Tackling the risks in budgeting for children

31-05-2017

The pressures on budgets for children’s social care (£8bn annually in England) can be just as severe and significant as those for adults’ services, but they typically receive less attention. Having worked with the Asociation of Directors of Adult Social Services (ADASS) to develop a well-received advisory risk assessment tool for discretionary use by councils with adult social care responsibility (launched in 2015), CIPFA is now developing a parallel tool for children’s services. 

The aim is to check whether unsustainable financial pressures might be faced in children’s social services. By assessing the extent to which various risk factors apply, the tool gives a broad impression of how challenging it is likely to be to generate the planned level of future savings. The answers involve a fair degree of judgement, but combining a wide range of such questions leads to a well-grounded overview. 

There will be two ways of using the tool

First, to facilitate informed discussion and consideration across finance and social care together of the practical deliverability of budget proposals. 

Second, to assess the total level of risk, and also to compare that with other parts of the country. An automated benchmarking version of the tool will be made available online which will not only make it easier to provide a quick visual view of the results, but also allow authorities to compare their results with those of other participants. 

The extent of difficulty faced will be a function of the proportion of the 34 questions for which a high risk position is indicated, and the scale and speed of savings required. It is hoped to launch the tool officially in good time to inform the 2018/19 budget-setting process. Meanwhile, we are involving the Association of Directors of Children’s Services, and you can see a draft of the questions below. 

Any comments or corrections sent to Paul Carey-Kent E: cipfanetworks@cipfa.org by the end of June would be welcome.

Draft questions

A. Savings

  1. Are there high percentage savings since 2010/11 – local authority as a whole?

    Higher savings may mean less scope to make further savings.
  2. Are there high percentage savings since 2010/11 – children’s social care (ie excluding education)?

    Higher savings may mean less scope to make further savings.
  3. Is there low relative spend per head of population compared with similar authorities – council as a whole?

    Low spend per head may mean limited scope for savings given that local authority must meet legal requirements
  4. Is there low relative spend per head of population compared to similar authorities – children’s social care?

    Low spend per head may mean limited scope for savings given that local authority must meet legal requirements.
  5. Is there a lack of a detailed children’s social care savings plan for 2018/19?

    Most savings take time to implement. Absence of detailed savings plans makes it more likely that an authority will be unable to manage within the resources available.
  6. Is there a lack of a detailed children’s social care savings plan beyond 2018/19?

    Most savings take time to implement. Absence of detailed savings plans makes it more likely that an authority will be unable to manage within the resources available. This risk is less significant than the risk above.
  7. Has delivery of previous savings plans been unsuccessful?

    A poor previous record of delivering to plan suggests a system/culture which may make it hard to deliver in future.
  8. If there is a detailed children’s social care savings plan, are a high proportion of the savings speculative (ie there is a lack of clarity about how the savings will be made in practice?)

    Plans need to be delivered. If there is a risk that a high proportion of savings cannot be delivered then there will be future financial pressures which will be difficult to manage.

B. Local pressures

  1. Are children’s demographic pressures (the trend in number of children requiring help) above average?

    More demand for services which will not be funded except by the Council.
  2. Are there problems in recruiting children’s social workers?

    If there are social worker vacancies then caseloads will increase and / or a high proportion of Newly Qualifieds will be in place. Lack of time/experience may then lead to increased numbers of expensive emergency placements.
  3. Is there a disproportionate change in the number of child protection cases and children in need, compared with similar authorities?

    This may lead to more expensive, emergency provision rather than planned value for money provision.
  4. Is there a disproportionate increase over time in looked after children?

    This may lead to more expensive, emergency provision rather than planned value for money provision.
  5. Has there been an increase in organised gangs/child sexual exploitation

    This may lead to difficult and complex relationships (eg as CSE flourishes on a backdrop of drugs and alcohol) causing destablisation and high cost placements.
  6. Is there a high proportion of assessments that lead to no social work action?

