Agenda item

6.1       The Director of Children’s Services introduced the report which marked the start of the Committee’s input into the 2022/23 RPPR Cycle and provided a stock take of the Council’s position for scrutiny’s consideration ahead of more detailed planning for the 2023/24 financial year. The report contained as appendices relevant parts of the Council’s Year-End Monitoring Report which highlighted achievements and challenges for services the Committee scrutinised and the State of the County report which looked ahead at demographic, financial and policy trends and challenges. The Director highlighted that the Council was operating in a highly uncertain context due to COVID, developments in the national economic environment and significant reforms to services being brought forward by Government. The reform that generated the greatest uncertainty for the Council was planned in Adult Social Care, but there were also reforms planned in Children’s Services which would introduce significant change to the way services were delivered. The Director highlighted that the report offered the Committee the opportunity to consider if further information, or scrutiny, was required on areas covered in both the appended reports, and that the Committee’s views were sought on the principles for assessing one-off investment proposals set out at paragraph 1.6 of the report.

6.2       The Committee asked a number of questions regarding the information provided in the report:

·         Impact of Adult Social Care reforms – the Committee asked how the findings of the fair cost of care exercise would impact the Council’s budget in future years and future care quality (i.e. would we expect care quality to improve as a result of paying higher fee rates to providers). The Assistant Director for Strategy, Commissioning and Supply Management confirmed that the fair cost of care exercise was live and clarified that it only applied to residential and nursing care for people aged sixty-five and over, and people receiving domiciliary care aged eighteen and over, so a range of other social care provision was excluded from the assessment (for example, working-age residential care). Determining the budgetary impact was partially reliant on understanding the funding that would be allocated by Government to support the reforms and next year’s funding allocation was expected just before Christmas. The Department was required to submit two versions of a market sustainability plan, one in October this year publishing the outcome of the fair cost of care exercise and a subsequent plan in February 2023, describing how ESCC would move towards paying the fair cost of care over the subsequent two to three years. The gap between current fee rates and the rates identified by the fair cost of care exercise would be the financial challenge the Council would need to address. The Chief Finance Officer confirmed that the assumed cost of the reforms for the Medium Term Financial Plan was currently net nil, because both the impact of the reform was unclear and the funding allocated had only been set out nationally in headline terms. There was yet to be a national consultation on funding methodology and while national research had identified a gap between funding Government had allocated and the projected costs of implementing reforms, ESCC’s assumption was that reforms would be funded by Government as a ‘new burden.’ That may change as more detail on the local impact of reforms and our funding allocation was made available.

In terms of quality, the Assistant Director explained that the link between care cost and care quality was interesting and complex. A range of factors informed the cost of care provision, with charges levied for provision of nursing and/or personal care and other costs relating to elements such as the size of a room or view from a room in residential care settings. It was often the latter factors the influenced perceptions of care quality, and other matters such as interactions with staff, rather than the provision of nursing and personal care which would be provided in line with Care Quality Commission requirements and therefore not vary greatly across settings. The way that care providers structured their finances also differed greatly across the market, with larger national providers assessing costs differently to smaller businesses running a single, local care home, for example, and it was anticipated that the fair cost of care exercise would identify some of those differences.

·         Inflation – the Committee asked how the Council would quantify the cost of rising inflation and account for it in budget planning. The Chief Finance Officer outlined that pay inflation was set at 2.5% in this financial year. Any increase in the pay award in-year would be met from reserves but that would have an impact on future years of the Medium Term Financial Plan and need to be modelled in. The Council calculated inflation using a range of indices, including data from the Office for Budget Responsibility, rather than a single, simple inflation rate. The Chief Finance Officer explained that the impact of inflation was complicated to account for because some contracts had fixed costs and a few years remaining on them, so the impact of inflation on costs for those contracts would be felt at different times in the coming years.

·         Inflation impact on care homes – the Committee noted recent media reports that some care homes were struggling with increased costs from inflation; and asked what the response to any care home closures as a result of rising costs in East Sussex would be. The Assistant Director for Strategy, Commissioning and Supply Management responded that the Department knew care homes were having to manage significant additional costs from factors such as rising energy bills and rising cost of insurance coming out of the pandemic. National bodies such as the Local Government Association and Registered Care Association were lobbying to ensure pressures facing care homes were recognised. There had been a steady number of care home closures in East Sussex in the last five years, largely due to there being a number of small providers that had decided to retire. There were concerns that further closures would be seen in future as a result of rising costs so the Department were having conversations with the local market, but the Assistant Director emphasised that developing sustainability plans was very challenging. There was a lot of focus nationally on the fair cost of care exercise discussed above, and the rate at which ESCC and other councils could move towards that fair cost would be dependent on the grant funding received from Government.   

