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Children, Culture and Communities Scrutiny Committee |
4 March 2025 |
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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 3
Summary
1. This report sets out the projected 2024/25 financial position and the performance position for the period covering 1 April 2024 to 31 December 2024. This is the third 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 £2.6m which is a huge improvement on the c£11m forecast overspend we have previously seen at this stage in the financial year. 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 is work still to do to ensure the continued financial resilience of the Council. It remains 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 medium term, 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. 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.
7. This set of indicators are the high-level measurable element of our performance framework, and in newly available data up to Q3 there has been positive performance in areas such as; The survival of newly born businesses after one year has been consistently higher in York than national and regional averages, there has been an increase in net additional homes provided and housing consents approved compared to the same period last year, we have seen a narrowing of the gap, and therefore a reduction in health inequalities, between the highest and lowest ward in York for the % of year 6 children recorded as overweight and the number of households with children in temporary accommodation continues to be lower than previous years. The % of children achieving a Good Level of Development at Foundation Stage continues to be high compared to benchmarks and 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.
8. Alongside the Council plan indicators there are a number of areas of positive performance from across the Council. In 2024, over 39,000 eligible households in York subscribed to the new Garden Waste Subscription scheme. Work is underway to prepare for the 2025 scheme which will run for the full season from March to December. Queen Street bridge was demolished during Q3, and other public spaces are emerging from the ground, with good progress being made on major projects. In order to help young people move around the city, the £1 bus fare initiative for 16 to 18 year olds has been used by more than 250,000 young people so far. The Council has recently successfully delivered a local by-election, ensuring it delivers on its statutory duties.
9. The Council have placed nearly 300 migrant children into York schools this year, highlighting their commitment to support our most vulnerable residents. KS4 and KS5 outcomes remain significantly above average, York has a high proportion of 5 year olds achieving a good level of development and the second lowest number of children who receive an ‘Elective Home Education’ in the region. There has been a reduction in numbers of Children’s Social Care agency staff to zero. The Council recently ran a targeted Pension Credit campaign using the Low Income Family Tracker (LIFT) platform to identify eligible residents and maximise their income. To date, the initiative has resulted in 100 pensioner households in York receiving over £662,700 per year in Pension Credit. This campaign has helped combat rising pensioner poverty and adult social care costs.
10. There has been a smooth transfer into the council of an external homelessness service. In addition, an extra £87,000 has been secured to support the expected rise in rough sleeping with up to 29 extra emergency beds and additional support this winter. The extra funding reflects the rise in rough sleeping nationally and the funds will contribute to bed and breakfast for rough sleepers with the lowest support needs, other accommodation options as well as extra staffing support.
11. To progress with the changes needed to implement the previously announced Childcare reforms to help parents with early years childcare and provide more children with access to high quality early years education, the council has undertaken a deep dive into sufficiency for both early years and wraparound care. Progress reports have been presented to Executive and the Children, Culture and Communities Scrutiny Committee. A report went to the Children, Culture and Communities Scrutiny Committee in November to inform on work taking place to develop a neighbourhood working model as a way of delivering improved outcomes for individuals, communities and the wider system of services in the city. The design principles for the model were approved at Executive in December.
12. In order to improve outcomes for those in need and to manage costs, the council has internally launched a practice model framework and assurance forum in adult social care. There has been a transformation in Healthy Child services, with the introduction of skill mix teams and the recruitment into specialist roles. The Health Trainer team are the best performing stop smoking service in the country, with an over 80% 4-week quit rate (national 57% and regional 65%).
13. We are listening to residents within Our Big Budget Conversation, a consultation on budget priorities taking place over 4 stages during 2024-25. The final stage of the consultation closed at the end of Q3 and asked people to provide thoughts on proposals to help the council balance its budget based on feedback from the previous two stages. York remains committed to improving stock condition and tenant experiences, and results from the 2023-24 Regulator for Social Housing return were published for residents with the current consultation underway.
14. Council Plan Progress Reports, providing an update of activity against each of the plan’s seven priorities, will be published on an annual basis and sit alongside a six-monthly snapshot of progress available on the Council’s website (https://www.york.gov.uk/council-plan-1/snapshot-progress-council-plan/5). The reports complement the Finance and Performance Monitor, providing a narrative for the steps that the Council is taking to meet its ambitions.
