Funding

Ask

That the Government:

Provides a fairer funding deal for Plymouth to maintain high quality services and protect the vulnerable

Specifically we request that the Government;

• Ensures fairer funding for children’s social care
• Reviews the Public Health grant for Plymouth and the basis of the allocation formula
• Removes the 3% maximum gains cap, reimburses Plymouth for the loss in Education Services Grant and funds the gap between Plymouth schools and similar LA schools even after the National Funding Formula implementation Ensures fairer funding for adult social care
• Recognises Plymouth as an Opportunity Area and the Government provides up to £1.3m in funding to support the Plymouth Challenge

Plymouth has seen its Revenue Support Grant from the Government fall from £76.6 million in 2013/14 to a　projected figure of £5.6 million in 2020/21. From 2018/19 Plymouth has been selected as a business rates pilot to retain 100 per cent of business rates collected instead of receiving grants.

The Council is having to save a total of £10.3 million to deliver a budget for 2018/19, which is equivalent to 5.6 per cent of its budget. The Council’s Medium Term Financial Strategy is projecting a further funding gap of around £20 million in 2019/20 and 2020/21.

Like many other councils Plymouth is seeing massive pressure in funding the rising cost of care and education as demand rises due to our changing demography. For example, the cost of providing adult social care services has risen by a further £4.8 million for 2018/19 and will continue to rise in future years due to the rising age of the population and the need to pay care staff the National Living Wage.

The Council is also having to fund an additional £3.2 million costs of providing care packages and support for vulnerable children. Other challenges facing the Council this year include a reduction of £405,000 in its public health grant and £586,000 reduction in Education Services Grant.

The Council will be responding to the Government’s consultation on Fairer Funding: a review of relative needs and resources. This considers a number of different approaches to measure the relative needs of local authorities as well as cost drivers such as population projections, rurality and deprivation. 

Plymouth ranks 69th most deprived when looking at the average score summary measure out of the 326 local authority districts in England and is ranked 56th out of the 152 upper-tier local authorities (IMD, 2015).

1. Adult Social Care

Ask

That the Government:

• Ensures fairer funding for adult social care

Plymouth City Council is proud of its commitment to the provision of social care to the most vulnerable adults in the community. However the funding levels we receive to discharge our duty are unfair coupled with increasing pressures on budgets as a result of the increase each year in client numbers as people live longer, plus the additional costs of more specialist care.

Whilst the three year improved Better Care Fund monies are a useful additional resource, they are time limited. Equally, the two years of Adult Social Care Support Grant provide much-needed funds to support the service, but the allocations are announced late and there is no future-proofing that we will continue to receive. If we assume we will continue to receive an allocation, there is no way of accurately forecasting the amount. Neither of these funding streams provide sustainable resources nor afford us the opportunity to forecast future resources.

Plymouth is therefore calling for an urgent and fundamental review of social care and health to get a long term, sustainable solution to the social care crisis that the most vulnerable people in our city deserve.

Context

Like other authorities, Plymouth accepted the Government’s offer of a fixed four year settlement and has taken into account Government proposals regarding business rate changes, new rules regarding New Homes Bonus, additional increases in the National Living Wage and the impact on social care contract costs when planning budgets. We are working in partnership with all Devon authorities as a 100% Business Rates Retention Pilot and we welcome this opportunity to increase and retain our business rates income.

As part of Government measures to help local authorities to fund Adult Social Care, Plymouth City Council has exercised its powers to raise additional Council Tax from the ASC Precept. We applied the maximum 2% Council Tax Precept in 2016/17 and revised 3% maximum for both 2017/18 and 2018/19, . However in an authority like Plymouth, with a very low council tax base, the precept that the Government allows brings in a small amount in comparison to the growing need in adult social care.

The city’s council tax base has 86% of properties in the Bands A-C with only 8% in the ‘average’ Band D. Every 1% increase in council tax for 2017/18 equates to approximately £0.950m. Therefore, the maximum 3% precept has only generated additional income of £2.850m when set in context against demographic and National Living Wage cost increases for 2017/18 totaling £4.4m.

