The Corporate Policy Development and Scrutiny Panel met to discuss significant budget pressures within Children's Services, the performance of the council's commercial property portfolio, and the strategic direction for the council's future operations. Key decisions included progressing a cost-neutral change to the Local Council Tax Support Scheme and agreeing to further develop a Case for Change initiative aimed at transforming council operations.

Children's Services Budget Report

The panel received a detailed report on the significant overspend in Children's Services, which reached £10.2 million in the last financial year. The majority of this overspend, £8.1 million, was attributed to residential placement costs. Councillor Mark Elliott, Cabinet Member for Resources, highlighted that this was not due to an increase in the number of children in care, but rather the escalating costs charged by external providers. He noted that national market failures, including high profit margins for private equity-backed children's homes and a lack of local provision, were contributing factors.

The panel heard that the council is paying over £1,000 per week more than regional comparators and £1,500 per week more than statistical neighbours for similar placements. To address this, the council is increasing its own in-house provision, with the repurposing of Charlton House into a special school and children's homes being a key initiative. Officers also detailed efforts to manage demand through rigorous budget monitoring, weekly care and resource panel sign-offs for new placements, and a focus on reunification work.

Several councillors raised concerns about the high costs and the market's impact. Councillor Toby Simon questioned the averaging of income variations and the benchmarking of the council's scheme against others. Councillor Jess David inquired about regional collaboration to address the shortage of residential places. Councillor Toby Simon also raised concerns about unregistered placements and the quality of residential social work. Councillor Colin Blackburn described the system as broken and questioned government action on profiteering. Councillor Kevin Heathcote sought clarification on the total cost of children in residential care and the number of foster carers.

In response, officers explained the complexities of the market, the efforts to negotiate better rates, and the ongoing work to increase in-house fostering capacity. The council's commitment to keeping children safely at home where possible was emphasised, alongside efforts to improve the efficiency of commissioning and brokerage.

Commercial Property Update

The panel received an update on the performance of the council's commercial estate, which comprises 245 properties generating a headline rent of £15.58 million. Councillor Mark Elliott reported that the estate is resilient, with 99.5% of properties meeting minimum energy efficiency standards. Voids have decreased from 47 in 2022 to 38, and capital works are underway to bring void properties back to market.

Discussions touched upon the funding arrangements for major works, with a move towards corporate supported borrowing and the introduction of sinking funds in new leases. Councillor Colin Blackburn raised questions about revenue uplifts from South Quays and the timing of rental income from Morley's. He also inquired about the number of vacant properties awaiting works and the benchmarking of the council's performance against other major landlords. The lease buy-back from M&S was also discussed, with assurances given that a decent deal had been secured.

Councillor Toby Simon asked about the management of residential properties above shops and efforts to maximise their availability, given the housing shortage. Officers explained that these are managed through housing associations and right-to-buy tenants, with opportunities to release upper floors for residential use being explored.

Case for Change

Councillor Mark Elliott presented the Case for Change report, outlining the council's ambitious plans to transform its operations in response to significant financial challenges, including a requirement to find £28 million in savings over the next three years. The report highlights the impact of the Fair Funding Review, rising costs in children's social care, and the need to adapt to evolving local government roles.

The proposed approach focuses on becoming a more relational, preventative, neighbourhood-based, and digitally enabled council. Key workstreams include improving commissioning and procurement, strengthening relationships with families, delivering effective neighbourhood services, and making better use of technology. The panel was informed that a draft transformation plan would be developed for scrutiny before being presented to Cabinet.

Councillor Jess David asked if bringing services back in-house, similar to successes in adult social care, would be considered. Councillor Simon McCombe inquired about the implications of working differently with parishes. Councillor Toby Simon asked about the strategy for Charlton House and the potential for charging special expenses in unparished areas. Councillor Duncan Hounsell suggested providing capacity support to parish councils to enable them to take on more responsibilities.

The panel agreed to move its November meeting to the 10th to allow for earlier scrutiny of financial details related to the Case for Change initiative.

Panel Workplan

The panel noted its future workplan, with items including updates on Being Our Best (BOB), Aequus, and the Case for Change scheduled for the November meeting.

Decisions Made:

• A proceedable option for the Local Council Tax Support Scheme, which fixes a genuine unfairness without cost to the council, will be reported to the panel in January.
• The council will continue to develop the Case for Change programme as a key strand of the Medium Term Financial Strategy (MTFS).
• The panel's November meeting was rescheduled to the 10th to allow for earlier scrutiny of financial details related to the Case for Change initiative.

Decisions Still to Come:

• The full transformation plan, responding to the Case for Change, will be presented to scrutiny panels in October and then to Cabinet in November.
• Further details on the strategy for Charlton House will be provided.
• Discussions with parishes about working differently will take place.
• Updates on the Being Our Best programme, Aequus, and the financial elements of the Case for Change are expected in future meetings.