Background
Financial Summary and Mitigation Strategy
15. The current forecast is that there will be an overspend of £2.6m. 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. Adult Social Care remains an area of concern, however action is being taken within the directorate to mitigate against this forecast overspend.
16. 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.
17. 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.
18. 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.
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. The Financial Strategy report elsewhere on this agenda outlines proposals for balancing the budget in 2025/26.
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 £2.6m 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 M2 Forecast Variation £’000 |
2024/25 M3 Forecast Variation £’000 |
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Children & Education |
28,659 |
1,111 |
994 |
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Adult Social Care & Integration |
46,807 |
3,286 |
3,608 |
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Transport, Environment & Planning |
23,464 |
-610 |
-859 |
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Housing & Communities |
6,779 |
790 |
711 |
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Corporate & Central Services |
42,983 |
-132 |
-149 |
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Sub Total |
148,692 |
4,445 |
4,305 |
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Contingency |
576 |
-576 |
-576 |
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Use of earmarked reserves |
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-1,089 |
-1,089 |
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Total including contingency |
149,268 |
2,780 |
2,640 |
Table 1: Finance overview
Detailed Analysis
Children, Culture & Communities
23. The forecast outturn position for the services covered by this committee is an overspend totalling £1,202k, an improvement of £230k from the monitor 2 position. The table below summarises the latest forecasts by service area.
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2024/25 Monitor 2 Variation |
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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 |
£000 |
% |
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Children & Education |
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+1,033 |
Children’s Safeguarding |
25,739 |
1,149 |
24,590 |
+979 |
+4.0% |
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+135 |
Education & Skills |
19,073 |
5,026 |
14,047 |
+86 |
+0.6% |
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-35 |
School Funding & Assets |
176,104 |
181,836 |
-5,732 |
-49 |
-0.9% |
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-22 |
Director of C&E & Central Budgets |
1,880 |
6,126 |
-4,246 |
-22 |
-0.5% |
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+1,111 |
C&E Directorate Total |
222,796 |
194,137 |
28,659 |
+994 |
+3.5% |
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+321 |
Culture & Communities |
13,262 |
6,479 |
6,783 |
+208 |
+3.1% |
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+1,432 |
CC&C Scrutiny Total |
236,058 |
200,616 |
35,442 |
+1,202 |
+3.4% |
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24. For Children & Education the projected overspend is now less than £1m and, whilst still a concern, this 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 October it was still 238. Placement budgets are predicted to overspend by a total of £1,104k. 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 £1,772k has been allocated to the placement budgets in 2024/25.
26. Safeguarding Interventions is predicted to underspend by £164k due to staffing vacancies. In addition, legal fees are predicted to overspend by £142k.
27. There is a projected underspend of £95k in the MASH and Targeted Intervention teams due to vacant posts and increased income.
28. An overspend in Disabled Children’s Services of £473k 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.
29. Innovation and Children`s Champion is predicted to underspend by -£160k. This is due to the ability to fund some expenditure from the Family Hubs grant & Family Seeing Grant.
30. 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.
31. At this point in the financial year, an overspend of £82k is predicted. This is a change from the start of the year due to 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.
32. The projected outturn includes contractual inflation from 1st September 2024, for buses this is 1.7% and for taxis 2.3%.
33. 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 £33k based on current staffing assumptions.
34. The Educational Psychologists Service is now predicted to overspend by £31k. This is because of the need to commission external agency support to clear a backlog of assessments.
35. The Effectiveness and Achievement Service and the Skills Service are both predicted to outturn at or very close to budget.
36. An overall underspend of £46k 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.
37. The Dedicated Schools Grant (DSG) is currently 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, with the brought forward balance on the DSG as at 1 April 2024 at a deficit of £291k.
38. However, the year end projection for 2024/25 is for a cumulative deficit of approximately £780k. 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.
39. 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.
40. 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.
41. 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.
42. As a result of the above, this third year of the Safety Valve agreement is proving 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.
43. As previously reported the main pressure in Communities relates to a £300k library saving. The council is undertaking due process to work with Explore to consider options that will deliver a saving. Although some saving is expected this year the process requires 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 is in question.
Performance – Service Delivery
44. 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
45. 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.
46. 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.
48. %pt gap between disadvantaged pupils and their peers achieving 9-4 in English and Maths at KS4 – Provisional data shows that the gap at age 16 has narrowed both in York (31%) and Nationally (22%) in summer 2024 compared to the previous year. However, this now shows that the gap for York is wider than National.
