HERTFORDSHIRE COUNTY COUNCIL
ADULT CARE AND HEALTH CABINET PANEL
THURSDAY 15 JANUARY 2009 AT 10.00AM
ADULT CARE SERVICES STANDSTILL BUDGET 2009/10 – 2012/13
Report of Director of Adult Care Services and the Finance, Information and Commercial Services Director
Author: Iain MacBeath, Assistant Director Performance and Business Support
Tel: 01992 556363
Executive Member: Sally Newton (Adult Care & Health)
1. Purpose of the Report
1.1 To allow the Adult Care and Health Cabinet Panel to consider the standstill budget position, capital programme bids and strategic compasses for Adult Care Services. The appendices to this report provide information on:
· a standstill budget of £284.053 million for the Adult Care Services portfolio in 2009/10 (Appendices 1B & 1C).
· Capital Programme bids totalling £9.455 million, including annual provisions of £0.979 million (Appendix 2). Business cases for schemes can be obtained by contacting Chris May in Corporate Finance (01992 555325).
· Strategic Compasses for the service (Appendix 3).
1.2 To make recommendations / comments as appropriate. These will be considered by Policy and Resources Cabinet Panel on 15 January. Any comments/recommendations will be considered by Cabinet on 2 February 2009, along with the latest information on resources and the outstanding uncertainties. At its meeting on 24 February Cabinet will make its budget proposals. These will then be considered by each of the service panels, following which Overview and Scrutiny Committee on 12 February will make consolidated comments to Cabinet. Policy and Resources Cabinet Panel on 12 February will then consider any further comment from service panels or Overview and Scrutiny Committee and make recommendations to Cabinet. Cabinet on 16 February will recommend a budget to Council. The County Council will agree the budget and council tax level on 24 February.
APPENDIX 1
PORTFOLIO: ADULT CARE SERVICES
STANDSTILL REVENUE BUDGET 2009/10 - 2012/13
Chief Officers/Heads of Function: Sarah Pickup, Director of ACS (01992 556300)
Contacts for queries: Iain MacBeath, AD Performance and
Business Support
(01992 556363)
APPENDIX 1 - CONTENTS
A Commentary
B Standstill Revenue Budget 2009/10 – 2012/13 and Movement from Current Year’s Budget
C Pressures for Change & Savings
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Item 3 – ACS Standstill Budget 2009/10-2012/13
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APPENDIX 1A
COMMENTARY
1.1 This appendix outlines the inflation and cost pressures facing the service in 2009/10 and the medium term. This gives rise to a 2009/10 standstill budget for Adult Care Services, after efficiency savings, of £284.053 million (excluding capital charges and the FRS17 pension adjustment).
1.2 The cashable efficiency savings which have been identified by Executive Members and Chief Officers are summarised below with further details provided in Appendices 1B and 1C.
£’000Cashable Efficiency Savings
Full Year Effect of Previous Efficiencies - Value for Money / 2,274
Full Year Effect of Previous Efficiencies / 500
2009/10 Value for Money Savings / 6,799
2009/10 Other Savings / 300
Total / 9,873
APPENDIX 1B
REVENUE BUDGET 2009/10 – 2012/13
AND MOVEMENT FROM CURRENT YEAR’S BUDGET
ADULT CARE SERVICES
/ 2009/10£’000 / 2010/11
£’000 / 2011/12
£’000 / 2012/13
£’000 /
2008/09 Original Budget / 253,413 / 253,413 / 253,413 / 253,413
Technical Adjustments 2008/09 / 1,382 / 1,382 / 1,382 / 1,382
Technical Adjustments 2009/10 / 13,784 / 34,875 / 34,875 / 34,875
Adjusted Budget / 268,579 / 289,670 / 289,670 / 289,670
Inflation / 14,153 / 20,458 / 26,763 / 33,068
