The most significant item scheduled to be discussed during this meeting of the Public Accounts Select Committee was the financial health of the council. Also scheduled for discussion were children’s social care spending, an update on commissioning and contracting arrangements for adult social care, and the committee’s work programme for the year.

Financial Monitoring

The meeting was scheduled to receive a report on the council’s financial position. The document prepared for the committee noted that the council was reporting a forecast overspend on general fund activities of £27.4 million for the 2024-25 financial year.

The document noted that a budget gap of £20 million was identified as part of the council’s Medium Term Financial Strategy, and that it was proposed that £8 million of savings would need to be delivered across the general fund in 2024-25. The report broke the savings down by directorate, and included a red, amber, green (RAG) rating of the likelihood of their delivery, saying that:

At this early stage of the year, £6.8m of the savings are expected to be delivered and are on track, £1m require further work or verification of delivery and £0.2m are not expected to be achieved in 2024/25.

The report detailed how the overspend is broken down by directorate, and noted that £36 million of pressures funding had been added to the 2024-25 budget to address those overspends, but that as a result of continuing pressures:

the extended leadership team are working towards £31.5m of cost avoidance/reductions measures in 2024/25 and 2025/26 to address the General Fund pressure reported in this report, as well as £20m of savings measures from 2025/26 onwards to address the budget gap in the MTFS.

The document contained a breakdown of the cost avoidance measures proposed by the council’s leadership team, noting which of the proposals were included in the reported financial position for the meeting, and which were not yet included because they are still being developed.

The report also considered the dedicated schools grant (DSG) budget, which is ringfenced for spending on schools. It noted an overspend of £2.4 million against the high needs block, driven by the “place led element in respect of those placements made in other LA’s by Lewisham and vice versa (known as import/export adjustment) and also for those schools that have academised and will now be funded directly by the Education and Skills Funding Agency in respect of the place funding element”.

The financial position of the Housing Revenue Account was also scheduled to be considered during the meeting. The report noted a forecast overspend of £6.5 million “due to the volume and value of repairs and maintenance works exceeding the budgeted level”. The report suggested a number of ways that this overspend could be addressed, including seeking a contribution from the council’s general fund, or by reducing the HRA’s contributions to the capital programme. The report stated that:

EMT and the Housing Transformation governance are continuing to manage this closely and will be engaging with the Ministry of Housing, Communities and Local Government to ensure that they are appraised of the financial position of the HRA.

The document also contained an update on the delivery of the council’s capital programme, which is the money the council invests on long term projects, like building new schools and homes. It noted that for the 2024-25 financial year there was an allocation of £211.8 million split into £110.1 million for the general fund and £101.8 million for the HRA.

The report noted that the collection rate for council tax was below the level needed to achieve the budgeted level of income for the year, but that the collection rate for business rates was above the required level.

The final section of the report looked at the council’s Medium Term Financial Strategy, which looks at the council's finances over a four year period. The report noted that the strategy had identified £20 million of savings that need to be made over that period, and that work was already underway to identify and implement them.

Children’s Social Care and Budget Pressures

The committee was scheduled to consider a report on the budget for Children’s Social Care services. The document prepared for the meeting noted the “exceptional pressure on budgets” caused by a combination of factors including the cost of living crisis, inflationary pressures, and “considerable increases in the cost of externally commissioned placements”.

The document highlighted the increase in the number of children needing support from children’s social care, noting that:

In the national context, with rising demand for support and protection services locally, Lewisham has managed the impact through the CSC improvement programme.

The report detailed how the council has worked to improve the service and reduce the need for children to be taken into care. In particular, it highlighted the impact of the council’s decision to “in-house” the services previously provided by the Meliot Family Centre, and how the expansion of that service has:

Successfully reduced reliance on more expensive agency staff with permanent staffing rising from 64% in 2018 to 80% in 2024.

The report included a table showing how the cost of different types of placement has changed in recent years, highlighting the increased costs of residential care in particular. The report noted that:

At present Lewisham has no local council run children’s homes and a relatively small pool of in-house Foster Carers, so internal placement sufficiency is limited.

The document outlined a series of steps the council is taking to address these challenges, including joining a pilot scheme to explore how delays in the family court can be reduced. It noted that:

As part of this pilot combined with the DfE Family First Pathfinder programme, we are introducing a Court Progression Officer post to contribute to moving CYP through court proceedings without delay.

The report also noted that the council is considering a number of options to reduce reliance on externally commissioned placements, including building its own children's homes, and that:

In September a proposal is being put to Mayor and Cabinet to re-purpose current buildings in the CYP Directorate asset register, to create and manage a series of council run small children’s residential homes in Lewisham.

Commissioning and Contracting in Adult Social Care

The committee was scheduled to receive an update on commissioning and contracting arrangements for adult social care. The document prepared for the meeting noted the financial pressures facing the adult social care sector, and the challenges of providing high quality care to an ageing population.

The report contained a summary of the key duties of local authorities under the Care Act 2014, including the duty to assess people’s needs and decide how to meet them. It noted that:

After the assessment, the local authority must determine using the national minimum threshold (which is set out in regulation) whether the Client is eligible for care and support. If deemed eligible, the Local Authority must meet these needs, regardless of resources available.

The report explained that the council has taken a number of steps to reduce the costs of providing adult social care, including working with providers to deliver services in a more cost-effective way. In particular, it noted the impact of the council’s decision to “cap” the budget for the Maximising Wellbeing at Home service, saying that:

The capitated budget fixes the Fair Cost of Care rate for the five years of the contract. Quality is enhanced through access of staff to Solution Focused coaching which enables Wellbeing Workers to develop innovative solutions to enable Clients to maximise their wellbeing as well as improving their terms and conditions by being fully compliant with the UNISON Ethical Care Charter.

The report contained a section on “Risk Implications”, setting out the key risks facing the service and how the council is working to address them. This included the risks of rising costs, increasing demand, workforce shortages, and maintaining the quality of provision.

Select Committee Work Programme Report

The committee was scheduled to consider a report on its work programme for the year. The document provided for the meeting contained the committee’s terms of reference, which detail the areas the committee is responsible for scrutinising. It also included a list of the items the committee had already decided to look at during the year, and a forward plan of key decisions that the council is expected to take over the next four months. The report recommended that the committee:

Look at the forward plan of key decisions at Appendix E to consider whether there are any items for further scrutiny.

It also recommended that the committee:

Consider the items for the next meeting and specify what evidence is required, including being clear about the information the committee wishes to be included in officer reports.

The next meeting of the committee was scheduled to take place on 28 November 2024. The report noted that:

The following items are scheduled for the next meeting. For each item, the Committee should clearly define the information and analysis it wishes to see in officer reports. If the Committee has designated one of its members as a climate change champion, that member should work with the Chair to ensure that officers are given appropriate steers in relation to the reports, to ensure they include relevant climate change considerations.

The Committee should also consider whether to invite any expert witnesses to provide evidence, and whether site visits or engagement would assist the effective scrutiny of the item.

Agenda Item Review type

Budget cuts Standard item

Financial monitoring Performance monitoring

HR budget Standard item