Agenda item

The Committee received a joint report of the Corporate Director of Resources and the Corporate Director of Children and Young People’s Services which provided details of the forecast outturn position for Children and Young People’s Services highlighting major variances in comparison with the budget for the year based on the position at the end of December 2023 (for copy of report see file of minutes).

David Watchman, Finance Manager, presented the report, highlighting key points. He explained that the cash limit overspend of £8.1million represented a 4.7% overspend against the total revised budget, which compared to the quarter two overspend forecast of £6.2million. The forecast outturn against each head of service showed the main pressure was in social care. Details of the main variances were provided, including an increase in the children looked after overspend to £9million in quarter three, with the total number of children looked after increasing by 32 between August and December 2023.  The Home to School Transport budget showed a forecast underspend of £0.24million and the quarter three forecast for Aycliffe Secure Centre showed a small surplus position of £70,000.  It was reported that it will be necessary for the forecast overspend of £8.1million to be funded corporately, from the general reserve.

In respect of the Dedicated Schools Grant, the Committee noted the improved position from the original budget in that the use of reserves figure will be a net £2.23million which was a reduction of £5.72million against the original budget plans.  However, 55% of schools will be drawing on reserves to fund their budgets this year.  

Members noted that DfE funding had been utilised to support schools in financial deficits however this was one-off funding and pressure for schools will continue. 

The Finance Manager informed the Committee that the forecast outturn position for the Dedicated Schools Grant Centrally Retained budget showed a projected overspend of £1.9million and the main factor was the £2.4million High Needs Block overspend which was attributed to the increase in top-up funding for pupils in mainstream settings aged 0-16. Non-maintained and independent special school provision continued to be an area of pressure. 

The Chair thanked the officer for the report and invited comments and questions.

Councillor Scurfield observed that despite the increase in the social care budget there was, nevertheless, an overspend. She highlighted the demand for early intervention services and the high cost of placements which require intensive support and she provided the view that there was more work to be done to provide services earlier, to avoid the need for high cost interventions in the future. The Finance Manager recognised that when budgets are strained, discretionary services, including early help provision, were often the first to face cuts. Jim Murray, Head of Education and Skills, pointed out the increasing amount of young people entering care who have complex needs which require high cost placements.

Councillor Coult expressed her view that she would like to see an increase in the use of in-house provision.

The Chair asked the Finance Manager as to what impact the ongoing overspend was likely to have on the medium term financial plan, in the future.  The Finance Manager replied that the children looked after budget continued to be a priority and activity was ongoing to improve the sufficiency strategy and increase in-house provision. In response to a further question from the Chair, the Finance Manager confirmed that, at present, no further financial assistance was available from central government.

Resolved:

The Children and Young People’s Overview and Scrutiny Committee noted the overall reserve position.