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Children, Culture and Communities Scrutiny Committee |
3 December 2024 |
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Report of Richard Hartle, Head of Children & Education Finance and Ian Cunningham, Head of Business Intelligence |
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2024/25 Finance and Performance Monitor 2
Summary
1. This report sets out the projected 2024/25 financial position and the performance position for the period covering 1 April 2024 to 30 September 2024. This is the second report of the financial year and assesses performance against budgets, including progress in delivering the Council’s savings programme.
2. This report outlines the Council’s continued challenging financial position with a forecast overspend for 2024/25 of £2.7m which is a huge improvement on the c£11m forecast overspend we have previously seen at this stage in the financial year. There has also been an increase in the forecast for Adult Social Care, and the forecast also assumes we can release some earmarked reserves to offset the overall position.
3. However, this is still a forecast overspend and therefore, whilst it is incredibly positive that the position is much improved, there remains a great deal of work still to do. It remains clear that the Council cannot afford to keep spending at this level. The general reserve is £6.9m and, whilst we have other earmarked reserves that we could call on if required, continued overspending will quickly see the Council exhaust its reserves.
4. As outlined in previous reports, the existing cost control measures remain in place, and further action is needed to bring spending down to an affordable level, both within the current financial year and over the next 3 years, to safeguard the Council’s financial resilience and stability. The impact that this work is having can be clearly seen in this latest forecast and the Council’s track record of delivering savings, along with robust financial management, provides a sound platform to continue to be able to deal with future challenges.
5. If we continue to take action and make any difficult decisions now, this will ensure the future financial stability of the Council and that we can continue to provide services for our residents. It is vital that mitigations are delivered, and the forecast overspend is reduced.
6. The Council implemented a garden waste subscription scheme in August 2024 (this was charged on a pro-rata basis). In 2025, the garden waste subscription service will run for the full 40 week season for 40 weeks (operating from Monday 3rd March to Friday 5th December). The Council will contact subscribers early in the New Year to advise of the 2025 subscription fee and with instructions on how to purchase their licences. As this is before budget council it is necessary to agree the fee in advance. For the 2025/26 financial year, it is proposed that the charge for 2024/25 will be £49. This is expected to produce an additional £100k compared to the current fee which will support overall savings. The service also hope to expand the subscription scheme in 2025 to some new build housing estates that were never previously served by a kerbside garden waste collection service (e.g. Langley Gate development etc).
7. Local government continues to be in challenging times, with worsening performance in a number of sectors nationally. The majority of performance indicators chosen to support and monitor the Council Plan in York, continue to show a generally positive and stable trend against this difficult financial picture and shows the hard work from staff, partners and the city to tackle these challenges.
8. This set of indicators are the high-level measurable element of our performance framework, and in newly available data up to Q2 there has been positive performance in areas such as; Health inequalities in wards where we have seen further improvements in the expected level of development in children at 2-2.5 years, the number of children in temporary accommodation continues to be lower than previous years, our building services indicators continue to show a positive direction of travel with a high percentage of repairs completed on first visit alongside the low number of void properties and an increasing percentage of dwellings with an energy rating in the A-C band in the EPC register, and the number of FOIs, EIRs, and Complaints responded to in-time show positive performance at responding to customers in timely manner.
9. Alongside the Council plan indicators there are a number of areas of positive performance from across the Council. Nearly 39,000 eligible households in York have now subscribed to the new Garden Waste Subscription scheme, which is 55% of eligible households and above the initial target of 33,000 households. The cities Purple Flag Status was renewed in Summer 2024, recognising the high standards in safety, diversity, cleanliness and vibrancy and recent Tourism data is very positive and shows that hotel room occupancy was 85% in July and footfall in the city centre was over 750,000 visits in August. The Corporate Improvement Framework which builds on existing strengths with a view to continuous improvement being central to how the council operates has shown recent positive trends in the continued reduced spend on agency staff, a high percentage of FOIs, EIRs, and Complaints responded to in-time, and a wide variety of ideas received in response to the new staff ideas system.
