Progress – Financial sustainability, prioritisation and modernisation
Recommendations 2.5 and 2.7
The original CPC report showed how the current economic context coupled with rising demand would require difficult decisions ahead. During the peer challenge, a budget gap of £24m was envisaged by 2026/2027 and there were already in year pressures forecast of approximately £14.5m (Month 4, 2022/2023) with the majority linked to adult and children's social care services.
During the Progress Review, it was clear to peers that the council's financial position has become more challenging since the CPC. The 2022/2023 out-turn report to cabinet reported a projected overspend of £7.8m and peers were told that this is the largest level of year end overspend the council has experienced since becoming a unitary authority. The council's Finance and Corporate Performance Report to Cabinet in November 2023 (period six) identified a funding gap of £15.2m in 2024/2025 that increases to a further £27.1m from 2025/26. Similar to many other councils, rising demand in both children's and adult social care is a significant challenge. In July 2023 the council reported a forecast overspend for 2023/2024 of approximately £14m (period 4). In November 2023 the council reported that this forecast overspend has reduced to £10.8million and peers were told that they will now report in January the projected overspend by the year end (period 8) is now £6.2m, indicating a positive direction of travel, although still significant.
In 2023/24, the Council has a capital programme of £97million and is forecasting this reduced by £38million following cross-party capital challenge sessions. Peers saw financial monitoring reports which have kept members informed of the capital budget variations and the projected outturn position of the Council's finances.
Senior councillors and officers who met with the peer team demonstrated a strong awareness of the scale of the budget challenges faced and the need to maintain a strong focus on deliverable savings. Positive progress includes a commitment to cross-party involvement to inform the budget planning for 2024/2025. A refreshed corporate plan has been developed (2023 - 2027) and peers were told that aligning resources to the delivery of clear strategic priorities is guiding the 2024/2025 budget setting process. Cabinet reports in October and November 2023 provide updates on the savings proposals. It will be important to maintain a strong corporate focus and oversight on the delivery of the savings required, including both in-year challenges and 2024/2025 deliverability.
Peers are also of the view that the council should consider opportunities to review its demand management strategy across People Services. This should help to provide a detailed understanding of comparative data relating to rising demand, costs, impact on resources and measures in place to manage this whilst ensuring the delivery of quality care/support and statutory duties in a sustainable safe way.
The council's future approach to modernisation and transformation, including the recent appointment of a new Transformation Director (currently a split role with Cultural Services) and proposals for a new Corporate Programme Management Office and Board, should play a critical part in this. The Transformation Programme is in its infancy, with workstreams established and governance arrangements developing. In the context of the Council's wider financial challenges, ensuring the transformation programme is adequately resourced will be key.
As part of the Council's ongoing transformation focus and initiatives, Peers consider that this is a key opportunity to be really clear about the workforce operating model, with specific reference to the future (or otherwise) of hybrid models of working, asset rationalisation and modernisation of related systems and processes.