Base Budget / 282,732 / 310,128 / 316,433 / 322,738
Pressures for Change:
Demography:
(a) Older People / 2,187 / 4,974 / 8,194 / 11,414
(b) Learning Disability / 6,462 / 11,669 / 16,876 / 22,083
(c) Physical Disability / 888 / 1,776 / 2,664 / 3,552
(d) Mental Health / 860 / 1,720 / 2,580 / 3,440
Legislative Changes:
(a) Working Time Directive / 97 / 97 / 97 / 97
(b) Independent Safeguarding Authority - vetting & barring scheme / 3 / 3 / 3 / 3
(c) Immigration - Applications for Permission to Work / 4 / 4 / 4 / 4
Other Pressures:
(a) Business Rates / 3 / 6 / 9 / 9
(b) Local Government Pension Scheme / 559 / 559 / 559 / 559
(c) Revenue Effects of Telecom / 80 / 80 / 80 / 80
(d) Capital Payback / 55 / (8) / (36) / (178)
(e) Revenue Effects of Capital / 104 / 177 / 177 / 177
(f) Review in house provision with high unit costs / 340 / 340 / 340 / 340
(g) Meals on wheels / 85 / 170 / 241 / 241
(h) Supporting People VFM and Ineligible services / 467 / 933 / 933 / 933
Total Pressures for Change / 12,194 / 22,500 / 32,721 / 42,754
Funding From Specific Grant / (1,000) / (1,000) / (1,000) / (1,000)
STANDSTILL BUDGET BEFORE EFFICIENCIES / 293,926 / 331,628 / 348,154 / 364,492
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APPENDIX 1B (continued)
/ 2009/10£’000 / 2010/11
£’000 / 2011/12
£’000 / 2012/13
£’000 /
FYE of previous efficiencies (2008/09 & Prior Years)
(a) Individual Budgets for Older People / (500) / (500) / (500) / (500)
(b) Re-tendering Countywide Homecare Block Contract / (520) / (880) / (1,240) / (1,600)
(c) Re-tendering Homecare Block Contracts / (370) / (610) / (850) / (1,090)
(d) Individual Banded Budgets for Learning Disability / (180) / (360) / (540) / (720)
(e) Expert Purchasing of Care Placements for Learning Disability / (500) / (750) / (1,000) / (1,000)
(f) Extra Care Sheltered Housing / (100) / (200) / (300) / (300)
(g) Better procurement & Individual Budgets for Physical Disability / (100) / (150) / (200) / (250)
(h) PC Leasing / (4) / (4) / (4) / (4)
FYE of previous efficiencies (2008/09 & Prior Years) – Other
(i) Increase charges for Non-Residential Services / (500) / (500) / (500) / (500)
2009/10 Cashable Efficiency Savings - Value for Money
(a) HPFT to seek further efficiencies in delivering Mental Health services / (700) / (700) / (700) / (700)
(b) Restricting the increases in fees paid to care providers / (3,669) / (3,669) / (3,669) / (3,669)
(c) Equipment Retail Model / (500) / (750) / (750) / (750)
(d) Enabling Homecare / Intermediate Care / (750) / (750) / (750) / (750)
(e) Day Services Modernisation - Older People / (160) / (190) / (190) / (190)
(f) Extra Care Sheltered Housing / (400) / (400) / (400) / (400)
(g) Supporting People Administration Grant / (74) / (74) / (74) / (74)
(h) Supporting People General Grant / (546) / (546) / (546) / (546)
2009/10 Cashable Efficiency Savings – Other
(a) Additional Income / (300) / (300) / (300) / (300)
Total 2009/10 Cashable Efficiency Savings / (9,873) / (11,333) / (12,513) / (13,343)
STANDSTILL BUDGET AFTER EFFICIENCIES / 284,053 / 320,295 / 335,641 / 351,149
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Item 3 – ACS Standstill Budget 2009/10-2012/13
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APPENDIX 1C
PRESSURES FOR CHANGE/ £’000 /
Demography
(a) Older People
Around 55% of the ACS budget for older people is spent on the 85 and over age group, 34% on the 75 to 84 age group and 11% on the 65 to 74 age group. The projected increases in the numbers in these age groups have been used together with the estimated spends on these age groups to produce the year on year budget increases required to meet demographic pressures.
