Agenda item

The report of Marie Taylor (Interim Head of Finance – Care) will present the budget monitoring information for the financial year 2018/19 as at October 2018.  Report is to follow.

Marie Taylor (Interim Head of Finance for Children’s Services) referred to the budget monitoring report as at 31 October 2018 that was circulated with the Agenda.  Marie highlighted the following:

·       That an overspend of £3.238m was currently projected against the overall schools’ budget, driven mainly by the forecasted overspend on the High Needs Block of £4.1m;

·       An underspend on the Early Years Block was forecasted due the levels of take up for 2-year-old funding (gone up from original forecast) and 3 and 4-year-old funding (numbers predicated are less than actual take up).  Modelling work would be carried out in 2019/20 with plans to look at increasing the hourly rate for funding of 3 and 4 year olds from £4.16 (the current rate) if affordable within the funding block allocation, which would be known later this month;

·       The Post 16 budget was currently forecasting an underspend as a number of extra places were added, but not all have been taken up;

·       The biggest areas of overspend in the High Needs Block are on Independent Special School fees, named pupil allowances and top ups in non-Wiltshire provisions;

·       One of the major drivers of the increased cost is volume and the table on page 26 of the Agenda showed an 11% increase in high needs block expenditure and a 21% increase (556) in EHCP’s;

·       Many other Local Authorities are in the same position with overspends any this may not be about Wiltshire spending money badly, more about the initial levels of funding received from the Government;

·       The High Needs Block Working Group report next addresses what are seen to be the contributory factors and proposals in that report would continue to look for ways of reducing spend as the deficit position could not continue into future years.

Grant Davis referred to research carried out by Worcestershire Council which had tracked the rise in EHCP’s since 2010 and presented the Forum with a graphical representation of the impact.  When the Children and Families Act introduced EHCP’s in 2014 the progressive increase in volume stemmed from this point.  The age-range was increased to cover 0-25 year olds.  Grant reported that Wiltshire are mirroring the national picture and that this was the biggest problem facing DSG budgets.  Wiltshire’s EHCP figure was 3% with the national figure being 2.9%.  In 2014 the rate was 2.4%.

A Forum Member wished for her concern to be noted on the rise in the predicted overspend in between the working group meetings and questioned where the accountability for that was?  Whilst acknowledging that special needs children need the funding, it was of a concern to her that money may have to be taken away from mainstream children who also need funding.

Marie referred the Group to DfE guidance which states that local authorities have overspent their DSG allocations and have found themselves in cumulative DSG deficits.  In these situations, regulations require local authorities to seek approval of Schools Forum to allow them to carry forward the overspend and offset it against the following year’s DSG.  It is likely this will be a proposal in the January 2019 report when we have a better idea of our actual 2019/20 allocations.   

The Chairman asked if the Local Authority would be contributing to the overspend to reduce the deficit and share the burden? Marie confirmed that this would need to be a Member decision but had raised this as an issue to be explored with Terence Herbert (Corporate Director) and Becky Hellard (Interim Director of Finance and Procurement) and will feedback progress to the January 2019 meeting.

Resolved:

1.    That the Forum note the budget monitoring position as at the end of October 2018, the continued pressure on the high needs budgets and the potential deficit position of the DSG reserve and recovery actions required.  To support and contribute to the on-going work of the High Needs Working Group.

2.    With regard to mitigations, that the Forum note the proposals of the High Needs Working Group in the next report which should be examined for benefits, risks, feasibility and timescale and note that these would form part of an action plan being drawn up within a further report being brought to the next meeting on 17 January 2019.