THE first two months of the new financial year have Herefordshire Council on course for a £600,000 overspend.

This projected outturn - based on spend to the end of May – represents 0.4 per cent of net budget.

Children’s services stays under serious  pressure with a specific over-spend of £1.3 million expected.

The overall overspend, identified in a new corporate performance report,  is in the context of the council having to achieve having to achieve significant savings -  £10 million in 2015/16 on top of £15 million delivered in 2014/15.

Next week,  cabinet will hear that “management action” will reduce the overspend during the year, with the risk of non-achievement mitigated by using  specific reserves.

The projected overspend is due to additional placements and continued reliability on agency staff to fill social work posts that were planned to be reduced in children’s safeguarding.

But the report concedes that “moving forward continued efficiencies and service re-design” will become harder to deliver.

Savings plans are currently being reviewed to meet projected savings required up to 2019/20.

As part of this the “realism” of reductions already set out will be reconsidered, particularly in children’s safeguarding.

The report’s overview shows 74 per cent of the council’s performance measures are showing a positive shift.

But  there remain 24% that are currently performing worse than the same period last year.

Cabinet will be told that consideration needs to be given as to “required actions”.

The current challenges, by directorate are:

Adults’ wellbeing

The forecast shows an overall balanced budget for adults’ wellbeing.

There has been higher than expected demand, particularly for domiciliary care during the early part of 2015/16 and  client budgets for 2015/16 are over £2.2 million than they were in 2014/15.

This year on year reduction of costs is expected to be achieved through proactive management of placements, financial challenge of all new placements and reviewing all high cost existing packages.

The forecast assumes that any further demand pressures will be managed within the operational teams and savings plans identified are implemented on time to deliver expected benefits.

Some areas of safeguarding  are still a challenge.

Performance of safeguarding enquiry completion within timescales, in particular, has performed significantly below target levels in the first two months of 2015/16 with current performance running at 26.4 per cent  against the target of 80%.

Children’s wellbeing

The county’s schools continue to maintain a strong profile in terms of the Ofsted judgements, remaining in the top third nationally for the percentage of children attending good and outstanding schools.

The number of young people not in education, employment and training (NEETs) has reduced over the last year and the council is said to have made

“significant strides” to ensure that it is aware of what education and employment activity young people are involved in between the ages of 16-19.

Schools are currently being involved in the development of a capital investment

Strategy - this is on track for cabinet decision making in September.

The forecast outturn for the service area, however, is  an overspend of £1.3m, due to overspends in children’s safeguarding.

An action plan is currently being worked on to reduce spending in year.

£1 million of the variance relates to placement costs, particularly in fostering where matching carers to the needs of the child have led to the use of external agencies.

There is also pressure in both kinship carers and special guardianship allowances.

The cost of interim agency staff continues to cause costs pressures; recruitment of high numbers of permanent staff is still proving difficult.

There has been an increase in the number of children placed in external fostering agencies since the 2015/16 budget was set leading to a pressure of £547,000.

Action is in hand to review placements so as far as possible in-house fostering is used.

To cut the number of children in high need placements there has also been an increase in costs in Kinship care arrangements causing a pressure of £190,000 - this is greater than anticipated in the council’s planning.

Special guardianship allowances are forecast as a pressure of £168,000, a review of the Council’s policy is currently in progress.

Agency staff in teams cost £659,000.

The budget was based on an assumption regarding the reduction of agency staff from April 2015.

However, recruiting permanent members of staff to social worker posts continues to be difficult.

The council has been able to successfully move staff from its newly qualified programme to permanent roles and recruit social workers both local and internationally.

However, the ratio of permanent to agency is 55 per cent to 45 per cent, causing an overall budget pressure of £659,000 across a number of teams.

Recruitment is reviewed weekly.

The overspend has been reduced by using the children’s with disabilities reserve which was created to fund agency staff to resolve the backlog of cases and support while service redesign was completed.

The social work academy is overspending by £142,000 due to an accelerated recruitment of newly qualified social workers, to support further reductions in agency staff in future years.

Concerning trends have also emerged in the Multi Agency and Safeguarding Hub (MASH) and Children in Need teams relating to timeliness.

In part this has been caused by the rapid turnover of agency staff, and the higher caseloads.

The council says action plans are in place to mitigate against this.

Caseloads, in some teams particularly Children in Need are recognised as still too high - in the high 20’s above the target of 16.

Managers are finding it difficult to keep the case loads of senior practitioners lower to enable them to improve the quality of practice and direct work in families.

However, when the caseloads are averaged - currently 14.54 per cent  - across the directorate this lowers the figure to within the target range.

Economy, communities and corporate

The forecast outturn is an under spend of £80,000.

This reflects pressures for property maintenance of £200,000, the impact of inflation on energy costs of £116,000k, a delay in the restructure of parks and countryside of £85,000 and an increase in coroner’s fees of £55,000.

But these pressures have been off-set by the early delivery of savings plans for 2016/17.

Despite progress on key sites including Plough Lane and Shire Hall, challenges remain within the council’s property estate.

Condition surveys and health and safety reports have shown that some properties are in need of significant investment.

A review of corporate accommodation is currently underway to determine both a medium term strategy – plan for office accommodation over the next five years - and immediate actions over the next 12 months that will fit into this strategy.