The one-off Adult Social Care Support Grant allocation for Plymouth in 2017/18 was £1.3m however this is not new money but a redistribution of funding already provided as part of the New Homes Bonus. 　We acknowledge the new one-off allocation for 2018/19 but at a lower amount of £0.803m. It is difficult to forecast and budget using resources which are administered as one-off and with late notifications.

In the same way the Improved Better Care Fund allocations are effectively reduced when set against the reduction in New Homes Bonus.

A shift in the population structure of Plymouth is forecast over the next 20 years as the proportion of the population aged 65 and over increases. The ONS projects a rise in the percentage of the population in this age group, from 17.8 per cent in 2016 to 22.3 per cent by 2034. Over the same time period, those aged 85-89 and 90 and over will have percentage increases of 91.0 per cent (an additional 3,600 individuals) and 104.6 per cent (an additional 2,400 individuals) respectively.

Demographic changes are predicted to see additional costs of £9.7m by 2019/20 compared to 2016/17 while the cost of the National Living Wage is forecast to rise from £2.2m in 2016/17 to a cumulative £9.6m in 2019/20. Overall, in the period 2016/17 to 2019/20 additional costs of £19.3m are anticipated against additional funding of £15.3m; a financial gap of £4m which will only increase in the future as people continue to live longer with increasing needs.

Plymouth City Council will continue its close working with key partners including the CCG to ensure the city derives the maximum benefit, however this is still a small sum of money given the financial strain on this service, and does not diminish the call for improved, long term funding.

Plymouth is therefore calling for an urgent and fundamental review of social care and health to get a long term, sustainable solution to the social care crisis that the most vulnerable people in our city deserve.

Proposals

With a rebased funding allocation and additional funding, Plymouth would be able to forecast its resources and be better placed for on-going discussions with key partners such as NHS (via the STP) and CCG to ensure we can provide the right care, to the right people at the right time.

Offers

We will continue to invest in low level preventative services that promote independence and wellbeing. For those requiring statutory services, we will ensure more people are supported at home and receive high quality residential and nursing care when they require this. We will deliver a high quality sustainable care and support market.

Benefits and Outcomes

Increased funding will ensure more vulnerable adults are supported in their homes.

2. Children’s Social Care

Ask

That the Government:

• Ensures fairer funding for children’s social care, enabling local authorities to focus more core resources on the delivery of preventative services in the longer term.

Context

The Queen’s speech announced the Government’s intention to bring forward proposals for consultation to improve social care. The Children Acts of 1989 and 2004 aimed to improve services for children by promoting early help and multi-agency working to bring about positive outcomes for children, young people and their families but these preventative duties have never been sufficiently funded.

In relation to Children’s Services Plymouth is not dissimilar to other authorities throughout the country. The national funding context is increasingly challenging and the Local Government Association has said there will be a £2bn shortfall in Children’s Services nationally by 2020.

• The percentage of children subject to multiple child protection plans in the City remained at 26.9% in 2017/18. The England average for 2016/17 was just below 18%.
• The number of looked after children in the City remains relatively steady (approximately 79.2 children per 10,000) and just below our statistical neighbours. However, there has been an increase in cost of placements driven by increased costs of providing care and rising complexity of need.
• Some of the most deprived neighbourhoods in the city have the highest number of cases of children with a child protection plan, taken into care or with a "Child In Need" status, for example, Barne Barton, Stonehouse and Devonport.
• In Plymouth there were 4,302 referrals to children’s social care in 2016/17 and 4,416 in 2017/18 which was an increase of 2.6%.
• The Joseph Rowntree Foundation published a report in November 2017 suggesting that absolute child poverty would increase by around 4 percentage points. Of that increase, around three-quarters (equivalent to 400,000 children) is attributable to benefit changes.

A 2017 study by the Early Intervention Foundation, found that children living in poverty, are at an elevated risk of multiple individual and family-level vulnerabilities e.g. increased levels of conflict; neglect; domestic abuse; adult substance misuse; and, poor mental health. The study found that economic hardship affects children differently - this is more visible in cognitive development and school performance in younger children whilst in older children this is more likely to present as social and emotional problems.

