Caroline Holland introduced the report which was considered by Cabinet at their meeting on 20 October 2014 and set out the updated medium term financial strategy (MTFS), reflecting revisions to the budget and identified savings in line with confirmation of the government grant funding to be received. Departments were asked to review the current MTFS and present alternative savings which were outlined in the report. Furthermore, the updated capital programme also accounted for the school expansion programme. Caroline Holland explained the changes within the schools expansion programme would impact on revenue and the budget overall. Paul Ballatt added that the Panel received a report detailing the financial information on the capital programme and expansions programme at the last Panel meeting. Paul Ballatt also outlined the substantive changes in this years bidding round which included reducing permanent primary expansions by 2 forms of entry, and secondary expansion by 6 forms of entry and providing additional funding for enhanced special school provision which were not in earlier projections.

Caroline Holland informed the Panel that there was a council wide budget gap of £32 million which needed to be addressed and future savings proposals to achieve this would be brought to the next round of scrutiny in January 2015, along with revised service plans.

Councillor Jeff Hanna noted that the report was difficult to read in part due to the font size of the service plans. Councillor Jeff Hanna informed the Panel that he had contacted the Chair of the Overview and Scrutiny Commission, Councillor Peter Southgate, to raise this as a concern and to ask for the next round of budget and business plan proposals to be circulated with the agenda on A3 to make them easier for the Panel to read.

Paul Ballatt outlined that some of the savings previously agreed had been replaced as outlined and should be considered in conjunction with the equalities impact assessment.

Councillor James Holmes asked for information on the SEN Transport budget. Paul Ballatt explained that SEN transport is a replacement saving as the budget is under significant pressure. The ability to deliver this saving was questioned and this saving has therefore been removed and needs replacing. Paul Ballatt added that the Panel had received reports on this budget and the issues faced at previous meetings.

Paul Ballatt informed the Panel that a working group was established just under 3 years ago which led to minor changes in policy on the provision of SEN Transport. The department have looked at other forms of SEN transport beyond institutionalised forms which have been built into this transport policy and will ensure greater choice as well as value for money. There is now better liaison with the Environment and Regeneration department and the transport hub, with a post recently recruited which ensures liaison with parents regarding provision and choice. This has resulted in the achievement of some savings however; demographic growth has brought additional budget pressures and has impacted on the projections and savings that can be made at this stage.

Paul Ballatt added that the Children and Families Act also affects assessment and planning for pupils with SEN. As part of this Act, councils are required to offer personal budgets in some circumstances. There may be some scope for families to commission their own transport at a lower cost using personal budgets. Modelling undertaken by the department has demonstrated that significant savings could be made in the medium term with this approach.

Councillor Jeff Hanna asked if the council had to wait for legislation to be enacted to take this proposal forward. Paul Ballatt informed the Panel that this was not the case and that there is a duty on the local authority to consider the service it provides and to offer personal budgets. The department are looking at personal budgets for transport, short breaks and other preventative services. 

Caroline Holland added that the council needed to reduce the present overspend within the SEN budget first and once the spend is under control then the department could look to make these savings from the introduction of personal budgets.

Councillor James Holmes asked how personal budgets could reduce cost and if it was surely not cheaper to commission services as a council. Paul Ballatt explained that whilst you would expect commissioning services for delivery by the council would be cheaper than individuals going out to do so; this was not the case regarding SEN transport.

The Panel agreed to make the recommendation that officers expedite such savings as can be achieved from the SEN budget without detriment to users.

Councillor Linda Taylor asked about the proposed savings to the training provided for facilitators of parenting programmes. Paul Ballatt explained that this saving would be achieved through a reduced spend on the parenting training budget as the number of trained facilitators in place is sufficient for this programme and therefore the council do not need to train more practioners. Also, a saving would be made from de-commissioning a service which according to current monitoring, is underperforming. Councillor Linda Taylor asked if there was any scope in existing contracts to generate more value for money or any savings. Paul Ballatt informed the Panel that the department had some years ago moved to a commissioning model that was outcome focused and compliance was monitored regularly to ensure value for money.

Councillor Katy Neep asked if the potential impact identified within the equalities impact assessment of the proposed decommissioning of one project for children with disabilities, that has had limited take up, was a cause for concern. Also if families would be supported through other services to mitigate the negative impact and ensure they are aware of other options. Paul Ballatt confirmed that there were a range of services for children with disabilities and users would be redirected when that service ended.

Councillor James Holmes asked about the proposed savings in the school standards and quality team and what progress had been made in getting schools to buy in school improvement support from the council and if third parties had been approached on a commercial basis. 

Yvette Stanley explained that the council do charge schools and have been in discussion with third parties to look at where there are opportunities to generate additional income with organisations buying in these services. The core budget for this team is c£500,000 and a service level agreement with schools in the borough is in place. Most of the income generated maintains this service and is primarily from schools buying in services. The South West London partnership of borough’s also provide reciprocal services to enable the council to access the relevant expertise, although this does not provide capacity to generate significant income. Capacity is also supplied through the Teaching Schools Initiative by the DfE for schools’ professional development.

Yvette Stanley added that the school improvement market is particularly competitive and that Merton aim to be the main provider to schools within the borough. If the council could expand the service to make it more commercial then it would do so but this is not an option at present given the councils financial position and the level of risk that this investment may involve.

Councillor James Holmes asked if there were a significant number of schools that had bought back services. Yvette Stanley confirmed this was the case and that the services bought back were wide-ranging including: school improvement; behaviour support, HR; Finance IT and research and information amongst others.  Schools valued services such as data to support target setting at pupil and cohort level. Whilst the council has expertise in certain areas, very few of these services are profit making. Councillor James Holmes proposed that the council look at the model established by Richmond and their buy back service for any good practice that could be adopted.

Councillor Katy Neep asked what measures had been put into place to ensure changes to accommodation for looked after children, 16 years of age and above, were not negatively impacted by the proposed saving. In addition, would the council send children out of the borough to make this saving.

Paul Ballatt explained that the Access to Resources service within CSF procures all places for looked after children 16 and above. This model also improves negotiation with providers. This team are tasked with reducing spend and increasing the quality of individual placement contracts with individual providers . Paul Ballatt informed the Panel that needs assessments are undertaken on a case by case basis which impacts on the rates that are paid to providers. The service therefore can generate savings without impacting on quality. Paul Ballatt reassured the Panel that the department are committed to the best outcomes and wouldn’t just adopt the cheapest model.

Yvette Stanley added that, as Director for CSF, she is responsible for signing off all out of borough placements which are often the more complex cases, are generally more expensive and can involve sexual exploitation or mental health issues. Yvette Stanley explained that it is often the case that placements need to be made out of borough because they meet the young person’s specific needs. The council’s track record of placements close to home is good, however,  people often move in to the borough to access cheaper homes or due to the benefits cap in Merton and this can result in an increase in the number of complex cases.  Such demographic changes impact on the council’s ability to make cashable savings in those budgets. However, the council aims to procure smart without impacting on quality.

Yvette Stanley explained that the next round of savings would require £4.8 million of savings to be found and that given current budget [pressures it would not be possible  to make savings from SEN transport and placements budgets which probably amounted to 30% of CSFs budget. At present these services are overspending. This means we are again having to look at reductions in youth services, early years, and commissioned services below the statutory threshold for  intervention.

Councillor James Holmes asked about the proposed savings to the post 16 Looked After Children/Care Leavers accommodation budget and if these savings were realistic and achievable. Yvette Stanley informed the Panel that the council has new responsibilities for complex needs cases, of which there are up to 25  for children with disabilities and up to 21 for Looked after children.

There is an overspend in the service of £2.6 million a high proportion of which related to new statutory duties and demographic pressures and the council are working with the DCLG and other departments to quantify these new requirements ( new burdens) on councils. These additional responsibilities also put particular pressure on Merton  which is one of the lowest funded local authority in London for children’s social care services.

Councillor Maxi Martin highlighted the role of elected members and staff as corporate parents and talked about the work the department had undertaken to try and deliver savings without any detrimental impact on young people.

RESOLVED:  Panel noted the report and agreed to forward their recommendations and comments to the Overview and Scrutiny Commission for consideration, at their meeting on 25 November 2014, which are as follows:

SEN Transport (CSF2012-05): The Panel recommends officers expedite such savings as can be achieved from the SEN budget without detriment to users.

All savings: That Panel reluctantly agree the proposed savings and have noted those savings to be replaced.