10. To support our most vulnerable residents we have been Preparing for statutory inspections such as any future CQC inspection of the Adult Social Care system in York. New performance management information has been made available to the service on waiting lists and timescales for assessments to help the service on its improvement journey, and there has been positive feedback from customers shown by the low numbers of complaints received in this area and improved Joint working, where there has been an increase this financial year in the number of people in receipt of adult social care packages that are jointly funded under Continuing Health Care or Vulnerable Person Unit provision by the NHS and CYC, to around 250 people.
11. Population predictions and data from POPPI/PANSI show that there is going to be a higher % of older people and individuals with learning needs in York in forthcoming years. In response to this and other challenges, City of York Council has agreed Specialist housing for disabled adults or adults with learning disabilities where 14 new homes in Acomb to meet the need for specialist housing for disabled adults or adults with learning disabilities in the community have been agreed, and a new SEND Hub for children and young people with special educational needs at Clifton Children's Centre was approved in September. The hub will bring together professionals from education, health and social care to provide families with advice and support, reducing unnecessary assessments and waiting times, and help to tackle the rising requests for EHCP assessments in York (188 in the first 5 months of 2024-25) and the number of children and young people with an EHCP (1,436 at the end of June 2024).
12. Over £2.4m has been secured to help fund a new 24/7 adults Mental health hub in York over the next two years, run by a team of NHS and volunteer staff, offering support with no referral required. This will help to tackle a number of areas; recent data shows a reduction in the number of suicides in York in the most recent three-year period, compared to the previous period, and the overall number of households in temporary accommodation in York has reduced during 2023-24 with York continuing to perform positively compared to benchmarked authorities. Childcare reforms have been announced and a report was presented to Executive in September 2024 on the commissioning of new and expanded places for childcare reforms to help parents with early years childcare and provide more children with access to high quality early years education. In 2023, KS4 data showed strong performance for York pupils compared with national averages and a high proportion of 5 year olds achieved a good level of development compared to national and regional averages. However, challenges remain as the gap between disadvantaged pupils and their peers at KS4 widened in York and nationally, and a legacy of Covid-19 is that school attendance of disadvantaged groups continues to be slower to recover.
13. We are listening to residents within Our Big Budget Conversation, a consultation on budget priorities taking place over 4 stages during 2024-25 with stage 2 concluding at the end of Q2 with over 1000 responses. The annual Tenant Satisfaction survey was sent to all council tenants in September 2024, where over 7000 households have been asked about their views on services. York remains committed to improving stock condition and tenant experiences, and results from the 2023-24 Regulator for Social Housing return are due for publication on the York Open Data platform in November 2024.
Background
Financial Summary and Mitigation Strategy
14. The current forecast is that there will be an overspend of £2.7m. This is despite the additional budget allocated through the 2024/25 budget process and ongoing action being taken by managers across the Council to try and reduce expenditure. Of particular concern, is the increase in forecast overspend across Adult Social Care, where the predicted outturn has increased by £2.4m. However, actions are being taken within the directorate to mitigate against this increased forecast overspend.
15. If the Council continues to spend at the current level, and no action is taken, then we will continue to overspend and will exhaust our reserves and any other available funding. The current level of expenditure is unaffordable and therefore we must continue the work started in the previous financial year to identify and take the necessary actions to reduce expenditure.
16. As outlined in previous reports to Executive, we have continued to see recurring overspends across both Adult and Children’s Social Care. However, the underspends and mitigations that have allowed us to balance the budget at year end have generally been one off. Whilst the use of reserves to fund an overspend is appropriate as a one-off measure, it does not remove the need to identify ongoing savings to ensure the overall position is balanced. The budget report considered by Executive in February 2024 also included an assessment of risks associated with the budget, which included the need to secure further savings and effectively manage cost pressures.
17. Members will be aware that the financial position of local government is a national challenge and that the pressures being seen across both Adult and Children’s Social Care are not something that is unique to York. Many Councils are experiencing significant financial pressures and struggling to balance their budgets now, so it is vital that we continue the work started last year to reduce our expenditure down to a sustainable level both within the current financial year and over the medium term.
