Agenda item

Revenue Budget Monitoring


Suzanne Hall, Finance Business Partner for Gloucestershire County Council, presented the Revenue Budget Monitoring Report for the commissioning of Children and Families Services in 2020/21, including net budget analysis and Year-End Forecast (October 2020).


Introducing the report circulated with the agenda, Suzanne confirmed that the budget update had been grouped by service area, with Dedicated Schools Grant (DSG) and non-DSG variances shown separately.


The forecast year end revenue position as at October 2020, (non-DSG funded services), represented an over-spend of £14.648 million, (11.24% of budget). Included within this figure was the forecasted additional cost of the impact of Covid-19 on budgets, totalling £6.979 million, (representing an underlying over-spend of £7.669 million, including estimated £2.585 million for additional external placements). Over-spends included external placements and home to school transport, both of which had been identified as ongoing pressures at the end of 2019/20.


Dedicated Schools Grant (DSG) funded services had been forecast with an over-spend of £14.432 million for 2020/21, including deficit carry forward of £8.442 million and deficit high needs budget of £5.449 million.


Additional forecast expenditure, brought in to address the impact of Covid-19, had been grouped into five key areas; i) external placement costs; ii) home to school transport; iii) transitions for care leavers; iv) staffing; and v) support to vulnerable pupils when schools reopen. A further £2 million had been forecast to offset costs relating to the anticipated impact on social care and education services after the easing of lockdown measures.


Activity levels within social care continued to place significant budgetary pressures on children’s services, in particular against the external placement and safeguarding staff budgets. At the end of September 2020, children in care numbers had been reported at 764, compared to 722 at the end of April 2019. This position was based on actual expenditure to the end of September 2020 and forecasts input in October 2020. In recent months the number of children in care had reached 800 plus.


Significant non-DSG variances referenced in the report included:-


a)    Children in Care – an over-spend against the external placement budget of £9.266 million (34.8% above budget). This included a contingency of £2.585 million for new cases in-year and £4.248 million for the current and future impact of COVID-19 on placement numbers.


b)    Safeguarding – this represented a forecast over-spend of £1.523 million, (7.8% above budget), including £0.4 million as contingency planning for additional staffing capacity to respond to a possible spike in activity.


c)    Young People Support – an over-spend of £0.546 million had been forecast to cover the cost of agency staff/vacancies in youth support teams. COVID-19 costs accounted for £0.196 million of the variance.


d)    Commissioning for Learning - home to school transport had been forecast with an over-spend of £2.594 million, (including an estimate of £1.34 million to cover the impact of COVID-19 from September onwards). This had been offset by a specific grant of £0.715m.


e)    Services for CYP with Additional Needs – this included a £0.5 million contingency sum to support vulnerable pupils as they returned to school


f)     Regulated Services – including an over-spend of £0.255 million against special guardianships due to a higher than expected number of orders.


g)    Other variances – other over-spends included the cost of additional management capacity to continue the safeguarding improvement journey during the COVID-19 period. This had resulted in a forecast over-spend of £0.753 million in social care and commissioning. (To offset these cost pressures, £1.52 million of funding from the MTFS would be held back to offset any over-spend in-year).


Make the Change (MTC) targets for 2020/21 totalled £0.57 million, (£0.55 million assigned to education and £0.02 million to child arrangement orders). The over-spend against the home to school transport budget was anticipated to have a negative impact on targeted savings (£0.15 million). It was also unlikely that part of the pensions savings forecast, (£0.07 million), would not be met.


Education and Additional Needs


Schools - The DSG deficit carry forward budget totalling £8.914 million was forecast to be offset by de-delegated balances of £0.472 million;


Services for CYP with Additional Needs – with an in-year demand for special school provision and special school places at capacity, a £0.75 million overspend had been identified in the independent special schools budget. The overspend had arisen from reduced trade income and a contingency of £0.5 million to be set aside to offer SEN support to schools in the Autumn in response to the impact of Covid -19;


Education Outcomes and Intervention – a deficit budget had been set against the high needs block of £5.449 million


Commissioning for Learning - Home to school transport had been forecast with an over-spend of £2.594 million, including an estimated £1.34 million to address the impact of Covid-19 on service provision from September onwards, (to be offset by a specific grant of £715k). This underlying cost was due to the rise in demand and cost of SEN provision, number of solo journeys required and the increased cost of procuring new routes. An action plan was in place to address a range of issues impacting on this area and to reduce costs where possible.


Early Years - an underspend of £0.3 million had been forecast in nursery education funding. This was due to the lack of uptake of placements.


Budget Scrutiny Meeting Update – 7 January 2021


Updating members on recent forecasts, including the outcomes of the Corporate Scrutiny Budget meeting held the previous week, members noted the commissioning Intentions and budget changes proposed by the draft MTFS in relation to the Children and Young People Budget.