    This may indicate that the 'front door'/early help offer is not working correctly and social work time is used in assessment rather than care planning, resulting in additional costs.
  7. Looking at children in either residential or foster care, are a comparatively high (more than 70%) proportion in internal provision?

    If yes, this may restrict the amount of savings that could be achieved by switching from external to less expensive internal provision.
  8. Does the authority make 'good' use (ACS judgment) of fostering, adoption, SGOs instead of residential placements?

    Yes = five, as this may restrict the savings that could be achieved by switching from Residential to lower cost options like fostering.
  9. Has the proportion of looked after children placed into residential care remained static, or else increased, in recent years?

    A lack of progress in reducing the proportion of residential placements may indicate a ‘low risk/high cost’ mindset which makes future savings hard to achieve.
  10. Is the provider market for placements competitive?

    May have to pay more for acceptable care where all local authorities are trying to access restricted national provision.
  11. Are there problems recruiting enough foster carers/adopters?

    A lack of foster carers may mean that the authority is placing children in more expensive alternatives.
  12. Does the director of children’s services believe the local mental health provision is good?

    If not, this may impact on children and parents with MH issues leading to increased spend in children’s social care.
  13. Does the director of children’s services believe the local domestic violence/drugs and alcohol offer is good?

    If not, this may lead to breakdown of families and lead to increased spend in children’s social care.
  14. To what extent does the grant fail to cover the costs to the authority of the services provided to unaccompanied asylum seekers?

    Given that grant doesn’t meet costs in many areas, an influx of UASC could give rise to considerable financial pressures.
  15. Has the authority planned for demographic changes in care leavers (and extended age range) and UASC care leavers?

    This could lead to additional costs and additional social worker time.
  16. Has children’s services been judged inadequate within the past year or is the local authority due an inspection within the next year?

    This can lead to a requirement to spend more in response to recommendations.
  17. To what extent is the authority putting resources into assisting another local authority?

    This could lead to management capacity issues, with an effect on internal VfM.
  18. Does the authority have pressures in other children’s budgets (beyond Social Care), eg home to school transport?

    This could indicate broader pressures that mean it is harder to manage budgets.

C.  Culture and relationships

  1. Have there been recent changes or use of interim arrangements in the senior management of children’s services?

    Lack of stability in leadership.
  2. Is a high proportion of the corporate leadership team new to their role?

    Combination of new and inexperienced chief executive/chief finance officer/corporate policy lead may lead to unrealistic corporate planning decisions.
  3. Are there significant challenges to the Council as a whole – critical inspections; leadership change in challenging circumstances; significant restructuring?

    Uncertainty and change may make rational decision making more difficult (although in a dysfunctional organisation those changes may be essential).
  4. Is there a difficult relationship between director of children’s services and chief executive and/or chief finance officer

    Good quality decision making is less likely.
  5. Are there difficult relationships between councillors or between councillors and officers?

    Good quality decision making is less likely.
  6. Are there difficult or complex relationships with education services?

    System wide view of overall provision for children may be compromised.
  7. Are there difficult or complex relationships with housing and benefits providers (whether district councils or other departments)?

    System wide provision of strategic housing services, which helps prevent children’s costs increasing, may be compromised.
  8. Are there difficult or complex relationships with the police?

    System wide view of overall provision for children may be compromised.
  9. Are there difficult or complex relationships with health?

    System wide view of overall provision for children may be compromised.

If each question is scored 1/2/3/4/5, the total score then populates a temperature gauge: maximum score 35 x 5 = 175

Score of <70 = low risk/green, 70–130 = medium risk/amber, - >130 = high risk/red

Notes:

Questions 1–4 require local judgement of trends compared with broadly similar authorities, implying that there is a view of that available (if there isn’t, that is a matter of concern). As such, no guidance is given in the model on what constitutes ‘high’ or ‘low’ answers.

Question 9 can be answered by assessing what proportion of current savings plans might be considered undeliverable (5) / Red (4) / Amber (3) / Green – on track (2) or / have already been delivered (1), and if only a minority of savings are and categories (1) and (2), then the overall assessment will be (5) highly speculative or (4) speculative.