Agenda item

Children's Services Organisation Decisions - Contract with Children's Services Organisation for the Delivery of Children's Social Care Services

Decision:

(a) That the Chief Executive, following consultation with all Commissioners, be given delegated authority to enter into the following arrangements with Slough Children’s Services Trust Limited (CSO):

i. the completion of the Services Contract for children’s social care and SEN functions on terms which manage the Council’s concerns and risks

ii. the completion of the following:

a. licences to occupy by the CSO of :

i. ground floor west of SMP

ii. space within Britwell Community Centre

iii. Breakaway

iv. Mallards

b. the completion of a sub lease for Connaught House, High Street by the CSO on terms to be agreed

iii. the completion of the services support agreements between the Council, the CSO and other 3rd party suppliers on terms which manage the Council’s concerns and risks

(b) To recommend to full Council the arrangements and agreements for the

i. setting from the Council’s budget the CSO budget, in line with the funding position detailed in tabled paper and update at the meeting.

ii. the Council’s pension liabilities arising from the CSO

iii. managing and mitigating the Council’s liabilities on exit of the service delivery contract

(c) Agree not to implement the decision of Cabinet ( December 2014) in relation to the extension of the contract for the provision of education services between the Council and the Mott Macdonald Ltd (Cambridge Education).

(d) That relevant Commissioners or Cabinet receive an overview of the CSOs improvement plan at the earliest opportunity.

Minutes:

The Strategic Director of Customer & Community Services introduced a report which updated the Cabinet on the progress of the Children’s Services transition project and the Assistant Director Finance & Audit tabled a paper with further detail on the budget position and financial implications. Approval was sought to delegate authority to finalise the services contract and recommend to full Council the funding to be transferred for the Children’s Services Organisation (CSO) budget. The contract term would be for six years, with a break clause at four years available to the Minister.

The Cabinet were briefed on the background and process undertaken to date to ensure a safe and fit for purpose transfer of children’s social care services to the CSO, Slough Children’s Services Trust Ltd, in line with the two Ministerial Directions. The transfer was recognised as being complex, with significant risks, and whilst there was more work to be done prior to sign off, both parties shared the aim of resolving critical matters in order to go live with the transfer from 1^st October 2015. Some key work streams had not been concluded and these would be completed after the go live date.

The Cabinet noted the position in relation to staffing and TUPE arrangements, pensions, accommodation, support services and governance and were advised that there were three key issues to finalise from the Council’s perspective prior to entering into the contract:

The improvement journey – i.e. to meet the commitment in the contract which would require the CSO to achieve a ‘good’ Ofsted rating within 3 years of go live and ‘outstanding’ within 5 years.
Agreeing a model and budget envelope which delivered the required service more cost effectively, reducing costs and achieving savings over the life of the CSO, meeting the principles from paragraph 7.17 of the report.
Exit strategy – the Council remained concerned about several issues including the potential liabilities for redundancy payments for staff that would not transfer back to the Council on termination of the contract.

The Cabinet recognised these key outstanding issues and emphasised the importance of resolving them successfully prior to the finalisation of the contract and requesting full Council to approve the budget transfer. Cabinet Members asked whether Officers were confident that a safe transition could be made in view of the critical issues to be resolved and the limited time available before the go live date. The Strategic Director stated that significant progress had been made since the previous report to Cabinet in July and Officers now had a greater level of confidence for example in the key, permanent appointments made by the CSO to its management team and the involvement of best practice from Achieve for Children that had been used in setting the Key Performance Indicators (KPIs). The Cabinet emphasised the importance of ensuring clear and strong performance management arrangements to enable the Council to effectively monitor services and the improvement journey, particular as the authority retained statutory responsibility for the service.

The Commissioner for Children’s Social Care in Slough appointed by the Department for Education (DfE), Eleanor Brazil, and the Chair of Slough Children’s Services Trust Ltd, Elaine Simpson, were invited to address the Cabinet and answer questions from Cabinet Commissioners. Ms Brazil drew attention to her letter to Members attached at Appendix E to the report and assured the Cabinet that the new organisation would be ready to deliver from ‘day one’. She stated that there was a need to address leadership and management issues which had been identified as a weakness and she was confident the new management team would bring expertise to Slough to accelerate the pace of improvement. Cabinet Members asked about the senior management and Board appointments and it was responded that the recruitment process for several non-executive members of the Board had attracted high calibre interest and it was anticipated that the Minister would confirm these appointments by 21^st September.

