Invest to Save Proposals to Improve Foster Care Provision in Hertfordshire

HERTFORDSHIRE COUNTY COUNCIL

CABINET

MONDAY, 19 OCTOBER 2009 AT 2.00 P.M.

‘INVEST TO SAVE’ PROPOSALS TO IMPROVE FOSTER CARE PROVISION IN HERTFORDSHIRE

Report of the Director of Children, Schools Families

Authors:Jonathan Fisher(Tel: 01992 588043)

Ian Knowles(Tel: 01992 555792)

Executive Member: Jane Pitman, Children’s Services

1.Purpose of Report

1.1This report seeks Cabinet approval to use a current year underspend of £933,000 in the Children, Schools & Familiesfostering allowances budget, to provide the additional expenditure required for establishing an ‘invest to save’ scheme to improve in-house foster care provision in Hertfordshire. Significant savings in the overall expenditure on placements for children looked after (CLA) are projected over a five year period arising from this scheme.

2.Summary

2.1The Hertfordshire Children and Young People’s Plan (CYPP) has listed, as one of its priorities,‘that children and young people achieve their potential whilst in and moving on from care’. One of the success criteria within this priority is that CLA have a choice of placements that meet their needs. To achieve this objective, up front investment is required to increase the number and range of the County Council’s (‘in-house’) foster carers. In order to recruit foster carers over and above the current numbers achieved annually will require additional staffing capacity (including supervising social workers), for the assessment and approval process for mainstream, respite, specialist and family and friends carers (including private fostering). The outcome from this investment will be a reduction in the use of placements for CLA with Independent Fostering Agencies (IFAs), and an associated reduction in the cost of CLA placements overall. The proposals also include the use of ‘The Lakes’ Adolescent Resource Centre (ARC), which was established through a Private Finance Initiative(PFI) scheme, as part of ‘Intensive Fostering’ packages for young people aged 11-19. A proportion of the additional investment will be used to commission services from the ARC for this purpose. The proposals are underpinned by a clear business case, which is summarised in section 5 and set out in full in Appendix A of the report.

3.Recommendation

3.1That Cabinet approve the use of a projected underspend of £933,000 in the Children, Schools & Families Placement and Provider budget for 2009/10, to fund the ‘invest to save’ programme to improve in-house foster care provision in Hertfordshire, as set out in section 5 of the report and on the basis of the business case set out in Appendix A of the report.

4.Background

4.1The ‘Care Matters’ White Paper in 2007 identified the need to provide local placements for children and young people who require alternative living arrangements as a key priority for local authorities in commissioning placements for CLA. This is reflected in the associated legislation in the Children and Young People Act 2008. The expectation is that local authorities make every effort to support children and young people within their wider family and community if they are unable to remain with their birth family. Placements with foster carers or within residential provision should be made within a 20 mile radius of the child or young person’s home whenever possible. This national priority is reflected in the Hertfordshire CYPP, which, under Priority 2, includes action to ensure that CLA have the choice of a range of placements to meet their needs. To give effect to this priority, there is a need to increase the number of ‘in-house’ foster carers available locally, to provide more specialist foster carers, and to encourage the use of family and friends care.

4.2At present there are 1,069 CLA in Hertfordshire; 47.4% are placed with ‘in-house’ foster carers and 13.3% with IFAs. Family and friends care accounts for 10.8% of CLA. The number of CLA has increased over the past twelve months with an increasing reliance on IFAs because there are insufficient ‘in-house mainstream and specialist foster carers. Family and friends care, although increasing, requires significant further development. The lack of in-house placements has meant that costs for CLA have increased and represent a significant proportion of the current overspend in the CSF Children’s Services budget. An increase in ‘in-house’ placements will lead to better outcomes for CLA and a reduction in overall expenditure.

4.3Care Matters advocated Intensive Fostering accompanied by multi-agency therapeutic support as particularly effective provision for CLA with the most complex needs. Hertfordshire has re-provided and refurbished six children’s homes using PFI funding. As part of the scheme, an ARC is being opened at ‘The Lakes’ in Welwyn Garden City. The ARC has been commissioned to provide an intensive multi-disciplinary ‘wrap around’ service for young people aged 11-19 who have complex needs. It would have the capacity to enable CLA with the most complex needs to access services provided from the ARC along with placement with specialist foster carers who would be members of the multi-disciplinary team.

4.4CLA numbers in Hertfordshire have risen over the past year. A number of strategies are in place to reduce the incidence of children being taken into care over time. As Care Matters has identified, there will always be children for whom care is the best outcome to remove them from significant harm and improve their life chances. That being the case, the placement planning and financial assumptions in this scheme cannot override decisions in the best interests of the child that may need to be made in particular circumstances.

5.Improving In-House Fostering Provision: The ‘Invest to Save Scheme’

5.1Recruitment Targets

Investment in additional staffing capacity (including supervising social workers) to recruit, assess, train and appoint mainstream, specialist and family and friends carers is proposed so that by 2014, the proportion of CLA placed with ‘in house’ foster carers would increase from 47.4% to 50.4%. Over the same period, there would be an expansion in family and friends care placements from 10.8% to 19.4%. The proportion of IFA placements would reduce from 13.3% to 4.7%, with a reduction also experienced in independent residential placements. The specific targets for increasing in-house foster carers,to be achieved over a five year period, are set out in the tables below and take account of projected annual turnover.

MAIN STREAM CARERS
Baseline 367 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14
Recruitment target / 72 / 63 / 55 / 51 / 48
Predicted Turnover / 38 / 39 / 42 / 43 / 44
Net gain / 34 / 24 / 13 / 8 / 4
TOTALS / 394 / 418 / 431 / 439 / 443
RESPITE CARERS
No. at 31/03/09 –
Baseline for teenagers 0 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14
Recruitment target / 8 / 12 / 13 / 12 / 9
Predicted Turnover / 0 / 2 / 3 / 4 / 5
Net gain / 8 / 10 / 10 / 8 / 4
TOTALS / 8 / 18 / 28 / 36 / 40
SPECIALIST CARERS
Baseline 2 / 2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14
Recruitment target / 6 / 9 / 8 / 8 / 8
Predicted Turnover / 0 / 2 / 3 / 4 / 5
Net gain / 8 / 7 / 5 / 4 / 3
TOTALS / 8 / 15 / 20 / 24 / 27
FAMILY & FRIENDS CARE
Baseline 79 / Yr 1 / Yr 2 / Yr 3 / Yr 4 / Yr 5
Recruitment target / 55 / 50 / 50 / 50 / 50
Predicted no. ‘moving on’ / 16 / 24 / 29 / 34 / 36
Net gain / 39 / 26 / 21 / 16 / 14
TOTALS / 118 / 144 / 165 / 181 / 195

5.2Additional Staffing and Capacity

The delivery of these ambitious recruitment targets for in-house foster carers requires an increase in the staffing establishment of the Fostering Service from 69.96 full-time equivalent (FTE) posts to 95.91 FTE. The additional posts are frontline rolesin the Fostering and Family and Friends Care teamsto train, assess, monitor and support the foster carers recruited. There are associated external assessment costs for each foster carer recruited, and these costs are built into the overall business case.The associated costs for the approval of potential carers at the Fostering Panel are also built into the business case.Details of overall staffing costs and the additions to the staffing establishment are at Annex3 of the Business Case.

6.Financial implications

6.1This proposal seeks to reduce the overall expenditure on the placement of CLA by increasing the use of lower cost in-house foster care placements. The table below shows the expected profile of placement types assuming the current CLA level of 1069 remains static. The overall impact would be a reduction in CLA placement costs of £2.285m by 2013/14.

Table : Analysis of Changes in Placement Type

Type of Carer / Starting Point
No of Carers / Number of Placements August 2009 / Planned no. Carers 2013/14 / Planned no. full year placements 2013/14 @ 85% / Capacity no. of Placements 2013/14 100%
Mainstream / 367 / 505 / 443 / 516 / 607
Specialist / 0 / 2 / 27 / 23 / 27
Family & Friends / 79 / 115 / 195 / 207 / 244
Independent Fostering / 142 / 50 / 50
Independent Residential / 108 / 76
In-House Residential / 28 / 28
Secure / 3 / 3
Semi independent / 114 / 114
Pre-Adoption / 52 / 52
Total / 1,069 / 1,069

6.2The Business Case at Appendix A shows that we expect the scheme to be self-financing from the existing budgets of the Placement and Provider Service, once an initial investment has been made in the current financial year. The investment of £933k in 2009/10 would cover the delivery of Intensive Fostering packages and multi-disciplinary therapeutic support through the ARC and the first phase of staffing enhancements in the Fostering Service. In subsequent years, it is intended that additional staff be appointed to reflect the increase in foster carers recruited, offset by increases in savings. The details of the additional staffing are set out in Annex3 of the business case. The use of an underspend in foster carer payments has been identified as a source of this initial investment. Member approval to the virement of £933,000 is required.

6.3The savings identified in this proposal assume only an 85% occupancy rate for In-house mainstream carers, which dampens the impact on the actual number of placements in future years. This is an attempt to reflect the turnover in these placements and their often short term nature. It also recognises the need for an appropriate mix of carers to meet the range of children’s and young people’s needs.

