Agenda item

Mr Neil Baker (Cabinet Member for Highways and Transport), Mrs S Chandler (Cabinet Member for Integrated Children’s Services), Mrs Z Cooke (Corporate Director for Finance), Mr R Gough (Leader of the Council), Mrs S Hammond (Corporate Director of Children, Young People and Education), Mr S Jones (Corporate Director for Growth, Environment and Transport), Mr R Love, OBE (Cabinet Member for Education and Skills), Mr P Oakford (Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services), Mr H Rayner (Deputy Cabinet Member for Finance, Corporate and Traded Services), Mr D Shipton (Head of Finance, Policy, Planning and Strategy), Mr R Smith (Corporate Director for Adult Social Care and Health), and Mr D Watkins (Cabinet Member for Adult Social Care and Public Health) were in attendance for this item.

1.  The Chairman explained that this report had been through all Cabinet Committees which had reviewed their own portfolio areas. The role of the Scrutiny Committee was to scrutinise the overall budget and direction of travel, with the report coming back to the Committee in January 2024. The Chairman urged all Members to engage with the budget setting process by challenging, asking questions, and making recommendations or representations. The Council needed to be synchronised and work together during this extraordinary time.

2.  The Leader stated that at the previous Scrutiny Committee meeting, Members had requested regular budget updates following the Cabinet process, and this was the first such report. The initial draft budget had been published at the end of November, but the process was iterative and remained ongoing.

3.  Mr Oakford explained at the initial draft budget was predicted to be £1415.5m in 2024/25, which included £201.5m (15.3%) of core spending growth including £45.5m for the previous years overspend; £42.6m for price inflation; £80.9m in other cost growth not related to inflation; £14.2m in pay; and £14.6m in other strategic priorities including £5m for highways. The vast majority of spending growth came from Adult Social Care which equated for £96.3m; Children’s Social Care which equated to £31.4m and home to school transport which equated to £32.9m, as well as £16.4m to increase reserves that had been depleted during 2022/23; and £15.1m on the safety valve agreement with the Department for Education. The Council is assuming approximately £99.8m of funding, assuming the council tax increased by the maximum of 5% and depended on the government funding settlement yet to be announced. This left an £118m shortfall in the 2024/25 budget before any savings or increased income had been accounted.

4.  Mr Oakford explained that the £118m shortfall had to be found from savings, increasing income, and decreasing costs. Numerous savings had already been proposed including a £30.9m reduction in future cost growth (largely in adult social care and home to school transport), £28.3m savings every directorate, and £10.1m increased income. This left a gap of £48.8m still to resolve. Since the publication of the initial draft budget paper further savings, income, and assumed funding increases have been identified of £12.3m, which if agreed would reduce the budget gap to £36.5m. He explained that the budget could be balanced this year if savings proposed for future years were deemed to be robust by external auditors, as the Council could then use reserves. Officers would also be waiting to see how the government’s funding settlement would affect KCC.

5.  Mr Oakford continued and explained that officers were analysing and reviewing every discretionary service and the statutory minimum levels and had spoken to KCC companies who had performed well and could release £3m in dividends to KCC. There would also be staffing reviews which would need to be considered as outlined in Securing Kent’s Future. Mr Oakford summarised and explained that there was still several weeks until the final draft budget was issued and welcomed meetings with Opposition Leaders and Members to discuss alternative savings ideas and proposals.

6.    Members raised several concerns and questions:

a.      Members asked if an independent audit could be undertaken into the finances of home to school transport to ensure competitiveness and value for money. Mr Love, OBE explained that at a recent Cabinet meeting a decision had been made to procure external support for home to school transport and other activities, but the budget had already been scrutinised in detail. He felt that the way to reduce the budget was to reduce the demand on the service and ensure appropriate thresholds were met within the SEND Code of Practice and criteria robustly applied. Any changes to these policies would take time to progress through the system, but the process was underway. Mrs Binks added that an internal audit had already been completed on the service, who had found that problems were due to market difficulties and the number of successful initial assessments.

b.      Members questioned if an analysis of the availability of school places could be undertaken to ensure the Commissioning Plan for Education Provision was accurate. Mr Love, OBE stated that the data supporting the Commissioning Plan for Education Provision was accurate, and a new plan was currently going through the necessary processes to ensure the right number, and right type, of school places were available. Similar planning methods had also been introduced for special schools, which had been agreed by the Children, Young People and Education Cabinet Committee.

c.      Members asked what plans were in place for the sale of KCC assets, including windmills, and if some empty or under-utilised buildings could be turned into multi-use office spaces, conference centres, or wedding venues. Mr Oakford confirmed that £18m had currently been secured or planned through asset sales, and Sessions House had been marketed with offers due by the end of 2023. Members and officers would then consider how best to proceed, for example selling A-block for residential dwellings, B-block for multi-use office space, or selling the whole building. The team were also considering other proposals, like wedding venues, as Oakwood House in Maidstone had recently been upgraded for weddings, and some services such as the adult social team, adoption team, and Coroner’s Service had moved into the building, freeing up other buildings for sale.

d.      Members questioned the cost of consultants and agency staff. It was confirmed that £29m was spent on agency staff by KCC, with £18m of this on children’s social workers. This was a national problem as many social workers wanted flexibility, but KCC were working to recruit as many permanent social workers as possible.

e.      Members raised a concern regarding who would decide if savings were robust enough, and when Members would be able to see and scrutinise these documents. Mr Oakford confirmed that external auditors would decide if the savings were robust enough but could be brought before Members.

f.        Members asked if future budget reports could include how much was currently spent on services outlined at Appendix D. It was confirmed that Appendix D provided aggregate savings over several budget headlines, but the dashboards at Appendix C could include this information in future.

g.      A Member questioned savings within highways, the impact of inflation, and the reduction of speed limits within KCC.

h.      A Member questioned how best value within KCC would be determined and the framework for making decisions and considering proposals for making savings or pursuing cost avoidance. The Leader confirmed that Members and Officers would be determining which proposals were feasible and deliverable, and most savings would be from the largest spending areas, including complex and structural changes.

7.  A vote was held on the recommendations: 11 Members were in favour; 0 against; and 2 abstentions.

RESOLVED that the Committee:

a)    Noted the initial draft revenue budget including responses to consultation.

b)    Did not suggest any changes to the initial draft revenue budget before the draft is considered by Cabinet on 25^th January 2024 and presented to County Council on 19^th February 2024.