The supplementary information tabled set out the updated position in relation to the budget of the CSO and the wider financial implications for the Council. It was noted that the CSO had requested a budget of £27.3m for the first year, based on an 18 month budget position, which compared to the baseline budget for the service of £21.8m. Taking into account the current overspend of £1.3m and a further £1.3m risk / rewards share, there was a remaining budget gap of £2.9m. Ms Brazil informed Members that a sum of £2m had been sought from the DfE and a decision was expected by the Minister on or before 21^st September. The Cabinet emphasised the importance of confirming this decision prior to asking full Council to approve the budget allocation at their meeting on 22nd September. The residual gap of £0.9m was proposed to be filled from SBC funded Invest to Save money, subject to sufficient bids. Over the longer term, the Council contribution to the CSO would reduce as detailed in section 7 of the report, albeit from the higher baseline set in year 1.

Commissioners asked a number of further questions of DfE and CSO representatives and asked for the justification for the additional investment sought from local taxpayers, given the fact previous inspections had recognised adequate resources had been provided to the service and the expectation that expertise brought to Slough by the new management team appointed by the CSO should be able to deliver service improvements at lower cost. Ms Simpson confirmed that the requested budget had been subject of rigorous analysis and due diligence and that the additional funding was required to improve and transform the service.

Members were also very concerned about the potential and impact of any CSO overspend, and the implications the base budget increase would have on other key services delivered by the Council. In view of the significant potential pressures across all Cabinet portfolios, it was agreed that delegation to the Chief Executive in recommendation (a) of the report be extended so that the contract could only be entered into following consultation with all Commissioners.

Cabinet Members asked to see the CSOs improvement plan to provide assurance that appropriate actions and innovation was in place to improve services. Ms Brazil highlighted that the Council was under intervention and the new organisation was independent of the Council, with continued involvement of the DfE to oversee improvement. Ms Simpson stated that part of this independence was that management team would be accountable to the company board. Reports and key documents would therefore be considered by the CSO and the improvement plan would be shared with the Cabinet portfolio holder for Education & Children after that. The Cabinet acknowledged that they would not see all CSO Board papers, however, in view of the critical importance of the improvement plan both in terms of justifying the additional Council investment in the service and the Council’s ongoing statutory accountability, they requested that an overview of the short term improvement plan be shared with the Cabinet Member as soon as possible, and prior to the finalisation of the contract.

Speaking under Rule 30 of the Council’s Constitution, Councillor Strutton stated that he felt the transfer to the CSO provided an opportunity for a fresh start for the service and asked whether the KPIs had been agreed by both parties. Ms Simpson responded that the process was almost complete with overall KPIs agreed with further work to finalise some of the baselines yet to be completed. In response to a further question, it was noted that there may be changes to senior management post transfer but the CSO would have robust systems in place to manage costs and liabilities.

At the conclusion of the discussion, the Cabinet agreed to delegate authority to the Chief Executive to enter into the contract with the Slough Children’s Trust Ltd, noting that resolution to several outstanding issues was still required prior to the go live date of 1^st October 2015. These included limiting future pension liabilities, exit costs and receipt of an improvement plan. It was also agreed that subject to the satisfactory resolution of outstanding issues, the Cabinet would recommend a budget envelope for the CSO from the Council’s budget to full Council on 22^nd September which comprised £24.4m base budget, plus £0.9m made available for appropriate Invest to Save projects and £2m of funding from the DfE to support improvement, subject to Ministerial agreement due by 21^st September 2015.

Recommended –

(a) To recommend to full Council the arrangements and agreements for the

i. setting from the Council’s budget the CSO budget, in line with the funding position detailed in the report, tabled paper and verbal update at the meeting:

· First year budget funding to a maximum of £24.4m towards the Trust’s requested budget of £27.3m.

· The £2.9m gap to be filled from the £2m requested from DfE to support the service (with a Ministerial decision to be made prior to the Council agreeing the budget on 22^nd September 2015), with the remaining £0.9m SBC funded Invest to Save (subject to bids).

ii. the Council’s pension liabilities arising from the CSO, limiting the future potential liability to the Council to address the concerns expressed by the Cabinet.

iii. managing and mitigating the Council’s liabilities on exit of the service delivery contract to minimise future costs to the Council.

Resolved –