Agenda item

To receive a report by the Deputy Leader and Cabinet Member for Finance and Procurement, the Cabinet Member for Adult Social Care and Public Health and the Corporate Director Social Care, Health and Wellbeing, which sets out the proposed draft Budget 2016/17 and Medium Term Financial Plan (MTFP) 2016/19 as it affects the Adult Social Care and Health Cabinet Committee.  The report includes extracts from the proposed final draft budget book and Medium Term Financial Plan relating to the remit of this committee (although these are presented as exempt appendices as item F5 below, until the Budget and Medium Term Financial Plan are published on 11 January)

Mr D Shipton, Head of Financial Strategy, was in attendance for this item.

1.            Mr Shipton introduced the report and said this would be the most difficult budget the County Council had faced.  He outlined the following:

a)    one of the biggest issues had been that the County Council had not have the spending plans from Central Government until the announcement of the spending review on 25 November 2015.  This meant that officers did not know the total financial envelope within which they were working.  The County Council did not receive its own individual settlement until 17 December 2015;

b)    the settlement on 17December included a significant re-distribution of Revenue Support Grant  which officers had not been able to anticipate. The net impact of that re-distribution was a £15million reduction to the Council’s budget;

c)    papers for this committee had been published with an assumption that there was still £8m of the £15million to be found, and this was included in the appendices of the papers for this committee.  The County Council’s draft budget had subsequently been published on 11 January.  That draft identified another £4million of the £8million, so there was now only £4million left unidentified, and this would nearly all be taken from financing items.  However, having a small gap still to close would make scrutiny of the budget somewhat difficult, as Members were unable to scrutinise a whole budget;

d)    the provisional settlement also included the spending power calculation, which  measured the County Council’s change in funding, both through council tax and through government grants.  It took no account of the additional spending requirements the County Council was facing, through the effects of inflation, the effects of the rising population or the impact of increasingly complex needs. Mr Shipton’s request to Members was that they bear in mind that the spending power figure in the report represented only the funding half of the equation and not the spending half; and

e)    the County Council faced real-term reductions in its funding. The Council  would not be able to raise enough through council tax to compensate for both the spending demands and the reductions in central government funding, and therefore needed to make substantial savings.

2.                  Mr Shipton then explained that the impact upon this committee’s work area of having to find £4million of additional savings was that the savings identified for housing-related support would need to increase from £1.5million to £2million. The appendices to the report set out the extracts of the published budget which related to the Social Care, Health and Wellbeing and Public Health portfolios. A statement of variation would be prepared later as it had not been possible to produce this level of detail in the time available since the spending review announcement.

3.                  Mr Shipton, Mr Ireland and Mr Lobban responded to comments and questions from Members, as follows:

a)      in response to a question about the income generated by raising the precept to 2% and the extent to which this would help to offset the increased costs of the national living wage, Mr Shipton confirmed that the income generated would increase each year (as long as the County Council were to agree to raise the precept each year). However, this would not be sufficient to cover the expected increase in costs and the impact of the national living wage in future years as well as the impact of rising demand for social care services. Savings would need to be made elsewhere to cover the gap. Some care costs were currently covered in part by the revenue support grant, which was reducing. Officers were confident that the extent of pressures on social care budgets would mean that the County Council would be likely to meet the Government’s criteria for the additional 2% social care precept each and every year. Mr Ireland added that the ongoing costs of implementing the 2014 Care Act would no longer be funded via a separate grant with funding transferred into the revenue support grant.  The funding transferred for the Care Act had not been protected from the reductions in the revenue support grant over the next four years; 

b)      in response to a question about how the County Council could rationalise the charging process and be able to set a reliable guide price across the county which would cover providers’ costs, due to the impact of the national living wage differing between providers, Mr Shipton explained that identifying the impact of the national living wage, and isolating this impact from that of other inflationary affects upon the costs of care packages, was complex.  It had not been possible since the announcement of the spending review to calculate in detail all the implications of this. Work was ongoing and should be completed soon. Mr Lobban added that the pricing structure of the care market across the county was indeed very complex, and the impact of the national living wage would add another layer to this complexity. Pricing was also affected by other factors, including how individual service users chose to fund their care;

c)      a view was expressed that the Kent Support and Assistance Service (KSAS) should not suffer any reduction in funding. Mr Shipton advised that the funding for KSAS was included in the revenue support grant, and, unlike recent years, there was no protection for any individual components within the grant, as part of the planned reductions over the next four years. This lack of protection had been referred to in the County Council’s response to the Government on the provisional settlement;  

d)    in response to a question about funding made available by the Government to help those authorities supporting Syrian refugees, Mr Shipton said that an announcement on the level of funding was currently awaited, however, the County Council did expect to receive some funding; and

e)    a view was expressed that it was unwise to try to apply percentages when referring to the potential impact of the national living wage, as the range of potential affects was broad and hence difficult to identify and quantify. Mr Lobban replied that the impact would be easier to identify once the detailed work currently underway had been completed.

4.            RESOLVED that the draft budget and Medium Term Financial Plan (including responses to consultation and Government announcements) be noted, and that Members’ comments on other issues which should be reflected in the budget and Medium Term Financial Plan, set out above, be noted by the Cabinet Member for Finance and Procurement and Cabinet Member for Adult Social Care and Public Health, prior to Cabinet on 25 January 2016 and County Council on 11 February 2016.