Decision details

Reason for decision:

(a)  Given the Council’s financial position, Cabinet now receives a monthly monitoring report setting out the latest forecast and actions being taken to balance the budget by the end of the financial year.  Adjustments to the capital budgets require approval from Cabinet.  Cabinet approval is also required to approve the engagement of external transformation partners via a PCR Compliant Neutral Vendor Framework funded from budget recovery reserve, to help deliver service transformation and cost reductions that address the structural deficits in adult social care and children’s services in the medium term.

(b)  The challenge in both the current financial year given the majority of action is one-off, and the even greater challenge in 2024-25 mean that the engagement of an external partner is extremely time critical as the cost reductions needed to address the structural deficits in adult social care and children’s services will take time to have a positive impact on council’s financial position and future sustainability.

Background:

The Q2 report on the Council’s financial position as at the end of September 2023 will be reported to Cabinet on 30th November 2023 which shows a forecast overspend of £36m before management action.  The forecast overspend presents a serious and significant risk to the Council’s financial sustainability if it is not addressed as a matter of urgency.

The report identifies management action to reduce the overspend to a balanced position by the end of the financial year, including those actions that are recurring to help reduce the budget gap for 2024-25 and the MTFP. In order to achieve the cost reductions in the medium term, the structural deficits in adult social care and children’s services need to be addressed and this will be achieved through the engagement of external transformation partners, which will be funded from the budget recovery reserve.

Options considered:

All options to reduce spend both one off and recurring are being considered to bring the 2023-24 forecast outturn position back into balance.

Existing internal resources were considered to deliver service transformation to address the structural deficits in adult social care and children’s services. However, it is critical that this is done as quickly as possible and draws on the knowledge and experience of what has been delivered in other councils, which means that an external partner is considered best placed to do so, given the current internal capacity constraints.

How the proposed decision supports the Strategic Statement:

Securing Kent’s Future (SKF) acknowledges that given the significance of adults and children’s social care within the council’s budget, and that spending growth pressures on the council’s budget overwhelming (but not exclusively) come from social care, that the priority of delivering New Models of Care and Support must take precedence over the other priorities in Framing Kent’s Future.  This creates an expectation that council services across all directorates must collectively prioritise delivering the new models of care and support objective as a collective enterprise.

The Finance Monitoring report for 2023-24 provides the detail of the latest financial position and the relevant information on the progress being made in terms of the savings and management actions to achieve a balanced position by year end and reduce the budget gap for 2024-25 and the MTFP.

Cabinet agree to:

(a)  consider and note the Council’s updated financial position and savings and management action to address the in year overspend,

(b)  approve the Capital budget adjustments detailed in section 14 of the budget monitoring report

(c)  approve the procurement of external support via a PCR Compliant Neutral Vendor Framework funded from budget recovery reserve, to help deliver service transformation and cost reductions that address the structural deficits in adult social care and children’s services in the medium term.

(d)  in relation to (c) delegate authority to the s151 Officer to, in consultation with the Leader of the Council, negotiate, finalise and enter into relevant contracts to implement the required contract award; and

(e)  delegate authority to the s151 Officer to take other actions, including but not limited to entering into contracts or other legal agreements, as required to implement the decision in line with the actions and arrangements set out in the decision documentation.