For 2009/10 the estimated impact of demography has been partly offset by £500k based on the 2008/09 half-year budget position. There is a risk attached in that this is a volatile care purchasing budget and assumes that there is no substantial peak in demand during winter 2008/09 and that self-directed support implementation delivers the required efficiency savings. / + 2,187
+ 4,974
+ 8,194
+ 11,414 / 2009/10
2010/11
2011/12
2012/13
(b) Learning Disability
The demographic pressure estimates for the Learning Disability client group has been based on a combination of the full year effects of the placements made and planned to be made in 2008/09 plus estimates of the number of net additional service users to be funded in the next four years. / + 6,462
+ 11,669
+ 16,876
+ 22,083 / 2009/10
2010/11
2011/12
2012/13
(c) Physical Disability
The projection for demographic pressures is based on the increase in costs and numbers of clients (especially for residential care) over the last few years. / + 888
+ 1,776
+ 2,664
+ 3,552 / 2009/10
2010/11
2011/12
2012/13
(d) Mental Health
The projection for demographic pressures is based on the increase in costs and numbers of clients (especially for residential care) over the last few years. HPFT has assisted in producing these estimates. / + 860
+ 1,720
+ 2,580
+ 3,440 / 2009/10
2010/11
2011/12
2012/13
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Item 3 – ACS Standstill Budget 2009/10-2012/13
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APPENDIX 1 C (continued)
£’000Legislative Changes
(a) Working Time Directive
In line with the amendments to the Working Time Regulations 1998, with effect from 1st April 2009 the holiday entitlement increases by 4 days from a minimum of 24 days to 28 days for temporary staff. / + 97 / 2009/10
onwards
(b) Independent Safeguarding Authority - vetting & barring scheme
The introduction of a new national Vetting & Barring Scheme will commence from October 2009. It will be a criminal offence for a person to work in a regulated position covered by the scheme without being registered and for an employer to employ them. Additional costs within services relate to the extra cost of registering new and existing employees. / + 3 / 2009/10
onwards
(c) Immigration - Applications for Permission to Work
New immigration legislation will come into effect from November 2008. A new annual licence will be required along with individual applications for permission to work. It is anticipated that each application will cost £190. / + 4 / 2009/10
onwards
Other Pressures
(a) Business Rates
This relates to the estimated additional costs arising from the
2006 revaluation of property for rating purposes. / + 3
+ 6
+ 9 / 2009/10
2010/11
2011/12
onwards
(b) Local Government Pension Scheme (LGPS) employer’s contributions
Estimated cost of the increase in employer’s contribution towards the Local Government Pension Scheme. / + 599 / 2009/10
onwards
(c) Revenue Effects of Telecoms
These are the authority’s revenue consequences of undertaking telecommunications capital works. / + 80 / 2009/10
onwards
(d) Capital Payback
Pay back associated with schemes funded by the general capital programme. / + 55
(8)
(36)
(178) / 2009/10
2010/11
2011/12
2012/13
/ £’000 /
(e) Revenue Effects of Capital
These are the revenue consequences of undertaking capital works within the agreed capital programme built into the cash target. / + 104
+ 177 / 2009/10
2010/11
onwards
(f)Review in house provision with high unit costs
The 2008/09 revenue budget included an efficiency saving of £350,000 following a review of in house provision with high unit costs. At unit level it seemed possible for this saving to be achieved.
To take forward the work to achieve the savings identified, a detailed, client by client needs analysis was undertaken. With this individual information we have looked at the availability of suitable alternative services in the market. It is now clear that a number of the service users have more complex and multiple disabilities than previously thought and their needs cannot be met easily using other providers. There are some service users fro whom suitable alternative provision could be made, but while a core of service users remains for whom there is no alternative provision it is not possible to significantly reduce unit costs. The current service must be re-provided on a different basis to give both short-term and long-term care to these people and plans are now in place to raise a capital bid to achieve this in a more efficient way. Therefore, apart from around £10,000 of staffing costs, the efficiencies in 2008/09 and future years will not be met. / + 340 / 2009/10
onwards
/ £’000 /
(g) Meals on Wheels
A reconfiguration of the meals on wheels service across the county has resulted in a social enterprise organisation providing the meals. Efficiency savings were projected based on a break-even model of charge against cost of service. This model was based on the participation of all Districts and on a fairly significant increase in charges. So far four districts have transferred services to the social enterprise and we have entered into transitional arrangements with them so they continue to offer subsidy to the service over 3 years. Charges have been increased, but not yet to match the cost of the service and negotiations are underway with other Districts regarding transfer to the new organisation. Over time, if more Districts transfer their service, the unit cost of meals should decrease and we can also raise charges over time but need to be careful not to affect take-up in so doing. The costs being incurred by the county council are significantly lower that would have been the case if districts had simply handed back existing services to the county as some planned to do, as it is our legal responsibility to provide this service. / + 85+ 170
+ 241
+ 241 / 2009/10
2010/11
2011/12
2012/13
(h) Supporting People VFM and Ineligible Services
As a result of the Value for Money exercise that was undertaken in respect of Supporting People schemes, services and parts of services have been identified that will be ineligible for Supporting People funding. The total of the ineligible services is estimated to be over £1.6m.
These ineligible Supporting People costs are being offset to some extent by re-tendering existing services and terminating existing contracts but costs of care which continues to be requires must be picked up through care budgets. / + 467
+ 933 / 2009/10
2010/11
onwards
Funded from Grant
(a) Social Care Reform Grant
Councils have been given a ring-fenced Social Care Reform Grant for three years 2008/09 – 2010/11. This money is provided to councils for funding development work to meet the national self-directed support policy agenda and associated commissioning activity. A number of permanent posts funded from ACS revenue are already in place to complete this work and can be legitimately funded from the grant, thereby releasing the revenue. There is a risk associated with this option in that it cannot be guaranteed that the grant-funding will continue beyond 2011 and these are permanent posts. / (1,000) / 2009/10
onwards
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