• At KS1 the % of all pupils eligible for FSMs meeting the required standard in phonics decoding in 2016/17 was 66%. This is 2% below the England average but 2% up from the attainment achieved in 2015/16, when we were 3% above the England average.
• The % of permanently excluded pupils from secondary school was 0.09% in 2015/16, up 0.02% from 2014/15.

At neighbourhood level, the Income Domain Affecting Children Index (IDACI) suggests that more than 8 out of 10 children in Barne Barton and more than 7 out of 10 in Devonport are affected by income deprivation. This is also the case with more than half of all children in the neighbourhoods of City Centre, Morice Town, North Prospect and Weston Mill. IDACI is defined as the percentage of children under16 living in income-deprived households.

The increased cost of Children’s Social Care cost and volume in 2018/19 is forecast as £3.2m while the LGA is forecasting a national funding gap of £2bn by 2020. Plymouth’s gap is forecast as £2m in 2018/19 and a further £3.8m over subsequent two years. There is potential for this gap to increase significantly if the roll out of Universal Credit increases child poverty.

Growing budget pressures will prevent us from investing in preventative and targeted early intervention work. This will increase downstream pressure to make statutory child safeguarding interventions feeding a negative spiral of increasing need and leaving children potentially at risk.

Proposals

If we are given the necessary funding we will be able to prioritise early intervention services whilst maintaining a high level of care for our looked after children. Our early help and targeted support offer will increase families’ resilience around crisis response and in the longer term this will reduce the need for safeguarding interventions and consequently reduce social work caseloads and the need for looked after children placements.　

Offers

In an environment of reduced budget and increasing demand on resources, it is critical to support and maximise the ability to:

• Provide early identification of risk factors in order to deliver prevention and appropriate ‘early help’ and targeted support that develop resilience.
• Identify complex need presentation and be supported to access the most appropriate service to meet the need.

Benefits

If the Council had an extra £1,000,000 we would ring fence it to provide preventative services and be able to begin to create a virtuous cycle that reduced pressure on services downstream.

Outcomes

Ensuring that our ‘front door’ to children’s services signposts appropriate services to prevent family breakdown and reduce the number of children escalating to higher levels of need, protecting them from harm more effectively than safeguarding interventions downstream. This will lead to improved outcomes, better mental health and a safer transition to adulthood.

3. Public Health

Ask

That the Government:

• Reviews the Public Health grant for Plymouth and the basis of the allocation formula.

Context

Despite persistent lobbying of the Government, Plymouth still receives a lower than expected Public Health grant based on its needs. Since taking responsibility for Public Health in April 2013, public health in Plymouth has been underfunded by approximately £3 million per year (£13pp).　 This continued under-funding has resulted in Plymouth being unable to address growing health inequalities, leading to poorer outcomes, lower life expectancy, reduced economic productivity and escalating demand on health and care services. In the 2018/19 funding allocation Plymouth (£57pp) get less than fellow Key Cities: Portsmouth (£82pp); Derby (£74pp) and Southampton (£66pp).　 Each of these areas has better health outcomes than Plymouth.　

With more than 75,000 Plymouth city residents living in the Country’s 20% most deprived areas (IMD 2015), Plymouth’s needs are well documented and accepted. Without a fair funding formula that recognises this need, Plymouth will be unable to fully support and contribute towards improved health outcomes across England. Health and wellbeing outcomes for people in Plymouth are generally poorer than in the South West and much of England. Outcomes for Plymouth’s population are worse than the England average for 10 out of 31 measures included in Public Health England’s General Health Profiles (2017). In addition, there is currently a life expectancy gap of 9.9 years between neighbourhoods in the city. Closing that gap is "crucial to the city thriving and an outstanding quality of life being enjoyed by everyone" (Thrive Plymouth) and this becomes increasingly difficult with the high levels of need not recognised by appropriate funding.　 These funding issues could be addressed if:

(1) There was a target allocation sum and a commitment to move each local authority to a ‘fair shares’ allocation position based on need.

