Agenda item

Mr Richard Ennis, the Council’s Corporate Director of Finance, advised that these were challenging times for local government and that the London Borough of Hillingdon was no exception.  The cost of providing Adult Social Care had increased as a result of an ageing population and more complex needs. 

Members were advised that there had also been significant spend on things such as temporary accommodation and homelessness.  The Government had set a target to build 1.5m new homes in the next five years.

The proposed budget had been considered by Cabinet on 6 December 2024 and had subsequently been out for consultation.  The final budget would be considered by Cabinet on 13 February 2025 and Council on 27 February 2025. 

It had been announced that local government would be getting a three year settlement but that the amounts would not be known until the summer of 2026.  A three year settlement would provide more stability for local government than the current one year settlements.  Mr Ennis advised that it was still unclear whether the settlement would take account of the change to the National Insurance threshold and the impact that this would also have on the private sector contractors commissioned by the Council (the contractors might want to pass the additional costs on to the Council but the authority would need to “hold the line”). 

There were also pressures in the economy with inflation being a bit “sticky”.  As it was unlikely that Government would invest a significant amount of money into local government, it would be up to the Council to come up with its own solutions. 

Mr Ennis noted that Hillingdon residents were getting very good value for their Council Tax money.  Of the fourteen outer London boroughs, Hillingdon had the lowest Council Tax.  Furthermore, one of the neighbouring boroughs charged £400 more than Hillingdon for a Band D property. 

Ms Sandra Taylor, the Council’s Corporate Director of Adult Social Care and Health, advised that since the pandemic there had been a 7% increase in demand for Adult Social Care services each year.  Increasingly, the demand had been for more complex, higher needs that required more support which meant that contractors were needing more money to provide the services to meet residents’ needs.  The cost of living crisis and the increase in the minimum wage had also impacted providers and their staff and there was a risk in relation to retention.  As such, it was important that the Council work with providers to get through these challenges together. 

The Adult Social Care placement budget was under significant pressure.  This had been impacted by elective operations being delayed by years which had a negative impact on residents’ ongoing health.  It would be important to ensure that the whole system became more efficient, leaner and more agile.  If the hospital performed well, demand would reduce.

Members were advised that residents were sometimes placed out of Borough due to a lack of local placements.  Ms Taylor advised that Hillingdon would like to create more beds locally, particularly for residents with dementia, as this would help the service to meet its savings targets.  It was hoped that new opportunities would be coming onstream later this year - it was important to get best value as pricing had become extraordinary.  Although Hillingdon had more care homes than most other boroughs, more than 50% of these beds had been taken by non-residents which meant that some residents had to be placed out of Borough.  Members queried whether it would be possible to give a discount to Hillingdon First cardholders. 

Mr Ennis noted that complete reliance on the private sector for placements would result in the Council not having any control over its response to demand.  As such, there needed to be a balance in the provision.  Significant investment had been made in technology to improve access to services but there was a concern that, if access was easier, demand might increase. 

Members queried where the savings would have to come from if the implementation of technology did not deliver the savings that were expected.  Mr Ennis advised that most of the savings would come from technology and that there was a need to modernise else achieving a balance would just get harder.  It was acknowledged that there had to be an alternative and consideration could be given to raising income and looking at thresholds to determine which residents were eligible for which services.  A cultural approach was needed whereby Corporate Directors needed to operate within their budgets whilst ensuring that access to, and delivery of, services was maintained.  The Council did not need to be groundbreaking in everything it did but it did need to ensure that it helped itself as nobody else would be coming to its rescue. 

Ms Taylor advised that the Adult Social Care frontline services were being restructured and that services were being recommissioned to ensure that the right support was available.  Reablement services were also being used to their fullest to prevent unnecessary need for ongoing care.  Ms Taylor was also working with Mr Dan Kennedy, the Council’s Corporate Director of Homes and Communities, and Ms Julie Kelly, the Council’s Corporate Director of Children’s Services, to build community resource support to streamline processes and manage demand. 

It was noted that Hillingdon’s Adult Social Care services had been rated as ‘Good’ in a recent CQC inspection.  Ms Taylor advised that the Council had scored 3 in all but one area inspected by the CQC (where it had scored 2) and challenged whether, in the current financial climate, the Council should be focussing resources on achieving 4s and 5s when maintaining a score of 3 across the board was still really very good and would allow staff to help residents to help themselves. 

Members noted that there seemed to be a never ending demand for Social Care services but that there was a need to reduce costs whilst also meeting its statutory and moral responsibilities.  Ms Taylor noted that the Council had confidence that it could meet the current demand and reduce it through early intervention.  Tech-enabled care was also great for helping others, reduced staffing costs and increased independent living. 

A number of dashboards had been developed which provided a raft of data and showed that demand for Adult Social Care services was stabilising.  Each package of care helped to increase independence and reduce dependency.  Although reablement and discharge were things that were already done well in Hillingdon and enabled cost avoidance, there was still room for improvement. 

Councillor Jane Palmer, the Cabinet Member for Health and Social Care, advised that the Council did not want people to come into Adult Social Care so it was important to help residents to help themselves.  However, as consideration needed to be given to the future needs of residents, it was useful that the NHS was now based at the Civic Centre in Uxbridge.  It would be preferable to remodel services rather than cut them and technology would go a long way to supporting that move. 

As well as reablement and discharge, Hillingdon was really good at falls prevention.  Councillor Palmer noted that, when she attended ICB meetings, the Hillingdon stood out as the best at a North West London level and managed to achieve that at a minimal cost.  Ms Taylor confirmed that the unit cost in Hillingdon was low and the quality was high.  Efforts were being undertaken to maintain this performance despite the pressure on the budget.  Statutory needs would continue to be met. 

Members noted that the officers delivering the services were silent but dedicated.  It was recognised that there was sometimes a disparity between what residents wanted and what the Council had to spend money on. 

Mr Andy Goodwin, the Council’s Head of Strategic Finance, advised that the Month 7 monitoring position for the Adult Social Care showed a £4.1m overspend.  The 2024/25 savings programme attributed £1.5m to Health and Social Care. 

A combination of exceptional demand pressures within Social Care and Homelessness support, together with capital investment plans, was projected to generate a £111.4m uplift in service expenditure across the five-year term.  In order to address this differential, to date, a savings programme of £65.2m had been developed, leaving a residual budget gap of £3.1m across the five-year MTFF period, with £32.6m of savings being proposed for 2025/26 increasing throughout the later years of the MTFF period.

Mr Goodwin advised that Health & Social Care savings proposals were forecast to deliver £7.8m in 2025/26, with a further £1.1m in 2026/27 taking the total savings to £8.9m.  These proposals included an increase in the use of artificial intelligence (AI) in the operation of social work practices which was forecast to secure £0.5m of efficiencies without impacting on frontline services. 

Members thanked the Cabinet Member and officers for putting the budget together during very difficult times.  It was noted that the vast majority of residents would never come into contact with Adult Social Care despite it being the biggest cost to the Council. 

Staffing underspend in the service had reduced the overall pressure on the portfolio budget from £4.5, to £4.1m.  Members queried how long this underspend could be sustained and whether there would be an impact on residents with the use of AI reducing the number of staff.  Ms Taylor advised that the use of AI had only recently been introduced into social work and it was thought that this technology would enable the Council to act quicker, undertake more assessments and control demand.  The vacancies that had arisen had been absorbed but it was recognised that social workers would still be needed to operate the technology.  Every London borough had digitised the way that they carried out assessments, with more being done each day.  It was agreed that progress, impact and outcomes of the increasing use of AI would need to be reported back to the Committee in the future. 

It was recognised that Adult Social Care had been doing more with less for many years.  Members queried the extent to which the savings targets were linked to the digital offer and how the look and feel of the services would change as a result.  Mr Ennis advised that the investment had been positive as it had increased the productivity of the staff with little impact on residents.  Although the Council was a traditional organisation, consideration needed to be given to unit costs and productivity to avoid the need to reduce services. 

A lot of the savings proposals had been linked to transformation and some linked to capital receipts.  A number of boroughs had overinvested in transformation and had not seen adequate returns so it would be important to monitor the situation in Hillingdon carefully.  The Council’s Chief Operating Officer would need to be held to account for the delivery but the Corporate Management Team would need to work closely to ensure its success. 

Mr Goodwin advised that the Council was able to manage and mitigate the financial impact of in-year unbudgeted pressures and risks by the holding of adequate reserves and contingency provisions. Such reserves could be “earmarked” and held for specific purposes or “general” against non-specific risks.  The budget proposals included an increase in general contingency. 

Members recognised that the increasing cost of delivery and the increasing demand were today’s reality but that the Council was driven by the provision of good services.  Whilst cutting costs was the environment, this was not the motivation.  It was agreed that the Democratic, Civic and Ceremonial Manager be asked to draft the Committee’s comments for inclusion in the Cabinet report in conjunction with the Chair and in consultation with the Labour Lead.

RESOLVED:  That:

1.    that progress, impact and outcomes of the increasing use of AI be reported back to a future Committee meeting; and 

2.    the Democratic, Civic and Ceremonial Manager be asked to draft the Committee’s response to the budget in conjunction with the Chair and in consultation with the Labour Lead.