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MEETING ON 15 DECEMBER 2000 AT BLACKPOOL
REPORT OF THE CO-ORDINATOR
SUPPLEMENTARY REPORT ON THE 2001/02 FINANCIAL SETTLEMENT
1. Matter for Consideration:
The impact of next year's financial settlement on member authorities
2. Introduction:
The Local Government Minister has announced the 20001-02 settlement for local authorities. Though it is a more generous settlement than in previous years, there is nevertheless concern amongst members that it may still be insufficient to meet current needs, coming as it does on top of the financial crisis revealed by the recent ADSSNW/ SSNW survey , which is also reported to this meeting, A quick trawl of member authorities has thus been carried out , so that members of SSNW can judge what political response to make on behalf of North west authorities. The results are reported below.
3. Information:
3.1. The settlement for local government announced by Hilary Armstrong represents an overall increase above inflation, and there is a 'floor' so that authorities losing grant because of allocation formulae, would at least have some additional resources. The Chair and Deputy Chair accordingly called for this survey of the impact of the settlement on individual member authorities, so that the overall position in the Region may be reported back to this meeting.
3.2. It is clear from the responses of the nine member authorities that have responded so far, that the settlement will do little to ease the major financial pressures being experienced in social services. The situation is exacerbated by complications such as the cessation of the leaving care grant and the merger of community care grants.
3.3. Key points that emerge include:
· The impact on resources cannot be quantified clearly until more information and clarification is available about special grants (for instance leaving care and independence) and the conditions attached; this is hindering the budgetary planning process.
· The joining of Prevention and Partnerships Grants has caused concern, following a reduction of money available in real terms.
· There will not be enough money to allow for growth and improvement of services. Pay and pay increases could also be affected.
· Concern has been expressed by respondents about the funding situation beyond 2002, as this lack of certainty impedes the planning process, when it comes to meeting increased need and maintaining innovative and successful services.
· The continuing pressure of demand, particularly for children's services, is still causing great pressure.
· Changes to charging regimes, eg preserved rights changes, statutory guidance on home care charges, implications of 'free' nursing care are still unknown.
4. Recommendations:
4.1. That the report be noted
4.2. That members consider what action they wish to take regarding the concerns raised by member authorities
Appendix
2000/01 FINANCIAL SETTLEMENT
Individual Authority Responses
Authority A
Facing a number of pressures on the budget to maintain existing services as well as develop new grant related activity.
The settlement overall puts pressure on existing services which have to compete with other Council priorities.
Specific additional factors include Section117, the considerable pressures to actually manage the Health interface
and the pressures on the placement budget given the increasing average length of time in residential / nursing
care. The lack of clarity regarding conditions attached to grants and in particular the extra "independence"
monies being advised for one year only at this stage. Therefore a mix of good news with real concern and an urgent
need for improved information and clarification.
Authority B
Adjusted increase in SSA 2001/2 = £935,000 results in a shortfall of £398,000 due to inflationary pressures,
costs including increase in employer's superannuation, grant tapering (£200,000), increments and job evaluations.
(The council as a whole is also facing a potential budget shortfall).
Underlying budgetary pressures of £1.4 million allow nothing for growth and improvement, the main factors
being Children's services (Children Act payments, court fees and fostering / boarding out =£300,000) and
Adult services (community care, section 117 cases and home care =£575,000)
Social Services has been asked to look for savings of £ 670,000 with the result that a potential shortfall
of over £2 million is looming. The merger of partnership/prevention grants will cost the authority £186,000:
though some spending should be reduced, a shortfall is still likely.
Not clear how the share of the Winter Pressures' £100million will impact, and lack of information relating
to preserved rights and residential allowances.
Authority D
Significant concern about children's services budget reduction in SSA (and also about the longer term funding
of Quality Protects) The joining of the prevention and partnerships budgets has caused some reduction of money
but this has been offset by the authority's share of the £100million, however the reduction in the base level
erodes the value of this. Regarding the STG there is no plateau in sight, new clients are requiring care packages
at the same rate, those requiring care packages in their own homes are just as expensive.
Authority G
Awaiting more information so that they can assess the position, for instance in relation to Children's services
grants and the independence grants. This lack of clarity is hindering the budgetary planning process. The authority
is only getting 3.2% compared to 4.9% nationally - this relates to the adjusted SSA for 2001/02. In cash terms
there is a reduction of £85,000. If they can't match the leaving care grant to current spend they will have
a real problem, likewise with the independence grant. There is concern that there will be sufficient funds to cover
pay and pay increases. There are also continued overspends on children's agency placements and foster care. Fallout
of 2001/ 02 partnership grant and the independent sector demand for rate increases above inflation aren't helping
either.
Authority H
Adjusted figures show an overall increase of 2.9% and within social services of 3%. After allowing for anticipated
inflation of 2.5% this allows little room for improving Council services and falls far short of funding known committed
need within social services. The impact on resources cannot be quantified until the basis upon which the adjustment
for care leavers is provided, together with the level of specific grant. If spending does not reduce in line with
the SSA reductions then further budget pressure will occur. The introduction of a 'floors and ceilings'option is
welcomed and if adopted will dampen the year on year effect of changes in the settlement.
