Decision details

The Committee considered a report on the current forecast outturn for the financial year 2024/25 based on the Council’s income, expenditure and known commitments as at the end of July 2024. It also identified actions that were being taken to address adverse variances to urgently address the Council’s financial sustainability.

Performance against the 2024/25 Budget within each service committee, and the Finance Sub-Committee was outlined in Table 1 of the report. The Council was forecasting an additional in-year pressure of £26.5m - this was before the application of any exceptional financial support.

Members sought clarification on the reasons for the overspend of £20.7m in the Adults budget. It was stated that the overspends forecast were the expected overspends at the end of the year if nothing changed. The overspends arose from a number of factors including more people than anticipated seeking Council support. This included an increase in the number of former self-funders seeking local authority funding to meet their care costs. Other factors included the increase in costs of providing care due to increases in the National Living Wage, an increase in the discharge activities from hospitals.

Officers reported that it would be very unlikely that the department would be able to balance its budget this year. However, the £20.4m forecast was a worst-case scenario and assumed a level of growth in the second half of the year similar to the level of growth seen in the first half of the year. If the activity in growth and price could be prevented in the second half of the year that should bring the overspend down by £4m.

Officers advised Members that the needs of those with most significant social care needs and disabilities, are factored into projections. Officers had commissioned modelling to be undertaken on the demand on Adults and Children’s to the end of the decade, in order to get a better understanding of what will happen year-on-year. A key driver of demand and expenditure in adult social care is the proportion of the population over the age of 85, which has increased in Cheshire East over the last 5 years, at a faster rate than the English average and will continue to the end of the decade.

Members were advised that work around the Better Care Fund (BCF) was conducted in a way to support all parties who were dealing with discharge and significant investment in reablement services from the BCF is taking place and will need to be expanded to reduce the number of people going into hospital.

Members asked whether difficult conversations were being had with partners, such as the NHS. Officers informed members that NHS colleagues were clear of the consequences of Cheshire East Council’s financial situation and that if it were to deteriorate, it would have a detrimental effect on the local NHS provision. However, the NHS were themselves facing deficit of £160m and were seeking how to minimise expenditure. Cheshire East Council has made clear to the Ministry of Housing, Local Government and Comminates, the impact of the NHS national policy on local authorities.

Members were advised that the £500k Public Health Grant could not be used to offset a reduction in expenditure but would be for an overall increase in substance misuse support. 

In response to a question raised as to whether officers could tell if the mitigations put in place were working, officers reported that it was too early to tell, however, there had been some stabilisation in respect of price and a levelling off of activity.

Officers committed to providing a response to the questions raised by committee members, as summarised below:

·         The rate at which the population of those over 85 in Cheshire East was increasing.

·         Would Cheshire East Council be asking for permission to use Exceptional Financial Support funding for other means which were not initially requested for in March when we were going to draw that money down?

RESOLVED: by Majority

That the Adults and Health Committee:

1.    Review the factors leading to a forecast adverse Net Revenue financial pressure of:

Council: £26.5m against a revised budget of £387.6m (6.8%)

Adults and Health: £20.7m against a revised budget of £138.0m (15.0%)

Scrutinise the contents of Annex 1, Section 2 relevant to services within the committee’s remit, and review progress on the delivery of the MTFS approved budget policy change items, the RAG ratings and latest forecasts, and to understand the actions to be taken to address any adverse variances from the approved budget.

2.    Consider the in-year forecast capital spending of:

Council: £164.5m against an approved MTFS budget of £215.8m, due to slippage that has been re-profiled into future years.

Adults and Health: £0.8m against an approved MTFS budget of £0.8m

3.    Note the available reserves position as per Annex 1, Section 5.

4.    Approve the Supplementary Revenue Estimate Request for Allocation of Additional Grant Funding over £500,000 up to £1,000,000 as per Annex 1, Section 3, Table 2.

5.      That the Adults and Health Committee acknowledge the request of the Finance Sub committee at its meeting on the 12^th September 2024 for the Corporate Policy Committee to undertake an examination of children services and adults as areas for consideration as their performance lies outside the parameters of the MTFS.