18. On 30th October, the Chancellor announced the first budget of the new Government. Whilst we will need to await the draft local government settlement in December for detailed allocations of any funding to York, there was a confirmation that there are plans to reform local authority funding (especially distribution) in 2026/27 “to ensure it reflects an up to date assessment of need and local revenues”. This is both an opportunity and a risk to our medium term finances, given our position as one of the lowest funded councils in the country.
19. Given the scale of the financial challenge, and the expected impact on budgets in future years, it is vital that every effort is made to balance the overall position. It is recognised that this will require difficult decisions to be made to protect services for vulnerable residents.
20. Corporate control measures are in place, but it is possible that they will not deliver the scale of reduction needed within the year. Other savings proposals, including service reductions, may also be needed. Officers will continue to carefully monitor spend, identify further mitigation, and review reserves and other funding to make every effort to reduce this forecast position. However, it is possible that it will not be reduced to the point that the outturn will be within the approved budget. The Council has £6.9m of general reserves that would need to be called on if this were the case. As outlined in previous reports, any use of the general reserve would require additional savings to be made in the following year to replenish the reserve and ensure it remains at the recommended minimum level.
21. The delivery of savings plans continues to be a clear priority for all officers during the year. Corporate Directors and Directors will keep Executive Members informed of progress on a regular basis.
Financial Analysis
22. The Council’s net budget is £149m. Following on from previous years, the challenge of delivering savings continues with c£14m to be achieved to reach a balanced budget. The latest forecasts indicate the Council is facing net financial pressures of £2.7m and an overview of this forecast, on a directorate by directorate basis, is outlined in Table 1 below.
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Service area |
Net budget £’000 |
2024/25 Forecast Variation £’000 |
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Children & Education |
28,659 |
1,111 |
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Adult Social Care & Integration |
45,307 |
3,286 |
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Transport, Environment & Planning |
23,464 |
-610 |
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Housing & Communities |
6,614 |
790 |
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Corporate & Central Services |
44,648 |
-132 |
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Sub Total |
148,692 |
4,445 |
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Contingency |
576 |
-576 |
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Use of earmarked reserves |
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-1,089 |
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Total including contingency |
149,268 |
2,780 |
Table 1: Finance overview
Directorate Analysis
Children and Education
23. The forecast outturn position for the services covered by this committee is an overspend totalling £1,432k and the table below summarises the latest forecasts by service area.
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2024/25 Monitor 1 Variation £000 |
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2024/25 Latest Approved Budget |
2024/25 Projected Outturn Variation |
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Gross Spend £000 |
Income £000 |
Net Spend £000 |
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£000 |
% |
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Children & Education |
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+1,396 |
Children’s Safeguarding |
25,659 |
1,149 |
24,510 |
+1,033 |
+4.2% |
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+3 |
Education & Skills |
19,073 |
5,026 |
14,047 |
+135 |
+1.0% |
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-19 |
School Funding & Assets |
176,104 |
181,836 |
-5,732 |
-35 |
-0.6% |
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-22 |
Director of C&E & Central Budgets |
1,685 |
5,851 |
-4,166 |
-22 |
-0.5% |
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+1,359 |
C&E Directorate Total |
222,521 |
193,862 |
28,659 |
+1,111 |
+3.9% |
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+333 |
Culture & Communities |
13,262 |
6,479 |
6,783 |
+321 |
+4.7% |
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+1,692 |
CC&C Scrutiny Total |
235,783 |
200,341 |
35,442 |
+1,432 |
+4.0% |
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24. For Children & Education, the overspend of £1.1m that is being projected at this monitor, whilst still a concern, represents a significant and continuing improvement in the financial position of the directorate. At the same stage in 2022/23 the projected unmitigated overspend stood at £8.7m, reducing to £4.6m in 2023/24. This reflects the considerable progress that has been made within the directorate to manage spend in a number of key areas, particularly; agency staffing, high cost placements and home to school transport.
25. As previously reported, the number of Children Looked After (CLA) in York has consistently been at a higher level than the budget was built to accommodate. The number at the beginning of the financial year was 243, at the end of July it was still 243. Placement budgets are predicted to be overspent by a total of £914k. The pressure on this budget is partly due to the limited market for children’s placements and the statutory requirements placed on local authorities to meet children’s needs, coupled with inflationary pressures which could continue to worsen the position. Total growth of £1,647k has been allocated to the placements budgets in 2024/25.
