Tuesday, 14th August 2018

The Nature of the Crisis

The Nature of the Crisis

I took a pause between postings in the last month- partly for a holiday and partly for reflection. I needed both.

I needed to reflect because I felt a deep sense of failure about the Tandridge Local Plan, which I won’t bang on about here, but its final form was so far from what I had hoped and imagined that I had to look back and reflect on where I had failed to oppose vigorously enough, and where my arguments fell short. I suffered a severe bout of the old black dog.

I needed to know whether I could do better.

But I got through it.

And the new challenge is to face up to something really fundamental. Whatever the background and financial management in the past, top tier councils are now all on the edge. The fate of Northamptonshire is nearly being shared in East Sussex and, if truth be told, councils across the country are faced with impossible challenges. In Surrey, it is perhaps most poignantly expressed by an intractable problem which I have no idea how they will solve- Children’s Services are in Special Measures, but the CEO has said they will take many millions out of the children’s budget. Currently the council is working up “business cases” which will set out where savings will come, and the final figures are yet to be confirmed; I can’t share the draft figures yet as they are not in the public domain. Suffice it to say that the proposed saving in Family Services is the largest single figure across the council, so I don’t understand how the scale of improvement required will be possible.

I was interviewed, ten days ago, by the Children’s Commissioner the government sent in to assess whether SCC has the capacity to manage its way out of Special Measures. He had come up from Cornwall by plane from Newquay. You would think that with our own Director of Children’s Services himself a Children’s Commissioner, the expectation would be that he could be trusted to get it right. But the scale of the financial challenge surely means that he will find the task almost, if not completely impossible?

The problem is, I don’t know the answer. And I suspect many leading members, tasked across the country with sustaining a legal level of service when bankruptcy sits like a crow on their shoulder will not know how to ensure their services are good either.

The problem is that, as everyone knows, you can control a budget if you want to when your spending is discretionary, and you can decide what to spend and what to cut. That part of the budget at Surrey is now, I believe, under control.

However, the budget pressures come from non-discretionary spending over which no council officer or member has any control, and this non-discretionary pressure is now being re-enforced by High Court judgements in judicial reviews sought by, say, parents of children with special needs.

If a child is thought to have a defined special need, the school, educational psychologists and other colleagues will work to identify a plan to meet those special needs and in assessing them, affordability is not the important criterion. The needs of the child, legally, must be met within a provision that meets the needs in a non-discriminatory way. This will result in an agreed Education, Health and Care Plan (EHCP) which will set out how the child’s needs must be met. It is an expensive process. In Surrey, before the plan can be agreed, the school must demonstrate that it has spent £11k of its own resources to try to meet the needs yet needs remain unmet. The cost of the provision set out in the plan then spins out to transport to the special placement, possibly 1:1 support for the child and possibly also a residential setting. This spending is not in the control of the council in so far as if the needs can’t be met within the county a placement must be found elsewhere. (Avid readers, if there are any, will recall that I proposed a motion at Council , which was agreed unanimously, that special needs provision should be enhanced in-County, so as to mitigate some of these cost pressures by reducing reliance on out-of-County services.)

Demand for EHCPs has escalated beyond all expectations and well in advance of what has been, or, it seems, can be predicted. Children presenting with autism spectrum disorder are increasing in number in an unpredictable way. As I write, a judge has found that the exclusion of a child from a primary school for hitting and punching a teaching assistant and pulling her hair, is illegal, as the child cannot control his impulse to hit and the school has failed to meet his educational need. I have no idea how this will impact across schools and the Department for Education is reflecting the judgement. For the one-form entry infant school where I am chair of governors this could have major implications.

With the unpredictable increase in costs of providing such needs SCC is needing to make extra provision to meet needs which are a legal entitlement, and which cannot go unmet. Such extra provision means making substantial extra savings in the Medium Term Financial Plan this year.

The other area of SCC spending which cannot be avoided is the escalating cost of adult social care, even though a proportion of it has to be met by the person receiving such care. As it is, care homes for the elderly are financially stricken if they have county funded residents because the County pays less than the cost of the placement in fees. Homes have to use escalated fees for those who self-fund their care to make ends meet. (So granny’s thrift in having savings which will be used to fund her care is subsidising the fees of those with no savings.) Where a nursing home placement is required, some county costs can be defrayed to the NHS, through the system of “Continuing Care”, an arcane and almost impenetrable system to enable the means tested social care costs to be part met by Health, which is not means tested. (This is a bizarre system which I will spill the beans on in a future episode!)

Residents will consistently be told “we have an ageing population”, which means costs are escalating and as the legislation currently stands, there is no realistic means to cap these costs. Thresholds of eligibility have been lowered as far as legally possible for some years.
Add this to a situation where the government grant to counties has been cut to nothing from this year onwards, and reserves, as in the case of Northamptonshire, have been exhausted, this leads to what’s called “the bare bones offer.” This recognises the uncontrollable increase in statutory demand and costs while councils must legally also produce a balanced budget.

The Public Sector Executive blog says:

“Plans to drastically cut back services and replace regular provision with a scaled-down ‘core offer’ of statutory services could become the new normal, leaders have warned.

The stark warning from the County Councils Network (CCN) comes on the same day as Northamptonshire councillors meet to decide on a dramatic programme of cuts as a result of starved pockets and emptied reserves.

……..members will vote to reduce services to the statutory minimum—meaning the very least that the council legally has to provide—in a bid to save £70m this financial year. If insufficient action is taken, Northamptonshire could face an economic blackhole as big as £180m by 2021.

In answer to this, the CCN has argued that a lethal mix of cash reductions from central government, rising demand, and an “unfair funding” formula could lead to a £3.2bn shortfall over the next two years, pushing more authorities over the edge and forcing others to issue section 114s as basic ‘core offers’ become the norm.

The network also said that counties are most at risk of following East Sussex’s steps to end all but essential local services in order to be able to balance the books in future years—a legal duty that all councils must abide by.”

If we get to the “base bones” offer in Surrey, we can say goodbye to libraries (I understand that keeping one open constitutes offering a bare-bones service) and, which worries me most, an end to Children’s Centres.

As Leader of the Opposition on Surrey County Council I have to lead campaigns to protect the vulnerable, to defend the most important services the vulnerable depend on, and I need to campaign to support fairer funding for essential, and legally compulsory, services.

Let’s hope I make a better fist of that campaign than I did on the Tandridge Local Plan.