompted by a series of questions by the Cabinet Member for Community Safety and Wellbeing, a discussion followed about direct payments, whether there were families in Bridgend that had duplicate packages (i.e., direct payments and home care packages) and if so why, whether the Council claimed back direct payments that went unused, and that there seemed to be an over-spend in some areas of staffing and an under-spend in others.

The Chief Officer – Finance, Performance and Change confirmed that the Council did reclaim unused direct payments. She also noted that underspends arose because of staffing vacancies for example, and overspends because of things like agency costs. As such, the figure for social services, for instance, is a net figure. There are some underspends in some teams for staffing, whereas other teams may well be overspending for various reasons.

The Corporate Director – Social Services and Wellbeing confirmed that rather than having duplicate packages, some residents have, depending on their needs, mixed packages of care.

The Cabinet Member for Climate Change and Environment expressed his concern about the negative impact the current situation could have on other directorates such as Communities. He appealed to every single officer from the top to the bottom, but definitely in Social Services, to think twice every time they spend money.

The Deputy Leader noted that all members of Council would have to make some difficult decisions going forward about where we spend our finances.

She asked the Chief Officer – Finance, Performance and Change whether she had any reflections on where Bridgend fared in Wales as far as the overspend on social services was concerned, and whether the overspend was in adult and/ or in children’s social services.

The Chief Officer – Finance, Performance and Change confirmed that all authorities are reporting pressures and there is concern across Wales about social services spending, in both children's and adult services.

The Chief Officer – Finance, Performance and Change acknowledged, in response to a question by the Cabinet Member for Climate Change and Environment, that some of the overspends are about 5%, but some authorities are predicting up to a 20% overspend. All are showing a percentage increase on their budget this year.

The Leader drew attention to five issues:

• the Learner Support Budget and the challenges around out-of-authority placements due to an increase in demand and insufficient space at Heronsbridge and Ysgol Bryn Castell. In response to this, the Head of Education and Family Support indicated that they were very conscious that there had been an increase in out-of-authority placements but also made it clear that the replacement for Heronsbridge had been commissioned and that it will have around 40 additional places and 4 additional residential beds.
• The projected overspend in Legal, Democratic and Regulatory Services that is in part due to senior counsel services. In response, the Chief Officer - Legal & Regulatory Services, HR & Corporate Policy indicated that the overspend was directly linked to childcare cases taken through the court process. The fees for each application are now in excess of £2000. The cases are becoming more complex, which requires the authority to instruct senior counsel to attend, sometimes with very lengthy court hearings. In addition, the fees for experts are going up and as it's a local authority application, the court feels that any shortfall between the legal aid fees that are permitted, and the actual cost of the expert should be covered by the local authority.
• In some areas of social services expenditure, like mental health homecare for example, there are contributions from our partners, such as Cwm Taf Morgannwg University Health Board. He asked if confirmation could be given that we were maximising the contribution of our partners. In response, the Corporate Director – Social Services and Wellbeing confirmed that in terms of mental health services, there is a well-established arrangement for individuals who've got health and social care needs and costs are shared 50/50. In other areas, work with the health board can be a bit more contested. For example, continuing healthcare has been a contested area of public policy for many years and the frontline workforce try to ensure that the legislation and the guidance around continuing healthcare for both adults and children is adhered to but it is a challenge.
• He thought it could be necessary to consider and explore the issue of the fees and charges that are set for individuals. In response, the Corporate Director – Social Services and Wellbeing noted that this is a very regulated area in terms of public policy and the Welsh Government sets caps in terms of the amount individuals can be charged.
• He noted the underspend on mental health residential care and indicated that it was vital that underspends were maximised. In response, the Corporate Director – Social Services and Wellbeing indicated that she could give that assurance. She also noted there has been great success in this authority in terms of supporting people to live as independently as possible.
• He noted the overspend on independent residential care for children and that the local authority had invested in new provision at Brynmenyn. He requested an update on that development and confirmation that the local authority is considering other options to increase our provision of residential support within the county. The Corporate Director – Social Services and Wellbeing provided an update on the Brynmenyn development, indicating that they were very close to a handover in terms of the building from the contractors. A manager has been recruited and other staff are actively being recruited.

The Deputy Leader added that the best placement for children was in a family unit. Her plea was if you knew of anybody that wanted to foster or was considering it, please direct them to the website where information is available.

The Leader concluded this agenda item by indicating that it was necessary to be even more careful now about how financial resources are used and as such a Task and Finish Group would be convened that specifically looks at the financial pressures and challenges within social services and try to provide some additional support to that service in its ongoing journey of remodelling and managing within the financial constraints that the local authority is facing.

RESOLVED:

Cabinet:

·         noted the projected revenue position for 2023-24; and

approved the virements over £100,000 as outlined in paragraph 3.1.7.