26. Safeguarding Interventions is predicted to underspend by 67k due to staffing vacancies. In addition, legal fees are predicted to overspend by £135k.
27. An overspend in Disabled Children’s Services of £476k is mainly overspends on direct payments. A specific project for direct payments is being carried out, and this is predicted to clawback some of previous payments made and reduce ongoing costs.
28. Innovation and Children`s Champion is predicted to underspend by -£160k (-£137k in 2023/24). This is due to the ability to fund some expenditure from the Family Hubs grant & Family Seeing Grant.
29. The Home to School Transport budget, which has been in an overspend position for a number of years, has been allocated £730k of growth for demographic pressures and contract inflation.
30. At this point in the financial year, an overspend of £50k is predicted. This is a change from Monitor 1 as there has been an amendment to the projected taxi expenditure to take account of the increased number of days in the 2024/25 financial year when transport will be required. This is due to the Easter break for 2025 being wholly in the financial year 2025/26. The impact of this is an extra five days of transport in 2024/25 at an estimated cost of £65k. This increase has been offset by a lower than assumed taxi cost by £15k in July 2024.
31. The projected outturn includes an estimate of likely contractual inflation from 1st September 2024, and the final increase will be dependent on the relevant indices at that point. In addition, at this point in the financial year, the financial impact of changes for the new academic year are not known until all eligible pupils have their travel arrangements confirmed in September so this position could change once all new academic year information on cost is available.
32. Staff resourcing issues and turnover in the SEND Statutory Services Team, and the need to resource work to progress the Safety Valve targets have continued and resulted in the need to appoint a number of agency staff and also increase supporting resources, resulting in a predicted overspend of £65k based on current staffing assumptions.
33. The Educational Psychologists Service is now predicted to overspend by £57k. This is a change from the position previously reported (an underspend of £65k due to continuing vacancies in the team) and is because of the need to commission external agency support to clear a backlog of assessments at a cost of £122k.
34. The Effectiveness and Achievement Service and the Skills Service are both predicted to outturn at or very close to budget.
35. An overall underspend of £49k is now predicted within the Virtual School and Inclusion service, due to a vacancy, one-off savings in non-staffing expenditure and additional grant funding supporting already committed expenditure.
36. The Dedicated Schools Grant (DSG) is ahead of the target position set out in the Safety Valve recovery plan agreed with the DfE. The local authority is now in the third year of this four year agreement and has exceeded the financial targets for the first two years.
37. The brought forward balance on the DSG as at 1 April 2024 was a deficit of £291k. The initial year end projection for 2024/25 is for a cumulative deficit of approximately £780k, although this is subject to change as new academic year details of provision are confirmed. This increased deficit is despite the LA expecting to receive almost £1.5m of further Safety Valve funding during the year and is indicative of the increasing pressures and demands being placed on LAs to provide for High Needs pupils.
38. In common with the national picture, York is continuing to experience an increase in High Needs pupils together with an increasing complexity of need, often requiring expensive provision, especially in Post 16 and Post 19 provision and the education element of Out of Authority placements. In particular York is facing a significant increase in demand for special school places, often exacerbated by tribunal decisions.
39. In addition, due to the significant pressures on mainstream school budgets, it is becoming increasingly difficult for High needs pupils to be supported in these settings. This situation is particularly difficult in York due to the low level of school funding which has a significant impact on these schools ability to adequately meet the needs of High Needs pupils.
40. The Safety Valve agreement commits the local authority to bring the DSG into an in-year balanced position by 2025/26. Further payments are conditional on the local authority meeting the targets set out in the Management Plan, and reporting quarterly to the DfE on progress, with the eventual aim of eliminating the in-year deficit by the target date, with additional payments by the DfE eliminating the historic deficit at that point.
41. As a result of the above, this third year of the Safety Valve agreement is likely to be the most difficult to date, with an increasing risk of the LA being unable to meet the target of eliminating the cumulative deficit by the end of 2025/26 as set out in the original agreement. Officers are working hard to avoid this position, but it is becoming increasingly challenging to achieve.