49. % of reception year children recorded as being overweight (incl. obese) – The participation rates for the National Child Measurement Programmes (NCMP) in York for 2023-24 were 96.9% for reception aged children and 94.5% for Year 6 pupils.
· The 2023-24 NCMP found that 22.8% of reception aged children in York were overweight (including obese), compared with 22.1% in England and 23.8% in the Yorkshire and Humber region. York has the fourth lowest rate of overweight (including obese) for reception aged children in the Yorkshire and Humber region. The rate in York has increased compared with 2022-23 (from 19.9% to 22.8%).
· Of Year 6 children in York, 33.5% were overweight (including obese) in 2023-24 compared with 35.8% in England and 37.5% in the Yorkshire and Humber region. York has the second lowest rate of overweight (including obese) for Year 6 children in the Yorkshire and Humber region. The rate in York has increased compared with 2022-23 (from 32.5% to 33.5%).
50. % 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 and young people in care per 10k, excluding short breaks – At the end of December 2024, 236 children and young people were in York’s care. As a rate per 10k population, this is just below the National average (2023-24) and within York’s expected range. Unaccompanied Asylum Seeking Children (UASC), a sub-group of children in care, are expected to increase in number in York. At the end of December 2024, 21 of York’s children in care were UASC, compared to 18 in March 2024. The National Transfer Scheme now mandates that “the Home Office will not transfer UASC to an authority that is already looking after UASC in line with, or greater than, 0.1% of their child population”. For York, this is equivalent to approximately 34 young people based on current population.
52. Children subject to a Child Protection Plan – 150 children were the subject of a Child Protection Plan at the end of December 2024. As a rate per 10k population, York is just above the National average (2023-24). The number of children subject to a Child Protection Plan in York is at the top of York’s expected range (133-150).
54. % 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.
55. % of pupils achieving 9-4 or above in English and Maths at KS4 – ProvisionalDfE data shows strong performance for York pupils when compared with National averages. In 2023-24, 70.5% of York’s Year 11s achieved grades 9-4 in English and Maths (considered a standard pass), compared to 65.4% Nationally.
56. % of children who have achieved a Good Level of Development at Foundation Stage – In 2023-24, 70% of our 5-year-olds achieved a Good Level of Development compared to 67.7% Nationally, and 66.1% in Yorkshire and Humber.
58. Of the 26 households with children in temporary accommodation at quarter end, 24 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.
59. During 2023-24 and into 2024-25, 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) at the end of Q1, York continues to perform positively compared to benchmarks (0.65 in York compared to 5.08 Nationally, 1.45 Regionally and 18.85 in London). It should be noted that these figures are snapshot figures and therefore may fluctuate between the snapshot dates.
60. % of Talkabout panel satisfied with their local area as a place to live – The second biannual resident satisfaction survey taken by the Talkabout panel took place during Q3 2024-25. Results from the Q3 2024-25 Talkabout survey showed that 80% of the panel were satisfied with York as a place to live, a five percentage point decrease from the previous survey, returning to the same level as Q3 2023-24. 80% were satisfied with their local area, consistent with results from Q3 2023-24, and consistently higher than the average from the Community Life Survey, which recorded the lowest level of satisfaction since the survey began in 2013-14, at 74%.
61. % of Talkabout panel who give unpaid help to any group, club or organisation – Results from the Q3 2024-25 Talkabout survey found that 66% of panellists had given unpaid help to any group, club or organisation within the last 12 months. The government's Community Life Survey 2023-24 recorded that 54% had taken part in either formal or informal volunteering at least once in the last 12 months.
Consultation
62. Not applicable.
Options
63. Not applicable.
Analysis
64. Not applicable.
Council Plan
65. Not applicable.
Implications
66. 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
67. 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.
68. 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
69. 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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Authors: |
Chief Officers Responsible for the report: |
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Richard HartleHead of Children and Education FinanceExt 4225
Ian Cunningham Head of Business Intelligence Ext 5749 |
Debbie MitchellDirector of Finance |
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Report Approved |
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Date |
19 February 2025 |
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Martin Kelly Corporate Director of Children & Education |
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Report Approved
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Date |
19 February 2025 |
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Pauline Stuchfield Director of Housing & Communities |
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Report Approved |
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Date |
19 February 2025 |
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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 Q3 24-25 Scrutiny Committee Scorecard