Key points from the meeting included:


a)    Significant investment to be made in the Vulnerable Children Budget, including £3m for external placements. This would need to be monitored carefully.


b)    A reduction in the number of agency workers was reported, reducing from 21.2% to around 50% of the workforce.


c)    There was a continuing rise in the number of children in care (800) and children on child protection plans


d)    Net of Covid-19 current overspend in the service was £7.669 million, (the latest report to Cabinet in late January to show a £1 million improvement on this).


e)    Some small savings within education would be made through a reduction in pension costs.


f)     The LGA had identified a £3bn gap in the children service budget nationally


g)    A Sufficiency Strategy was in place to manage the children’s social care market and ensure the right mix of placements


At the previous weeks meeting, scrutiny members had expressed concern about year on year overspends in the Children’s budget and had suggested increasing the budget from the outset to avoid a large overspend. In response, cabinet members stated that the proposed budget figures for the draft budget 2021/22 were at the right level. With a caveat that the placement budget was likely to require further resourcing during 2021-22, the budget was considered a realistic budget.


The budget included an additional £3million, plus £1million in contingency funds for additional placement costs. This was unlikely to be sufficient given a combination of rising unit costs, an increased number of children in care from the impact of Covid-19 and the time required to deliver the sufficient strategy. Of the £11.5 million additional funding relating to Covid-19, it was felt that an element of this would be needed to fund Children’s Social Care Services.


A service improvement action plan was in place to recruit 40 new foster carers. The aim of this was to increase capacity and build on the support provided. In addition there was a new offer being developed for an Edge of Care Service to help families continue with their birth children. Supported by an external transformation consultant this would be an intensive family preservation service.


SEND funding was a complex issue, with a structural deficit of £8.4 million. This was a school owned deficit, not a County Council one with little opportunity for schools to absorb the overspend. The hope was that the current Government SEND review would provide a long term solution.


Emphasis had been placed on the importance of early intervention for children in care during the early stages of a child’s life. Early years provision had seen a significant improvement in school readiness.


Members noted that a scrutiny task group would be making recommendations for the development of the Youth Strategy. The strategy was not looking to reduce services but would be looking to provide universal and specialist services. A report would be considered by Cabinet in April.


Some members had suggested outreach youth work within local communities was a viable option and should be explored. It was also suggested that in-house provision should be considered. In response, it had been explained that the priority would be to look at what was in the best interest of the child. There was a balanced view on whether this should be provided from in house services or outsourced, where the County did not have provision.


Members stressed the importance of being proactive and preempting strategies to identify potential problems in order to prevent children reaching a point where they needed to be in care.


Generally, there were concerns about the potential spike in numbers of referrals resulting from the Covid-19 pandemic. Officers responded by stating that the spike had been anticipated and that analysis of the risks to the budget were carried out as part of the budget setting process.




In response to the update at this meeting, the committee noted the comments from the budget scrutiny meeting and acknowledged that DSG budget pressures in Gloucestershire reflected the national position, with significant deficits in the DSG high needs budget impacting on many local authorities nationally.


It was agreed that a High Needs Strategy would be essential to ensure the budget balanced in future years. It was confirmed that a spending review of services was in progress.


Responding to questions, the Finance Business Partner explained that, given the unknown impact of Covid-19, the forecast was subject to several assumptions, relating to; growth inactivity; delays in transitions; capacity in the fostering market; and the impact of opening of Trevone House to provide additional capacity for young people.


The assumptions would need to be reviewed on a monthly basis and adjusted accordingly. It was hoped that, from improving social care practice, diverting children from care at an earlier point and achieving permanence at the earliest opportunity, would help reduce the numbers of children in care and associated costs in the longer term.


The update was noted, with assurances that the estimates presented at the meeting were the best estimates, given the response to Covid-19. It was hoped effective lobbying of government would secure further funding from the DofE to help with the recovery process from the pandemic.


A member suggested that, to allow more time to consider financial updates, the revenue budget monitoring report be considered at an earlier stage of the meeting.


Dr Richard Castle, (Primary School Governor Representative), submitted the following supplementary questions after the meeting.


The questions, including responses from Finance Business Partner, Suzanne Hall, are detailed below: -  


Supplementary Questions


Reference the refund of Covid19-related expenditure to schools; if I understood correctly, it was suggested GCC had received full funding centrally from DfE, (my assumption was that this would now be passed on to schools).  However, it was suggested at the meeting that if schools had not received a refund, they should submit a case to the Government. 


Please confirm:


a)    If all Covid-19 related expenditure (for maintained schools in Gloucestershire) will be refunded through GCC and/or


b)    If this is not the case, how schools should appeal to Central Government?


Response: GCC has continued to fund schools at the budgeted level agreed at the beginning of the year.


The additional costs that schools have incurred for Covid-19 related pressures, (premises, free schools meals and cleaning), have been funded through a separate exceptional grant from the DFE to the end of the Summer term but there continues to be pressures on schools which have not been able to be claimed.


Detailed information can be found in the papers that went to Schools Forum meetings in September and November 2020, plus a letter that F40 (a group of the lowest funded Local Authorities that lobbies the DofFE for better funding) has sent.  


To view the September School Forum Papers, please refer to the link here


To view the November School Forum Papers, please refer to the link here


Schools to receive the catch-up premium: -


Ø  Mainstream school will get £80 for each pupil in from reception to year 11 inclusive.


Ø  Special, AP and hospital schools will get £240 for each place for the 2020 to 2021 academic year.


There was also support during the Autumn for supply staff costs if they had exceptionally high staff absence rates. Please refer to the following link: -


There was no cover for exceptional costs since the end of the summer term. Locally, we put in place the team around the locality model to provide early intervention support where there are vulnerable children that were struggling to access education.  The primary aim of this was to ensure multi-agency support, but funding is provided where necessary.

Supporting documents: