Agenda item

Mrs Sarah Hohler, Cabinet Member for Children, Families and Education, Ms Joanna Wainright, Director, Commissioning and Partnerships and Mr Sean Kearns, Chief Executive of Connexions Kent and Medway have been invited to attend the meeting between 10.15am and 10.45am to answer Members’ questions on this item.

Mrs S Hohler, Cabinet Member for Children, Families and Education, Ms J Wainwright, Director, Commissioning & Partnerships and Mr S Kearns, Chief Executive, Connexions Kent and Medway were present for this item.

(1) Mr Christie explained that his concern was that at a time when some of the most vulnerable young people were at risk, a reduction of £5 million to the Connexions budget over two years (which constituted 20% of the budget) would have a major impact on those who use Connexions services, particularly those Not in Education, Employment or Training (NEETs).

(2) Mr Kearns informed the Committee of Connexions’ focus on vulnerable young people and NEETs, and how it carried out preventative work in conjunction with schools and colleges. Discussions had already demonstrated the impact on non-teaching staff in schools, and there was the possibility that Connexions would be asked to do more direct work with young people who did not attend school or college.

(3) Mrs Hohler made the point that other councils had to make similar savings, as had other local Connexions services. Connexions Kent and Medway were doing a valuable and effective job and rates of NEETs in Kent were lower than most other council areas. Later on in the discussion, Members’ attention was drawn to page 26 of the agenda, which contained a table showing percentages of young people who were NEET in Kent, England and the South East. Kent’s lower percentages demonstrated it was performing well against comparator authorities. Mr Kearns explained that Connexions were acutely aware of the funding situation and had been expecting to have to negotiate funding for future years, since other Connexions services around the country had experienced significant funding pressures

(4) Mr Christie pointed out that Kent, unlike some other councils, had allocated the full amount of available funding to Connexions and this perhaps explained its excellent relative performance with NEETs. He expressed a concern that reducing funding would have a negative impact on this performance. Mr Christie asked if, in the same way Government protects certain budgets, whether the work done by Connexions in helping young people into employment could be protected, and whether this was considered during discussions to identify savings. Mrs Hohler responded that the Council’s priorities were for children to go through school and into gainful employment, and to reduce the attainment gap of disadvantaged children, and she believed Connexions would still be able to deliver services that would achieve this within a reduced budget.

(5) The Government had not taken the decision to reduce the Connexions budget, but rather had reduced the Area Based Grant (ABG) which was not ring-fenced. Mr Christie asked whether reducing funding to other less frontline services, Value for Money or Invest to Save schemes had been considered. He made the point that a NEET who has regular contact with Connexions would cost around £8,000 per year, yet a young offender could cost up to £60,000 per year and asked whether consideration had been given to the money that could be saved by maintaining existing funding.

(6) There was a discussion around the exact detail of the decision. Mrs Hohler clarified that the decision taken was to give permission to consult with Connexions about identifying how to make the £5 million savings from the budget which had already been agreed. She explained that the decision had been taken as urgent because there was a meeting of the Connexions Kent and Medway Board on 9 September, and there was a desire to be completely open about the possible savings. Mr Christie made the point that when Members were originally consulted about the decision it was exempt and urgent, yet the non-exempt version contained in the agenda pack in front of the Committee had been bowdlerised

(7) In response to a question about whether the consultation had been delayed by the call-in, Mr Kearns stated that formal consultation with stakeholders, young people and staff had not begun because negotiations about the outcomes framework were still in progress, but that consultation would begin in due course. The Chairman also clarified that the decision was taken under urgency procedures and as such she and the Vice-Chairmen were consulted and the proposal was not delayed.

(8) The Chairman asked when and where the outcomes of the consultation on savings would be provided, and also whether a new contract would be made available before the next financial year. Mr Kearns explained that the consultation would need to begin before the end of 2010 in order for any proposals to be implemented before the start of the next financial year. He went on to explain that there were other voluntary sector providers funded either by Connexions or directly, which provided advisory services, and these would be impacted. For this reason it would be necessary for them to be included in the consultation process. Ms Wainwright anticipated that reports on the outcome of discussions about the contract for 2012/13 and 2013/14 would be presented to Cabinet, subject to confirmation.

(9) Mrs Hohler explained that the Council had been very thorough in looking at ways of making reductions and had been discussing with Connexions ways of cutting costs, such as using advisors based in schools rather than in town centre offices. Negotiations were proceeding well, with both parties having a greater insight about the impact of potential cuts and some of the difficulties in making savings, such as vacating premises with a longer lease. In these cases, KCC and Connexions would have to look at other ways of making the savings, targeting proposals in a way that continued to work with the most vulnerable young people and those most likely to be NEET. Mr Kearns envisaged that there would be reductions to universal and preventative services.

(10) In response to a question from Mr Manning about how proposals for savings would be identified and how Connexions were involved in this process, Ms Wainwright explained that they would be identified as part of the negotiations and that the Chair of the Kent and Medway Connexions Board and the Chief Executive were working very closely with KCC. The process involved looking at elements of how the Connexions budget was spent and examining whether those initiatives should continue, be reduced or cease, based on a needs analysis of which areas have higher proportions of NEETs than others. This enabled a differentiated approach across the county. When the contract was set up, the outcomes to be delivered by Connexions were agreed, in some cases district by district. For the current year, a price and performance targets were set out by KCC for Connexions to meet presenting need. As a result of reductions to the budget, they would be looking at which areas of presenting need could not be met.

(11) Mr Christie asked whether, if 70% of Personal Assistant (PA) time was spent in schools as set out in the contract, Connexions would be able to continue doing this with reduced funding. Mr Kearns clarified that the contract that Connexions had with the Council was outcomes-based and 70% of time being spent in schools was an input target, rather than a requirement to spend 70% of time in all schools. He added that it had featured as part of the discussions that looked at delivering the outcomes while working in a different way, and he expected the percentage of NEETs to increase as a result of the level of reductions. Connexions were in the process of agreeing with Kent what the consequences of a reduced contract would be.

(12) In response to a query about whether there would be a new contract between KCC and Connexions before the start of the next financial year, Ms Wainwright explained that the current three year contract meant that there could be no cuts during the first year, but that the following two years could be negotiated. KCC had chosen to indicate the scale of cuts that would be anticipated during years two and three to provide Connexions with a greater opportunity for planning.

(13) Since Connexions was a social enterprise, part of the discussions had focussed on which elements could be delivered under this model, in line with the Government agenda of public provision within the charitable sector. Mrs Law stated that in Herne Bay the idea of creating a social enterprise scheme through which NEETs could challenge themselves was being explored, and asked if this was being considered as part of the options for cost savings within Connexions. Mr Kearns responded that Connexions would be looking at other avenues of delivery for those who are vulnerable, NEET and long term NEET.

(14) Responding to a request for comparative data for other providers of the type of services provided by Connexions, Ms Wainwright explained that the data was commercially sensitive and difficult to obtain. She did however state that KCC had some idea of this information as a result of the tendering process, but due to its sensitivity could not share it.

(15) Mr Christie asked whether there were further plans for cuts to the Connexions budget in addition to the £5 million already identified. Mrs Hohler responded that the Council was looking at making savings while affecting the Connexions service as little as possible, and there was no intention to increase the extent of the savings above the amount already identified, although this was dependent on further announcements from Government.

RESOLVED that the Cabinet Scrutiny Committee:

(16) Thank Mrs Hohler, Ms Wainright and Mr Kearns for attending the meeting and answering Members’ questions.

(17) Ask the Cabinet Member, Children, Families and Education to ensure that the proposed revisions to the Connexions Budget and services would be brought back to the Cabinet for consideration prior to implementation in April 2011, so the Committee can consider whether to call-in the proposals for examination.

(18)    Ask the Cabinet Member, Children, Families and Education to ensure that any decision taken about further reductions to the Connexions budget beyond the £5m already identified will also be taken by the Cabinet.

(19) Ask that the Managing Director, Children, Families and Education provide comparative information on the performance of other organisations in helping NEETs into employment.