(2) The recommendations of the 2015 Advisory Committee on Resource Allocation (ACRA) review (‘Public Health Grant: Proposed Target Allocation Formula for 2016-17’) were implemented in full.

Proposals

Plymouth’s ability to invest money in innovative programmes of work aimed at tackling health inequalities has been restricted by historical underfunding, which means that there is little scope to invest money into anything other than mandated services.

Offers

As long as Plymouth continues to be underfunded, the economic losses to the city will add up year-on-year. This will have a negative impact on attempts to improve the poor health outcomes experienced by the city’s residents. This will significantly impact the whole health economy. Plymouth and the NEW Devon CCG area is significantly challenged and has been identified by NHS England as one of three areas in need of additional support to protect and promote services to patients through the Success Regime. This underfunding means that there is little scope for investing money into anything other than mandated public health services and restricts the innovation necessary to address the poor health and wellbeing-related outcomes.

Benefits

If Plymouth received its fair share of funding we could:

• Lead more smoking cessation work in our secondary schools
• Continue the battle against illegal tobacco
• Support more people drinking at increasing and higher risk levels who are not typically seeking help for an alcohol problem
• Establish a supervised tooth brushing project
• Support activities like ‘Child Safety week’
• Continue our work to eradicate food poverty in Plymouth
• Increase our substance misuse service offer
• Increase our sexual health services offer
• Improve the health of young people by employing more school nurses
• Support more schools to become health accredited as health promoting institutions
• Support partners to use natural green spaces to deliver a range of activities that engage local residents and promote active citizenship
• Support more people to achieve and maintain a healthy weight
• Extend the social prescription in the city.

Outcomes

The Government reviews the Public Health grant for Plymouth and the basis of the allocation formula recognising both "fair share" and the significant needs of the city.

4. Education and Schools funding

Ask

That the Government:

• Removes the 3% funding cap
• Reimburses Plymouth for the loss in ESG.
• Funds the gap between Plymouth schools and similar LA schools even after the NFF implementation
• Provides additional support for students from Plymouth Studio School
• Recognises Plymouth as an Opportunity Area and the Government provides up to £1.3m in funding to support the Plymouth Challenge

Proposals

1. Removal of the 3% funding cap

The Government has now announced the final decisions on the National Funding Formula (NFF) for Schools and high needs which will start to come into effect from April 2018. Plymouth welcomes the increased spending on schools over the next two years and the move to direct resources more equitably across the country. However the maximum gains cap remains at 3% therefore delaying the move towards equitable funding.

Plymouth is due to gain £10.6m under the National Funding Formula Schools Block (based on 2017/18 baseline pupil numbers). However, due to the gains cap Plymouth will only receive an additional £4.7m in 2018/19 and £8.7m in 2019/20 with the actual full impact of the formula not being implemented until future years (subject to future spending reviews).

One of the key principles of the National Funding Formula consultation was that pupils of similar characteristics should attract similar levels of funding wherever they are in the country (allowing for the area cost adjustment). So it follows that once the funding formula to be implemented is deemed fair, it should be applied to all schools on a consistent basis. This will not happen with the funding cap which prevents schools which have been underfunded for many years from receiving their funding entitlement.

2. Reimburse Plymouth for the loss in ESG

The Education Services Grant (General Fund) has historically been paid to Local Authorities to carry out statutory responsibilities for maintained schools. Central Government announced that this grant will cease in 2017/18 with transitional protection being paid to Local Authorities from April 2017 to August 2017. This cut in ESG (net of transitional protection) meant a loss of funding of £0.586m for Plymouth in 2017/18.

Plymouth has already lost £0.717m in ESG general fund in 2017/18 due to schools converting to academies. This will leave approximately £0.316m ESG general fund in 2017/18 compared to £1.619m received in previous years (£1.303m total loss in funding in 2017/18). There will be no ESG general grant from 2018/19 onwards.

