Agenda item

To consider a progress report on individual risks identified in the Council’s Strategic Risk Register and to consider the controls being implemented to manage the strategic risk relating to finance.

The Committee considered a deep dive into the Strategic Risk “Financial” which included the sub-risks (a) ‘Insufficient funding to deliver services’, (b) ‘Insufficient central government funding for social care’ and (c) ‘Increased fraud and error’.

(a) ‘Insufficient funding to deliver services’

Mr Steve Thompson, Director of Resources, informed the Committee that public sector finance remained under significant pressure, particularly in respect of social care. This had been the situation since 2011-12, and the Council had adapted to operate in a more efficient way, while increasing productivity and seeking income generation opportunities. The Council had also achieved success in securing additional grant funding for a number of projects.

The Council had adopted a Medium Term Financial Strategy covering a six-year period that operated as an important mitigation to ensure service delivery, offered focus for future funding and ensured a consistent approach year-on-year. An area of risk remained however in the continued use of annual local government settlements, with the 2023/2024 settlement having been received on 19 December 2022 which left only a short period in which to finalise the budget for the upcoming year. The Council also possessed a Financial Assurance Framework which Mr Thompson agreed to circulate to members of the Committee for information.

The Committee discussed the risk of a Section 114 notice having to be issued by Mr Thompson as Section 151 Officer. He responded that the issue of such a was not limited to bankruptcy but included issues such as corruption within a local authority. He further stated that in many local authorities where S114 notices had been issued. financial mismanagement had been a major contributing factor. Mr Neil Jack, Chief Executive, added that the Council undertook continuous monitoring of the budget throughout the year to identify emerging issues and necessary actions. He added that in many cases financial over exposure in projects had led to S114 notices in other authorities. In contrast the Council had sought to mitigate the risks associated with capital projects including the agreement of fixed costs.

Mr Thompson added that individual project boards were established to provide oversight and monitoring of risk registers.

(b) ‘Insufficient central government funding for social care’

Adults Social Care

Ms Karen Smith, Director of Adults Services, reported that the primary mitigation in respect of ASC was its Medium Term Financial Plan which allowed control of the financial risks related to the service. It was also highlighted that the Senior Accountant was embedded with the Directorate’s Management Team, and therefore had an understanding of the work and the resources required and that a close working relationship with the Director of Resources, also ensured that costs could be controlled and effective financial monitoring was taking place. However it was noted that demand for adult social care was increasing as a result of an ageing population and subsequent reduction in the size of Blackpool’s workforce along with complex health requirements within the demographic and that closer working with health services was the most effective way to address this.

Work to address the overspend in Adult Services was discussed with Ms Smith reporting that challenges were created by the uncertainties in demand and therefore the funding requirement for the service. She highlighted that a small change in demand could have a significant impact on the resources, noting the cost of an increase in required nursing placements as an example.

Children’s Social Care

Mr Chris Coyle, Assistant Director for Children’s Services, Children’s Social Care, reported that CSC service had experienced increasing demand and that following the Covid-19 pandemic it had seen an increase in those with complex need. The service had also adopted a MTFP to ensure cost was controlled and risk mitigated.

Work to reduce demand had focussed on ensuring that care was where possible delivered in a residential setting where it had been shown that better outcomes could be achieved Challenges in this area were related to the competition with other local authorities for social care placements. In order to ensure value for money Mr Coyle explained that all placements were regularly reviewed by the Commissioning Team and costs were continually monitored, along with  regular inspections and data monitoring regarding the outcomes for children, such as school attendance progression to university education. Mr Coyle added that the monitoring of social care for looked after children was tailored to the individual child to ensure their progress could be effectively measured.

Noting the long-standing overspend in Children’s Services the Committee discussed budgetary control particularly in relation to high cost placements.  Mr Coyle explained that data showed that outcomes were improving noting that Blackpool now had the highest number of children leaving care in the North West.

Partnership working to improve outcomes was raised and Mr Coyle explained that close working with Adult Services, as Housing and Public Protection was important and externally, health services played an important role in reducing demand through early intervention work.  He also highlighted that neglect and domestic abuse created significant demand and that work across the Council and with external partners such as the Police was need to address them those issues. 

It was noted the successful partnership working would ultimately reduce the demand experienced in social care and help reduce the number of people with complex needs, which would lead to reduce costs and overspend for those services.

The report outlined a number of interventions as part of the MTFP to achieve improved outcomes and reduce demand, the Committee therefore asked that a report on progress towards achieve the desired outcomes be provided to the Scrutiny Leadership Board for consideration in twelve months’ time.

(c) ‘Increased fraud and error’

Mr Steve Thompson, Director of Resources, highlighted that responsibility for addressing fraud and serious error at the Council was his responsibility as Director of Resources, and that the council had a Fraud Team of four officers who investigated suspect incidents. It was explained that following the Covid-19 Pandemic a large area of work had been in relation to Covid Grants to businesses.

In respect of these grants the Council had developed its own guidance and it was believed that this had contributed to only a low level of fraud being detected with only approximately twenty cases of fraud out of over one-thousand grants made had been found. This was an example of a good outcome for the Council and highlighted actions that could be taken in response to any future serious events.

Mr Thompson informed the Committee that the Council had also invested in data matching software to allow the comparison of Council Tax claims with data from a variety of sources. The Committee queried if due to the ongoing Cost of Living Crisis, Council Tax was an area that could see an increase in the levels of fraud experienced. Ms Tracy Greenhalgh, Head of Audit and Risk, reported that in the first instance consideration would be given to any erroneous applications and any applicants experiencing financial difficulties could be referred to appropriate services. However if fraud was shown to be ongoing then a zero-tolerance approach was adopted and an individual would be sanctioned.

The use of new software to improve the identification of fraud was welcomed by the Committee who noted that the data obtained could be used for other research purposes. Mr Thompson added that the new approach to fraud detection would also be publicised by the Communications Team to make residents aware of the new approach and potential sanctions for fraud.

Resolved:

1.         That the report be noted; and

2.         That the Financial Assurance Statement be circulated to the Committee for information.

3.         That a report on progress of the interventions outlined in the Medium Term Financial Plan to address the overspend in social care be brought to a meeting of the Scrutiny Leadership Board in twelve months’ time.