42. Within Communities the main pressure relates to the £300k library saving. The council is undertaking due process to work with Explore to consider options that can be included into the contract that will deliver a saving. The process does require time to review provision levels as well as consultation and agreement from the partners. There remains an aspiration to gain a full saving from the process but the timeline and level of in year saving is in question.
Performance – Service Delivery
43. This performance report is based upon the city outcome and council delivery indicators included in the Performance Framework for the Council Plan (2023-2027) which was launched in September 2023. Wider or historic strategic and operational performance information is published quarterly on the Council’s open data platform; www.yorkopendata.org.uk
44. The Executive for the Council Plan (2023-2027) agreed a core set of indicators to help monitor the Council priorities and these provide the structure for performance updates in this report. Some indicators are not measured on a quarterly basis and the DoT (Direction of Travel) is calculated on the latest three results whether they are annual or quarterly.
45. A summary of the city outcome and council delivery indicators by council plan theme are shown in the paragraphs below along with the latest data for the core indicator set.
46. Number of children in temporary accommodation – at the end of 2023-24, there were 45 children in temporary accommodation in York which, although an increase from 39 children the previous quarter, is a reduction from 63 at the end of 2022-23. The majority of these children are in stable family setups, do not show evidence of achieving worse outcomes, and York continues to report no households with children housed in Bed and Breakfast accommodation.
47. %pt gap between disadvantaged pupils and their peers achieving 9-4 in English and Maths at KS4 – The gap at age 16 widened in York and Nationally to 43% in summer 2023. A legacy of Covid-19 is that school attendance of disadvantaged groups has been slower to recover, and has been worse than for the same group nationally. The work currently being undertaken through the Attendance Graduated Response is seeing improvements in attendance. Data for 2023-24 will be available in December 2024.
48. % of reception year children recorded as being overweight (incl. obese) – The participation rates for the National Child Measurement Programmes (NCMP) in York for 2022-23 were 97.2% for reception aged children and 95.1% for Year 6 pupils.
· The 2022-23 NCMP found that 19.9% of reception aged children in York were overweight (including obese), compared with 21.3% in England and 22.5% in the Yorkshire and Humber region. York has the second lowest rate of overweight (including obese) for reception aged children in the Yorkshire and Humber region.
· Of Year 6 children in York, 32.5% were overweight (including obese) in 2022-23 compared with 36.6% in England and 38.1% in the Yorkshire and Humber region. York has the lowest rate of overweight (including obese) for Year 6 children in the Yorkshire and Humber region.
49. % of adults (aged 16+) that are physically active – The latest data from the Adult Active Lives Survey for the period from mid-November 2022 to mid-November 2023 was published in April 2024. Data for 2024-25 will be available in April 2025. In York, 515 people aged 16 and over took part in the survey, and they reported higher levels of physical activity, and lower levels of physical inactivity, compared with the national and regional averages. Positively:
· 69.8% of people in York did more than 150 minutes of physical activity per week compared with 63.4% nationally and 61.7% regionally. There has been no significant change in the York value from that 12 months earlier.
· 18.8% of people in York did fewer than 30 minutes per week compared with 25.7% nationally and 27.7% regionally. There has been no significant change in the York value from that 12 months earlier.
51. Children subject to a Child Protection Plan – 139 children were the subject of a Child Protection Plan at the end of September 2024. As a rate per 10k population, York remains below the most recently released National average. The number of children subject to a Child Protection Plan in York is within York’s expected range (133-150).
53. % of working age population qualified to at least L4 and above – In 2023-24, 53.8% of the working age population in York were qualified to at least L4 and above (certificate of higher education or equivalent), which is higher than the national and regional figures (47.3% and 41.2% respectively). This result ranks the city of York fourth regionally. The 2023-24 figure is a decrease from 2022-23 (60.3%) but higher than in previous years. Data for 2024-25 will be available in May 2025.
54. % of pupils achieving 9-4 or above in English and Maths at KS4 – DfE data shows strong performance for York pupils when compared with National averages. In 2022-23, 70.2% of York’s Year 11s achieved grades 9-4 in English and Maths (considered a standard pass), compared to 65.3% Nationally. Data for 2023-24 will be available in December 2024.
