Report of the Strategic Director for Children’s and Education Services attached

The report of the Strategic Director for Children’s and Education Services explained how the budget proposals for the Directorate had been developed.

The 2022/23 budget process saw the Council develop savings and efficiency plans of over £42.3m over the three years to 2025/26 of which there were savings options of £11.8m for the Children and Education Services directorate.  The provisional financial settlement announced on19 December 2022 reflected a change in government policy in relation to funding inflation and social care pressures. This had given the opportunity to review the quantum and phasing of savings and it was now proposed that options of £36.2m were progressed, of which £11.725 were attributable to the Children and Education Services directorate.

As a result of the improved financial settlement and alongside observations and challenge from Scrutiny Committee Members, the £75k Youth saving proposal has been removed and inflation assumptions had been reviewed.  In addition, due to increasing Looked After Placement and Permanence placement costs the Managing Demand saving had been delayed and reprofiled.  Furthermore, the School Crossing Patrol savings proposal had also been rephased and whilst it was proposed that savings of £11.725m savings were progressed, the timing of these have been deferred to later years.

The financial settlement had also given some scope for some targeted additional investments focused on preventing and managing future demand to leave the council in a more sustainable position in 2025/26 when the current spending review period ended.

As in previous years the budget options for savings had been informed by the Directorate Budget approach to deliver safe, effective and efficient services, the progress and impact of the services to date.  This approach had contributed to overall looked after children numbers (rates) reducing and remaining relatively stable in Manchester.  Cost reductions have been driven by a reduction in the number of expensive external residential placements.  There had also been a parallel reduction in spend on external foster placements (12% reduction year on year, equating to £2.1m p.a. reduction in spend).

An analysis of the investment in prevention by the Directorate and current placement stability had led to some confidence that placement numbers were not going to increase at the rate assumed in the 2022/23 budget setting process with anticipated savings achieved through fewer and reduced placement costs, totalling £10.615m

Of the savings proposed, £1.110m would focus on charging of existing services to grant, reserves, ceasing activity that it was not achieving planned outcomes or applying different set of budget assumptions.

It was also reported that Looked after Children placements and Home to School Transport demographic demand was determined based on the placement numbers on which the budget was set compared to the current position and potential increase in demand informed by 3% population growth predictions.  Subsequently it was proposed that the Children and Education Services cash limit budget would increase by £2.357m, £2.419m and £2.479m in 2023/24, 2024/25 and 2025/26 respectively as estimated in the 2021/22 budget setting process.

The high and volatile inflationary environment had seen an increase to the corporate inflation allowance and immediate pressures affecting budgets in 2023/24 had already been identified and deemed unavoidable.  Requirements illustrated that there were £2.687m of known and confirmed inflation pressures, which would be allocated to the budget at the start of the year and £1.515m would be set aside Corporately for price inflation and drawn down if needed.

It was noted that the report had also been considered at a recent meeting of the Children and Young People Scrutiny Committee where the committee had endorsed the budget proposals (Minute CYP/23/10)

Decision

The Executive approve the Directorate budget proposals as set out in the report.