6.4A key risk to be noted is that CLA numbers may increase, in which case, whilst overall CLA placement costs would rise, the success of this project would be measured by the successful re-distribution of placements and an overall lower unit cost for all foster care placements.

6.5Progress against this business plan will be monitored as part of the CSF Board’ monthly performance monitoring and decisions to maintain the investment will be subject to the continuing success of the programme.

7.Conclusion

7.1Evidence nationally about the outcomes for CLA indicates that many thrive best in community-based placements that are appropriate to their needs and within a reasonable distance of their existing family and community networks. The proposals in this ‘invest to save’ scheme will enable CSF to offer a choice of ‘in-house’ foster placements that meet these requirements, as well as lowering the overall cost for the placement of CLA.

Background papers

‘Care Matters’ White Paper 2007

Hertfordshire Children and Young People’s Plan (CYPP)

Children and Young People Act 2008

APPENDIX A – BUSINESS CASE

Business Case

The Development of the In-house Foster Care Service.

Background

The current level of Children Looked After (CLA) has reached 1069 as at 31/8/09. The distribution of the placements for these children and young people is shown in the table1.

Table 1: Analysis of Changes in Placement Type

We have seen the number of In-house foster Carers reduce over the last 18 months to 367 as a result of the aging cohort of carers and increasing regulation over the suitability of potential carers.

As a consequence, as the level of CLA has increased, there has been an increased use of independent placements and low cost residential provision.

The current cost of an In-house Placement is £316 per week (pw) compared to the current average cost of Independent Foster Agencies of £747 pw.

Invest to Save Proposal

Using the cost comparison above it is clear that we can reduce our overall expenditure by maximising the use of In-house Foster Care provision. It is recognised that outcomes for CLA are improved by remaining close to their existing family and friends network and within their communities.

Therefore,this proposal focuses on the development of family andfriends carers within Hertfordshire and proposals to enhance the support capacity for this carer type. In addition, we will increase the number of in-house specialist carers and offer support from the Adolescent Resource Centre (ARC). With the specialist therapeutic support available from the ARC we expect increasing success with the more complex cases within the CLA Cohort and an increase the potential for supporting families prior to family unit breakdown.

Annex 2 provides details of the assumptions made within each carer type. A summary of the growth in numbers is provided table 2.

Table 2: Analysis of Numbers of Types of Carers

Type of Carer / Number of Carers
Starting Point / Year 1 / Year 2 / Year 3 / Year 4 / Year 5
Mainstream / 367 / 394 / 418 / 431 / 439 / 443
Respite for Teenagers / 0 / 8 / 18 / 28 / 36 / 40
Specialist Carers / 2 / 8 / 15 / 20 / 24 / 27
Family & Friends / 79 / 118 / 144 / 165 / 181 / 195
Total / 448 / 528 / 595 / 644 / 680 / 705

This proposal will change the placement type profile as shown in the table 1. A prudent approach has been taken in calculating the conversion of carers to placements by using an 85% occupancy rate for mainstream carers which means that whilst the number of carers increases as a result of this proposal, the level of placements at anyone time does not increase in similar volumes. We have therefore shown the capacity level expected to be achieved by the end of the project in table 1.

Benefit Realisation

The benefits of this proposal include:

1 - Improved outcomes for children and young people by offering placements closer to their existing friends, family and community networks;

2 – A reduction in the overall cost of placements to the County Council.

3 – Improved alignment with current national thinking on the delivery of better outcomes for children looked after

4 – Improved management information and monitoring of the overall placement strategy

Whilst delivery of these benefits will be the responsibility of the CSF Board through the Deputy Director for Children and Families, its success will form part of the performance agreement for the Head of Placement and Provider Services and the Head of Fostering Services.

Annex 1 sets out the financial benefits of this proposal which anticipates a saving in 2013/14 of £2.284m.

Resources

This proposal will cost £933k in the current year after anticipated savings. Annex 1 shows a breakdown of the costs to be incurred and the funding available from existing budgets. It is anticipated that savings of £326k will be achieved in this financial year and the amount of £933k will be provided by a virement from the underspend in the foster carer payments budget.

The increased funding will secure a re-structured fostering service with an increased Friends and Family (Kinship) team. Following Cabinet approval, the appropriate people management policies will be followed. The proposal has an overall increase in staffing of 25.95 whole time equivalent (WTE) employees over the planning period although this is subject to the increase in carers being achieved. Annex 3 provides the WTE in staff numbers alongside the costs of the areas of expenditure It should be noted that the proposal uses a range of placement to carer ratios shown in Annex 2 to establish the total capacity being created however a prudent assumption of 85% occupancy has dampened the maximum saving achievable.