55. % of children who have achieved a Good Level of Development at Foundation Stage – In 2022-23, 69.7% of our 5-year-olds achieved a Good Level of Development compared to 67.2% Nationally, and 66.2% in Yorkshire and Humber. Data for 2023-24 will be available in December 2024.
57. Of the 29 households with children in temporary accommodation at quarter end, 27 were recorded as accommodated in hostels and two within Local Authority or Housing Association housing stock. York continues to report no households with children housed in Bed and Breakfast accommodation at quarter end.
58. During 2023-24, an upward trend in overall numbers can be seen both nationally and regionally, however York has been moving in the opposite direction. When looking at the total number of households in temporary accommodation per households in area (000s), York continues to perform positively compared to benchmarks (0.71 in York compared to 4.9 Nationally, 1.4 Regionally and 17.8 in London). It should be noted that these figures are snapshot figures and therefore may fluctuate between the snapshot dates.
59. % of Talkabout panel satisfied with their local area as a place to live - The first biannual resident satisfaction survey taken by the Talkabout panel took place during Q1 2024-25. Results from the Q1 2024-25 Talkabout survey showed that 85% of the panel were satisfied with York as a place to live, up 5% from the previous survey. 81% were satisfied with their local area, consistent with results from Q3 2023-24. A slight decline in satisfaction with the local area can be seen over recent years but York continues to perform well against the latest national figure of 76% (Community Life Survey 2021-22). Data for Q3 2024-25 will be available in January 2025.
60. % of Talkabout panel who give unpaid help to any group, club or organisation - Results from the Q1 2024-25 Talkabout survey found that 64% of panellists had given unpaid help to any group, club or organisation within the last 12 months. This is a slight increase from Q3 2023-24 (60%), and higher than the latest national figure of 55% taken from the government's Community Life Survey 2021-22. Data for Q3 2024-25 will be available in January 2025.
Consultation
61. Not applicable.
Options
62. Not applicable.
Analysis
63. Not applicable.
Council Plan
64. Not applicable.
Implications
65. The recommendations in the report potentially have implications across several areas. However, at this stage
· Financial implications are contained throughout the main body of the report. The actions and recommendations contained in this report should ensure the continued financial stability and resilience of the Council both in the current year and in future years.
· Human Resources (HR), there are no direct implications related to the recommendations.
· Legal The Council is under a statutory obligation to set a balanced budget on an annual basis. Under the Local Government Act 2003 it is required to monitor its budget during the financial year and take remedial action to address overspending and/or shortfalls of income.
· Procurement, there are no specific procurement implications to this report.
· Health and Wellbeing, there are no direct implications related to the recommendations.
· Environment and Climate action, there are no direct implications related to the recommendations.
· Affordability, there are no direct implications related to the recommendations.
· Equalities and Human Rights, there are no direct implications related to the recommendations.
· Data Protection and Privacy, there are no implications related to the recommendations.
· Communications, there are no direct implications related to the recommendations.
· Economy, there are no direct implications related to the recommendations.
Risk Management
66. An assessment of risks is completed as part of the annual budget setting exercise. These risks are managed effectively through regular reporting and corrective action being taken where necessary and appropriate.
67. The current financial position represents a significant risk to the Council's financial viability and therefore to ongoing service delivery. It is important to ensure that the mitigations and decisions outlined in this paper are delivered and that the overspend is reduced.
Recommendations
68. The Committee is asked to:
i. Note the finance and performance information.
ii. Note that work will continue on identifying the savings needed to fully mitigate the forecast overspend.
Reason: to ensure expenditure is kept within the approved budget.
Contact Details
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Author: |
Chief Officer Responsible for the report: |
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Richard HartleHead of Children and Education FinanceExt 4225
Ian Cunningham Head of Business Intelligence Ext 5749 |
Ian FloydChief Operating Officer
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Report Approved |
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Date |
22 November 2024 |
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Ian Floyd Chief Operating Officer |
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Report Approved |
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Date |
22 November 2024 |
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Wards Affected: List wards or tick box to indicate all |
All |
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For further information please contact the author of the report |
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Background Papers: None.
Annexes:
Annex A: CCC Q2 24-25 Scrutiny Committee Scorecard