·         School improvement grant – The Committee asked how the Council was responding to the 50% reduction in the School Improvement Monitoring and Brokering Grant in 2022/23. The Assistant Director Education explained that the Department had anticipated the reduction in the School Improvement Grant, which would cease entirely in April 2023, for some time and had built reduction of the Grant into budget and service planning in response to avoid a cliff-edge in provision. The Grant was part of, but not all of the resource, the Department used for school improvement; although it was fair to say that overall resource available for school improvement had reduced significantly over a number of years. The Department were looking at how staffing was arranged across the education division to manage the loss of the Grant, maintain an improvement function and ensure that the Department was able to respond to new requirements, such as those set out in new attendance guidance discussed in the previous item. This was challenging but the Assistant Director felt it was possible to do. The focus in recent years had been on building a school-to-school partnership approach to school improvement to maintain capacity, and the Department would also look to discuss de-delegated funding to support school improvement activity following the loss of the Grant with the Schools Forum in the new academic year.

·         Multiply Programme –The Committee asked if a target group had been identified for the use of Multiply adult numeracy funding and what the role of schools would be in delivering that. The Director of Children’s Services responded that the Skills Team had developed plans for the funding and it would focus primarily on vulnerable adults, particularly those for whom this training could be a stepping stone to employment, as well as some staff employed by ESCC who were on lower pay grades and could benefit from additional numeracy training. Further Education colleges would be more involved in delivering the training than schools.

Principles for assessing one-off investment proposals

6.3       The Committee discussed and commented on the principles for assessing the proposals to be brought forward for use of £5.175m one-off funding held in reserves at the 2022/23 budget for investment.

6.4       The discussion covered the following comments:

·           the first principle of ‘enabling a significant improvement in delivering to the Council’s priorities and/or performance targets’ should be the overriding priority from which the rest followed, as the other principles could all be seen as the means to deliver that first principle;

·           out of the remaining principles, the next priority should be ‘proactively addressing known future issues’ as the operating landscape for the Council and services covered by the Committee had changed significantly since the 2022/23 budget was set and generated future challenges the Council should prepare for;

·           the importance of investments improving performance and outcomes was noted by the Committee. When investment was made to improve delivery of performance targets the importance of the Council’s performance targets being the right ones to assess progress was also noted;

·           in response to concerns that the principles of ‘managing service demands’ and ‘avoiding future costs’ indicated the potential for future cuts to budgets and services, the Director of Children’s Services clarified that these principles were describing ways of assessing ‘invest to save’ proposals, to invest in measures that would create a ‘virtuous cycle’ of reduced demand and costs, rather than making service or budget reductions;

·           that the criteria were broad, could be clearer and could be more ambitious. The Director of Children’s Services responded that it was recognised that the principles to assess investment proposals against were broad at this stage and this was one reason Cabinet had asked for scrutiny’s input on them, to assist with narrowing down and prioritising the focus (for example, with views on whether to prioritise budgets or service improvements). The Lead Member for Adult Social Care assured the Committee that the one-off investments would be ambitious and focussed to achieve tangible outcomes, as had been seen with previous focussed one-off spending plans;

·           in light of the request for views on prioritising the focus, the Committee suggested that as community safety and safety of children and adults was a priority focus of the Committee, that investments that deliver on ‘keeping people safe’ should be prioritised; and

·           the option of adopting a principle or overarching theme to ensure that investments deliver a ‘wellbeing economy,’ which would cover areas such as community safety and addressing future issues like climate change.

6.5       The Committee asked what the timeline for agreeing the one-off investments was. The Chief Finance Officer responded that the ambition was to have one-off investments resolved by the autumn. Sharing the principles with the Committee for comment and ideas was part of the process that would feed into Cabinet making a decision on investments in the autumn. Given the short timeframe, it was noted the Committee would welcome an opportunity to consider the process in further detail at their work planning awayday. 

Areas for future scrutiny

6.6       The Chair asked the Committee if there were areas covered in the report that could benefit from further scrutiny. It was agreed that the Committee would find it helpful for officers to notify the Committee, as planning progressed in future months, of areas they would welcome input on or would suggest People Scrutiny Committee prioritise. 

6.7       The Chair suggested that areas requiring future scrutiny were also discussed at the Committee’s work planning awayday in September and asked that the Committee notify the Chair of any areas they particularly wished to discuss at the awayday.

RPPR Board

6.8       The Committee RESOLVED to establish an RPPR Board to meet in December to consider the developing financial position for 2023/24 and draft Portfolio Plans, and agree detailed comments on those to be put to Cabinet. The Committee agreed the Membership of the RPPR Board would be the whole Committee.