Agenda item

2023-24 Budget Planning Report for Health & Social Care Services


Mr Andy Goodwin, the Council’s Interim Financial Planning Manager, noted that this was the first of two reports that would be considered over the course of the municipal year by this Committee.  This report set out the Council’s broader financial position, identifying the budget gap and the savings that would be needed to bridge that gap.  The report that would be considered by the Committee in January 2023 would focus on detailed budget proposals for 2023/24.  The 2023/24 budget would then be agreed by Council at its meeting on 23 February 2023.  Members asked that examples of initiatives undertaken by the Council to reduce costs be included in future reports. 


The country had been facing unprecedented inflationary pressures, with actual inflation expected to exceed the sums built into the Medium Term Financial Forecast (MTFF).  However, an underspend of £46k had been projected across General Fund budgets at Month 3 and a minor overspend of £37k had been reported in Health and Social Care, driven by an increased demand for adult social care services. 


There had been an increase in the Council Tax base and increases in Government grants, although this had been front loaded in 2022/23 as a result of the Spending Review announcements, and an increase in social care funding.  The 2021 Spending Review had been a multi year settlement, increasing and frontloading the social care grant, but this had been offset by the increase in demand for social care services. 


Increases in annual pay and supplier costs were the drivers behind a further uplift of £13.3m.  Members queried how much of the adult social care budget had been allocated for contracts with third party suppliers and asked that this information be included in the report in January 2023.  Mr Goodwin advised that officers from finance and procurement reviewed any increases in contract costs attributed to inflation to identify which elements of the contracts had increased, and by how much, to then be able to negotiate fairly with the contractors. 


Members were advised that the Council pooled its budget centrally (including social care grants) and then worked up a savings programme.  This de-risked grant funding.  Finance continued to work with officers to manage the back office expenditure to maintain frontline services. 


The Council had started to refresh its savings requirement over the budget strategy period, bearing in mind that inflation rates were just under 10%.  The growth in demand for services remained high and continued to be monitored.  The Council would review its savings requirement and look for efficiencies to protect the frontline services as far as was possible, whilst also meeting the requirement to produce a balanced budget each year. 


The Council had reassessed inflationary requirements associated with contracted expenditure for SEND transport and Members queried how this would impact on the service provision.  Mr Goodwin advised that the fuel costs associated with SEND transport would be reduced through the capital programme to increase the number of SEND places across the Borough.  This would potentially reduce the travelling distance for these children and therefore reduce the associated fuel costs. 


Mr Goodwin advised that the Council’s Business Improvement Delivery (BID) team had been looking at the services provided across the authority to identify efficiency savings.  Although the Council was not able to specifically restrict tender submissions for contracts to small local businesses, as it had to comply with procurement regulations, there were opportunities for these organisations to tender for contracts.  The Committee was keen to receive further information in the new year in relation to the procurement of health and social care related services.  Mr Goodwin would need to confirm with procurement about any open book arrangements that were in place to mitigate the risk of provider failure. 


It was recognised that the population in Hillingdon was increasing and that the demand for services, alongside a Covid-19 driven step change being incorporated into budgets from 2022/23 onwards, would necessitate £10,207k additional spending by 2026/27.  Members queried what this would look like in practice.  Mr Goodwin advised that the Council had played an active role in supporting hospital discharge as well as the increasing demand for mental health services. 


RESOLVED:  That the financial context in which the 2023/24 budget setting process would take place, in advance of detailed savings proposals being developed and approved at Cabinet in December 2022, be noted.

Supporting documents: