This report presents the Council’s draft capital and revenue budgets for 2020/21. In accordance with the Constitution, Cabinet is required to develop ‘initial budget proposals’ approximately three months before finalising the budget and setting council tax levels at the end of February 2021. The draft budget is based on the principles contained in the Medium Term Financial Strategy (MTFS) 2021-2023 considered by the Cabinet on 17 November 2020
The Head of Finance Strategy introduced the report which set out initial budget proposals for 2020/21. She was able to update the Committee on the spending review which had been announced by the Chancellor since publication of the agenda, which confirmed the Government would fund covid-19 related pressures in the new year and announced flexibility for authorities to levy an adult social care precept on Council Tax of 3%. The chancellor had also announced new grant funding for children and adult social care totalling £300m, plus additional funding for homelessness and a £4bn levelling up fund, although mechanisms on how these grant streams would be distributed was yet to be provided. In addition, the Head of Finance Strategy also drew the Committee’s attention to two additional appendices which had been provided; Appendix 2, which provided the minute from the Business Support Overview and Scrutiny Committee’s discussion and Appendix 3, which provided additional information in relation to the funding formula for schools and academies.
Members then raised a number of questions and comments, which included:
· Timing of decision making for funding formula – in respond to a concern raised that decisions around the formula were routinely dealt with as urgent, with the facility for it to be called-in being waived, officers confirmed this would always be difficult due to the publication of census data, which was in mid December of each year and was used to test the affordability of funding formula proposals. The formula then needed to be tweaked as necessary, scrutinised by and agreed at the Schools Forum and then submitted to Education and Skills Funding Agency (ESFA) by 21 January of each year.
· High needs block budget – officers confirmed that the budget was currently £9m overspent and was forecast to be approximately £13.5m overspent by the end of the current financial year. A recovery plan was now in place, but it would not see the deficit eradicated until 2028. The overspend was due to the large number of independent special schools currently being used to place Medway children, due to the lack of local provision. A programme was in place for 515 specialist places in Medway state schools by the mid 2020s, a mix of both special school provision and resourced placements within mainstream schools. It was also confirmed that Medway would be approaching the Department for Education for more money to support SEND provision and the Schools Forum were being requested later that week to agree some top slicing from the dedicated schools grant to fund a number of local authority education provision, such as school effectiveness support and other commissioned services.
· Invest to save – officers confirmed that this related to a transformation programme in adult services, which included the implementation of regular reviews to ensure timely identification of reduced level of need and therefore reduced support. It also related to placement sufficiency strategies to reduce placement costs. Demand for placements was very high and so tools were being used to reduce costs of placements as well as an ambition to strengthen in-house fostering to reduce reliance on Independent Fostering Agencies, as well as a hope to reduce numbers of looked after children through improved social work practice and earlier intervention.
The Committee noted the report and requested that its comments be forwarded to the Business Support Overview and Scrutiny Committee.
In accordance with Council rule 12.6, Councillors Howcroft-Scott, Johnson and Chrissy Stamp requested that their votes in favour be recorded.