Central Government has recognised that local authorities will need to use other sources of funding to pay for education services once the general funding rate has been removed. Many services involve a statutory function or duty and cannot be ceased. The Government allowed local authorities to charge maintained schools for the 2017/18 and 2018/19 shortfall in funding due to the cessation of the grant (subject to approval by maintained school members of schools forum).

Plymouth’s maintained schools were not in a position to fund the Government’s cut in ESG grant in 2017/18 or 2018/19 due to the delay in the funding formula where Central Government’s own figures show that only £4.7m of the £10.6m entitled to Plymouth under the National Funding Formula will be released to Plymouth schools in 2018/19.

The loss of ESG general fund has created a huge pressure within Plymouth’s revenue budget (£1.303m in 2017/18, and £1.619m in 2018/19) of which £0.586m and £0.804m is directly attributable to the cessation of the ESG general funding grant which cannot be recouped from maintained schools (with the remaining cost pressure due to the fact that more schools are converting to academy status).

Plymouth is left with many costs which were previously funded by the ESG general grant such as an annual £1.4m historic pension debt.

It should be acknowledged that Plymouth is unable to persuade maintained schools to agree to fund the local authority for the cut in the ESG grant in 2017/18 and 2018/19 when schools themselves received no additional funding in 2017/18 (due to the delay in the NFF) and only part increase in 2018/19 (due to the NFF 3% cap). In addition, it would be impossible to convince maintained schools to agree to fund the cut in the ESG grant which in turn would be used to finance the £1.4m legacy pension costs (many of which relates to schools who have since converted to academies).

The amount of ESG grant lost due to the funding cut amounts to £0.586m in 2017/18 and an additional £0.804m in 2018/19 (based on no further schools converting to academies). We therefore we ask that Central Government fund this £1.390m loss in local authority funding over these two years and address the issue of Local Authority legacy pension costs which were previously funded via the ESG general fund grant.

3. Funds the gap between Plymouth schools and similar LA schools even after the NFF implementation

The new formula will take 3 years to be fully implemented and in overall terms the total funding for Plymouth schools increases. However even with the additional funding Plymouth will continue to receive considerably less funding than the national average and in particular; Coventry, an authority with similar pupil characteristics to Plymouth. In a speech to the House of Commons in September 2017, Justine Greening highlighted the necessity to reform by stating ‘the manifest unfairness when Coventry receives £510 more per pupil than Plymouth despite having equal proportions of pupils eligible for free school meals’. However, under the National Funding Formula, Coventry will still be receiving £429 more than Plymouth in 2018/19 and even when the National Funding Formula is fully implemented (currently thought to be in 2020/21), Coventry will receive £4,822 per pupil compared to Plymouth’s £4,544 per pupil, a difference of £278 per pupil which equates to a loss of funding of £9.5m for Plymouth.

We would therefore ask that the National Funding Formula is reviewed to look at these disparities in funding between Local Authorities with similar characteristics to ensure that Plymouth receives at least the national average per pupil.

Schools in lower funded areas such as Plymouth have been making cuts for many years now and have reached the limit of where further cuts can be made. We recognise the work that the Department for Education has undertaken in supporting schools in making efficiencies, but we are struggling to understand where we can make even more cuts. On top of this all schools are expected to face significant additional costs which the Government does not intend to pay for, including the removal of the Education Support Grant.

4. That Plymouth is deemed an Opportunity Area and Government provide up to £1.3m funding to support the Plymouth Challenge.

The lack of targeting funding for school improvement/standards is also a great concern to Plymouth. Plymouth was allocated £0.066m in 2017/18 and expects a similar amount of funding in 2018/19 for school improvement. This compares with a previous budget of £0.537m.

Although some school improvement functions have reduced with the move to academies, the LA still undertakes a significant amount of work with schools in order to be the local ‘champion’ for better outcomes.

Plymouth City Council has established an Education Board consisting of a number of partners from the entire educational landscape, including the Department for Education, regional Teaching School representatives and elected Members.

Educational improvement is a key priority for Plymouth City Council as the need to maximise the life chances of the city’s young people is of paramount importance. We have a draft action plan which is out for consultation with partners and it is crucial that all stakeholders contribute to the plan and are engaged in making the work of the Education Board effective.