Annex 1 also sets out the savings expected to be achieved from each of the placement types and shows that the project will more than cover its own costs from 2010/11 onwards. These savings are based on comparing the current average cost of an independent placement with the cost of in-house provision.

In the current year the vired resources will be used to restructure the fostering teams, enhance the recruitment team capacity and implement a marketing strategy. In addition, the funding will support the set up of the ARC to provide therapeutic support to specialist foster carers.

Annex 1 shows that in future years the project will cover its costs by reducing the reliance on independent foster agencies.

Savings and Placements

The savings reflected in Annex 1 and supported by the assumptions in Annex 2 are based on the average cost of Family and Friends being £141 per week compared with the average cost of an independent placement being £746 per week. As the most significant increase in placements will be with Family and Friends carers this will be the most significant risk within the project.

The savings in the Annexes are based on modelling. What we actually expect to see happen during in this planning period is that placements will flow from In-house mainstream carers into the family and friends category whilst the In-house placements will allow reduced use of independent foster agencies. However, as a prudent measure we have used an 85% occupancy rate which means the expected increase of In house mainstream placements shows only a 3% increase, whilst the number of actual carers is expected to increase by 20%. This suggests that if the level of occupancy is higher the savings would be greater.

ANNEX 1

Placement and Provider Strategic Plan / at 85% Occupancy / Specialist Replaces High Cost IFPs
Financial Implications
2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14
Cost of Proposals / (£) / (£) / (£) / (£) / (£)
Cost of running ARCs / 600,094 / 977,416 / 977,416 / 977,416 / 977,416
Cost of Running Datchworth / 744,000 / 785,000 / 894,000 / 517,000 / 517,000
Cost of Independent Placements required to cover Closure of Durrants Hill Road / 814,000 / 814,000 / 814,000 / 814,000 / 814,000
Annualised Cost of Residential Homes / 455,000 / 455,000 / 455,000 / 455,000 / 455,000
Cost of Closed Homes / 230,458 / 104,234
Step 33 / 205,000 / 205,000 / 205,000 / 205,000 / 205,000
Fostering Service / 3,120,567 / 3,749,623 / 3,829,951 / 3,906,328 / 3,930,754
Total Cost of Proposals / 6,169,119 / 7,090,273 / 7,175,367 / 6,874,744 / 6,899,170
Funding Available
Current Fostering Teams / 2,805,315 / 2,805,315 / 2,805,315 / 2,805,315 / 2,805,315
Residential Homes Budget Virement / 1,917,512 / 1,917,512 / 1,917,512 / 1,917,512 / 1,917,512
Step 33 / 97,000 / 97,000 / 97,000 / 97,000 / 97,000
Funding From CAMHS / 90,000 / 90,000 / 90,000 / 90,000 / 90,000
Total Funding Available / 4,909,827 / 4,909,827 / 4,909,827 / 4,909,827 / 4,909,827
Shortfall / 1,259,292 / 2,180,446 / 2,265,540 / 1,964,917 / 1,989,343
Additional Cost of Fostering Service / 315,252 / 944,308 / 1,024,636 / 1,101,013 / 1,125,439
Potential Savings and Costs Associated with Planned Recruitment of Carers by Carer Type
2009/10 / 2010/11 / 2011/12 / 2012/13 / 2013/14
(£) / (£) / (£) / (£) / (£)
Sum of Potential Savings Mainstream Carers / -166,779 / -1,049,073 / -1,568,407 / -1,860,501 / -2,031,050
Sum of Potential Costs Respite / 24,537 / 75,857 / 134,989 / 187,578 / 219,128
Sum of Potential Costs Respite (Specialist) / 25,483 / 50,966 / 50,966 / 50,966 / 50,966
Sum of Potential Savings Specialist / -65,758 / -227,897 / -361,395 / -461,755 / -540,433
Sum of Potential Savings Family &Friends / -144,144 / -470,989 / -705,305 / -891,105 / -1,039,787
Total Potential (Savings) / -326,662 / -1,621,137 / -2,449,153 / -2,974,816 / -3,341,176
Total Potential (Savings) / Shortfall / 932,630 / 559,309 / -183,613 / -1,009,899 / -1,351,833
Potential Virement from Fostering Support Underspend to Fund Proposals / 933,000 / 933,000 / 933,000 / 933,000 / 933,000
Overall Potential (Savings) / Shortfall / -370 / -373,691 / -1,116,613 / -1,942,899 / -2,284,833

ANNEX 2a