Issue - decisions

The committee adjourned for a short break during consideration of this item.

The committee considered the report which set out the Second Financial Review 2025/26 position based on income, expenditure and known commitments as at the end of August 2025.  It also identified actions that were being taken to address adverse variances within the Children and Families services.

A forecast overspend of £8.862m reflected a reduction of £0.136m on the FR1 overspend position of £8.998m.

The key pressures continued to be increased costs in placements and staffing, with the main overspends occurring in the following areas: provider services and fostering; children in need, protection and disabilities; cared for children; children’s services; education participation and pupil support; and education and 14-19 skills.

The committee asked questions and made comments in respect of:

• The savings target and reasons as to why this had not been achieved.
• The overspend of over £7m in Provider Services and Fostering.
• Delays in the Birth to Thrive project.
• Walking routes to school and these not being realised.
• The likelihood of achieving savings next year in respect of accommodation to support 18–25-year-olds.
• Staff recruited from overseas and new visa rules if a basic income is not achieved.  It was felt that this could pose risk for the local authority, as it had been reported that other public sector organisations, such as the prison service, were at risk of losing staff.
• The cost of placements and the likelihood of commissioning changes being able to help achieve this.
• The provision of care homes and whether the Council could operate more of these in the future to help reduce the costs of placements and residential places.
• The authorisation of additional expenditure, over agreed budgets.
• The need to spend money to prevent financial incentives from being lost.
• Savings proposals, policies and health and other outcomes associated with implementing walking routes to schools.
• The importance of the public recognising the Council’s statutory duties in providing social care support was highlighted; the Council could not turn people away once budgeted expenditure had been reached.
• The need for realistic budget setting within Children’s Services.
• The Corporate Parenting role and responsibilities and the need to remind other Elected Members of these.
• An update regarding the Westfields project was requested, together with clarification as to how current financial obligations were being met.
• Concerns around the Dedicated Schools Grant (DSG) were felt to be a national issue.
• The impending government White Paper and the potential associated financial implications.
• There was a statutory obligation to provide support and costs had increased.  Market forces determined pricing.

In response, officers reported that:

-       Regarding the safe walking routes programme, work had previously stalled but resumed in 2024/25, with two routes implemented and £80,000 in savings achieved.  A report to committee in April 2024 outlined the complexity of the programme.  The previously proposed savings target of £250,000 was unrealistic due to the long lead-in time required before transport could be withdrawn.  Four routes have progressed this year, with one fully implemented and the remaining three expected to deliver savings next year.  It was emphasised that walking routes could not be introduced immediately in place of transport due to necessary lead-in times and ongoing transport costs.  Reference was made to capital costs and the return on investment; a written paper could be provided regarding this if needed.  Work was currently taking place in respect of planning the next six programmes.  In terms of the legalities involved and not progressing with an intended walking route, it was explained that no precedence would be set against any other routes if plans were abandoned.  Business cases needed to be met; this was a complex area.

-       In terms of the savings profile for Children’s Services, it was recognised that the initial figures in the Medium-Term Financial Strategy (MTFS) lacked fully developed business cases that demonstrated how savings would be achieved in the context of an inadequate service rating. Over recent months, the savings profile had been reviewed in detail alongside the transformation and improvement plan, though delivery capacity did remain limited.

-       The transformation programme had been reviewed to identify the most effective projects. The ‘Right Child, Right Home’ initiative was a key project expected to deliver MTFS savings, with four workstreams:

1.    Sufficiency - improving assessments and placement decisions.

2.    Edge of Care - providing early intervention and support to prevent escalation.

3.    Recurrent Care – this was very specific work that addressed repeat removals from the same parent.

4.    16–25 Accommodation – costs had risen by 54% since 2024/25; a new strategy and block purchasing approach had been approved, with savings expected in future years.

-       The ‘Birth to Thrive’ workstream was currently paused due to lack of a viable business case and limited officer capacity. A SEND inspection was due but had not yet taken place.  It was recognised that improvement work was necessary and that this took priority alongside the DSG management plan.  

-       Work was ongoing to establish a dedicated Children’s Services commissioning unit, separate from the joint Adults and Health unit, to improve strategic children’s commissioning, brokerage and quality assurance.

-       Regarding the employment of staff from abroad, the scheme the Council operated was fully underpinned by HR and legal agreement.  Any national policy and visa requirement changes would be addressed as part of future planning.

-       With regards to Children’s Services budget setting, expenditure and overspends, it was explained that a written response to explain the process for the approval of budget and placement procurement would be provided to members of the committee.

-       The overspend of £7.9m was confirmed to be placement overspend, impacted by increased complexity of need and market forces.

-       In respect of the Westfields project, the committee was advised that work was underway to develop options.  This would come to committee in January 2026.  The costs for insurance, security and heating were currently being met by Estates and not Children’s Services.

-       Regarding the government White Paper, it was unclear as to what this would include at present.  The DfE’s policy direction remained focused on mainstream inclusive education.  Content in relation to EHCP was awaited; there were 490 more children on EHCP than the previous year.  It was hoped that grant funding would be forthcoming to enable implementation of reforms, but details were not yet known.

RESOLVED: (Unanimously)

That the Children and Families Committee

1. Note the overall Council’s Financial Position as described within the Executive Summary - Council Financial Position.

2. Note the latest revenue forecast for Children and Families Directorate, review progress on the delivery of the MTFS approved budget policy change items (Table 3 of the report), the RAG ratings and to understand the actions to be taken to address any adverse variances from the approved budget.

3. Note the overall in-year forecast capital spending for Children and Families Directorate of £24.556m against a revised MTFS budget of £56.131m in Tables 4 and 5 of the report.

4. Note the Capital Virement above £500,000 up to and including £5,000,000 as per Table 6 of the report to be approved in accordance with the Council’s Constitution.

5. Note the latest DSG in year forecast and forecast cumulative year end position as described within paragraph 40 of the report.

6. Recommend to Council to approve the Supplementary Revenue Estimate Request for Allocation of Additional Grant Funding over £1,000,000 as per Table 7 of the report.

7. Note the reserves position as per Table 8 of the report.