In addition, Plymouth was not deemed an Opportunity Area and therefore has not received additional funding under the Government’s social mobility package. Plymouth, the Regional Schools Commissioner and the DFE are working in partnership to form a Head Teacher Strategy Group to plan and share responsibility for the successful implementation of the first phase of the Plymouth Challenge initiative to lift confidence, capacity and performance in our schools.

We therefore ask that Government fund the Plymouth Challenge for between £900k - £1.3m.

Benefits and Outcomes

Plymouth 3% funding cap is removed helping to finance the historic and chronic underfunding the city has received over the last decade.

• ESG is reinstated which supports the City Council in balancing its revenue budget and funds the pension legacy costs.
• Funding the gap between Plymouth and similar LA’s after NFF implementation would ensure that all Plymouth schools have sufficient funding to support educational achievement in schools and will impact positively on standards.
• Plymouth is designated an Opportunity Area and Funding is allocated to support the Plymouth Challenge which in turn will support raising aspiration, progress and achievement in schools.

5. Homelessness

Ask

That Government:

• Revisits the new burdens assessment for the Homelessness Reduction Act (HRA) after 6 months of operation to ensure that the assumptions underlying the funding model are correct and the anticipated benefit of reduced reliance on temporary accommodation is realised.
• Pilots the proposed new arrangements for funding temporary supported accommodation in Plymouth on a ‘no loss’ basis.

Context

Our current forecast for 2017/18 is that, despite proactive homelessness prevention work, the number of people we have accepted a duty towards, and for whom we have had to provide temporary accommodation has exceeded the figure of 28 people being accommodated at any given time by 84% resulting in an overspend of £600,000.　

The Homelessness Reduction Act (HRA) comes into legislation in April 2018. The Government says that the HRA will significantly reform England’s homelessness legislation, ensuring that more people get the help they need to prevent them from becoming homeless in the first place.

The HRA places duties on local authorities to intervene at earlier stages to prevent homelessness in their areas. It requires local authorities to provide new homelessness services to all those affected, not just those who are protected under existing legislation

The HRA will increase the number of people who are eligible for services and will change how some services are delivered. The Government has provided new burdens funding to support provision of these services and for Plymouth this amounts to £371,876 over three years. This funding has been allocated to cover staffing costs that will be incurred in meeting the additional demand for services.

By delivering services in a different way we anticipate a significant reduction in homelessness costs and we have budgeted for £580,000 to cover the cost of providing temporary accommodation in 2018/19.

Proposals

In our response to the recent consultation on revised funding for short-term supported temporary accommodation we have suggested that Plymouth is well placed to operate as a pilot area for the proposed changes on a no loss basis.

Benefits

Statutory homelessness duties will be fairly funded ensuring that local authorities do not need to reduce other budgets to meet the gap.

Outcomes

Our ability to meet the new statutory duties imposed by the HRA will be sustainable in the longer term.

6. Business Rates

Ask

That the Government:

• Extends the business rate pilot to cover a three year period

Devon has been selected as one of 10 areas to take part in a national pilot allowing councils to retain 100 per cent of growth in business rates. Plymouth City Council will be the lead authority in the Devon Business Rate Pilot, which will encourage councils to work together to deliver growth in the region.

Taking part in the pilot will help provide stability for the 11 member councils by providing minimum funding levels and will mean more funding to invest in service areas at a time when local authority budgets are under intense pressure. It should also increase the resources available for investment in economic regeneration schemes across the region.

The pilot includes a "No Detriment" clause. This means that the pool can be no worse off than if it did not take part in the pilot. In addition the pilot has a higher threshold at which point an authority falls into the safety net which protects its income from Business rates at a higher level.

The pilot has been confirmed for one year. We are seeking clarity on whether the pilot will be extended but may not hear until the Draft Settlement for 2019/20 which should be announced in December 2019.　 We would ask that the Government extends the pilot to cover a minimum of three years to enable a robust evaluation.