Authority J
Reduction in SSA: Lack of clarity again for instance re the transfer of Guardian ad Litem Services and Early Years
there is some concern about what will be removed. There is particular concern re the reduction in SSA for Care
leavers as the criteria for accessing the grant is not yet clear. There will be an impact on essential services
if current resources are not at least fully replaced by the grant given the size of reduction of SSA.
Promoting Independence: Great concern about the combination of Partnership and Prevention Grants as this left the
authority with a greater shortfall than expected. - the future allocation had been based on the proportion of
grant allocated in year one in line with DoH advice. As a result a shortfall in the Partnership Grant was expected,
along with an increase in the Prevention Grant; (the plan was to develop and deliver services using the increased
amount to avoid slippage). The value of the extra Promoting Independence Grant is seriously eroded (to about half)
taking into account the need to cover existing grant shortfall and projected commitments. This means there is less
for new services than claimed, and it is not at all clear how the department can manage the high expectations from
government about the use of this supposed "extra money". Neither do the funding announcements address
the very serious pressures on the budgets for Children's services due to a range of factors especially demand for
agency placements and increased numbers of children looked after.
The TSP has not significantly increased which is disappointing given the emphasis on the skilled workforce in the
Quality Strategy and the priority given to the National Strategy.
The funding of DipSW support is welcome but the 70/30 split funding makes this extremely difficult and puts pressure
on an already pressured resource.
There is great concern about the funding position beyond 2002. There is a need to start planning now, and the lack
of certainty over grant contribution or absorption into SSA causes some concern about the department's ability
to meet increased need and maintain some highly successful innovative services.
Authority L
The increase in the Personal Social Services SSA is lower than expected, resulting in a substantial reduction of
£150,00 for the Council. This has meant being unable to develop the Prevention Strategy and absorbing a real
terms reduction of £70,000 in the combined grant allocation; having an adverse effect on the schemes established
in the first year. The authority's share of the £100million additional resources nationally is £417,000
per annum and this will go some way to offsetting the above reduction, depending on the stringency of the grant
conditions. Is the £417,000 to be used for subsequent years' winter pressures schemes? This will have a
bearing on how the council uses the money. Again there is a lack of information and certainty about the permanency
of funding. The additional Charges on Homes Grant is welcomed, along with the Government's recognition of the level
of resource needed to monitor such charges. Further clarity is needed regarding the changes to the Care Leavers
Grant and it is hoped that the conditions attached to the new grant will allow flexibility. A substantial element
of the anticipated Quality Protects Grant has been redirected towards Care leavers and Children with Disabilities
and, coupled with amendments under the Promoting Independence Grant, it demonstrates a reduction in local flexibility.
Authority P
An overspend of £750,000 on the Children's Agency budget and this amount will be a growth item in the 2001/02
budget. - it will be necessary to find equivalent savings mainly in adult services. Because the Council has received
a poor settlement overall, social services may have to find additional savings/cuts. Because of the reduction in
Personal Social Services Children's SSA (about £800,000) due to the leaving care grant, even with savings
of above £750,000 the authority would be spending above SSA (the Council spends just under SSA this year)
so in real terms the social services will have a reduced budget next year despite continuing pressures on Children's
services and community care.
Authority X
This authority is concerned about: no guidance/information on free nursing care; greater than anticipated reduction
in partnership grant; Leaving Care Grant regulations not known; impact of increased capital limits not known; and
lack of investment for infrastructure for joint working with Health and other partners. This authority, like others,
is overspending heavily on Children's Services, particularly external placements, foster care and legal fees.
Authority Y
The overall settlement appears to be adequate, but it disguises a number of underlying problems.
Continuing increase in service demands, including the continuing requirement to pick up DSS transfers, are not
adequately reflected. The demand for services for learning disabled, physically disabled and mental health service
users are particularly high, and account for more than half the over-commitment but only 30% of the base budget.
The growth is also long-term.
Inflation running in excess of 3% and the settlement does not adequately reflect the pressures on residential and
especially nursing home fees. Requests for 10% increases are being made. The possible increase in the minimum
wage will only add to problems.
The tapering of Partnership Grant has eaten significantly into the SSA increase. The combining of Partnership
and Prevention Grants has led to a loss of £32m nationally. The 'additional' £100m for next year only
puts back what has been withdrawn from Partnership Grant over 2000/01 and 2001/02.
Specific grants limit local flexibility and the capacity to meet base budget pressures. Planning difficulties
arise from delay in publishing grant conditions.
This authority has lost 1.35% of budget through data changes (area cost adjustment), significantly adding to funding
problems.
There are still 'unknowns' including impact of preserved rights changes, statutory guidance on home care charges,
implications of 'free' nursing care.
Continuing increase in resources targeted at Health Authorities are not matched by similar increases for SSDs,
hampering change and service improvements across the social and health care sectors.
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