Value for money

conclusion
Royal Borough of Kingston upon Thames
Audit 2010/11
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Contents

Summary report .................................................................................................2

Introduction ...................................................................................................2
Background...................................................................................................2
Audit approach..............................................................................................2
Main conclusions ..........................................................................................3
The way forward ...........................................................................................3
Detailed report....................................................................................................4
Review of the reasonableness of projections for income, fees and charges
in the 2011/12 budget ...................................................................................4
Review of the modelling and scenario analysis the Council has carried out
on cost reductions, focusing on demand-led services ..................................5
Review of the Council's arrangements for monitoring delivery of cost
reductions and their impact on service delivery............................................7
Review how the Council's asset management plan is reflected in
Destination Kingston.....................................................................................8
Review of links between Destination Kingston and the Council's workforce
strategy and plan ..........................................................................................9
Review the work done as part of One Kingston to understand the impact
of cost reductions on the Council's partners in the public and voluntary
sectors. .........................................................................................................9
Appendix 1 Action plan ..................................................................................11

Audit Commission Value for money conclusion 1

Summary report

Introduction
1 The VFM conclusion is the appointed auditor's professional judgement
on the Council's arrangements for achieving value for money in its use of
resources, based on criteria specified by the Audit Commission. From
2010/11, auditors give their VFM conclusion based on two criteria,
assessing whether:
■ the Council has proper arrangements in place for securing financial
resilience; and
■ The Council has proper arrangements for challenging how it secures
economy, efficiency and effectiveness.

Background
2 Detailed auditor guidance for the 2010/11 VFM conclusion is available
on the Audit Commission website. The guidance sets out the characteristics
of proper arrangements under the two headline criteria.

3 We presented our initial risk assessment and proposals for further work
to give the VFM conclusion to the Strategic Leadership Team (SLT) in April.
4 Our assessment of risks considered evidence from:
■ previous Use of Resources assessments;
■ our review of Council and Committee agendas, minutes and papers;
■ the self-assessment against the examples of arrangements set out in
the Commission's guidance prepared by the Joint Heads of Corporate
Governance;
■ reports on One Council Programme projects; and
■ discussions with key officers throughout the year.

Audit approach
5 We agreed a focus of work with SLT on six key areas for review:
■ reasonableness of projections for income, fees and charges in the
2011/12 budget;
■ modelling and scenario analysis the Council has carried out on cost
reductions, focusing on demand-led services;
■ arrangements for monitoring delivery of cost reductions and their impact
on service delivery;
■ how the Council's asset management plan is reflected in Destination
Kingston;
■ links between Destination Kingston and the Council's workforce strategy
and plan; and
■ work done as part of One Kingston to understand the impact of cost
reductions on the Council's partners in the public and voluntary sectors.

Audit Commission Value for money conclusion 2

6 The VFM conclusion must take a balanced view of the Council’s overall
arrangements. However, in order to adopt an efficient approach, we agreed
with SLT to use Adult Social Services as an indicative probe. This service
was selected because it is a demand-led service where the Council is
looking to work more closely with other partners, and services are provided
from several locations with various types of staff. Historically, it has been an
area of great pressure on budgets, and it is identified in Destination
Kingston as an area where the Council is seeking to transform services to
deliver them more efficiently and effectively.

Main conclusions
7 We found that overall the Council has adequate arrangements to ensure
its financial resilience and economy, efficiency and effectiveness in its
delivery of services. In particular:
■ the Council has considered and assessed the realism and robustness of
the proposal to increase income from charging for services;
■ savings plans are supported by clear analysis and have been risk
assessed for achievement and feasibility. There is a clear link to the
longer-term work on transforming community services, and officers
understand the resources needed to carry out this work. The Director
has sought independent challenge of the savings plan, which is
commendable;
■ the Council has a variety of sources of data to assess the impact of
changes on demand for services. It understands the main factors
affecting demand and cost of services, although it cannot always control
them. More work is needed to identify outcome indicators to measure
the impact on service quality;
■ the Council has a more coordinated approach to managing its assets,
setting up a dedicated corporate property function to manage all capital
and revenue expenditure. This will help it make more informed
decisions about using, sharing and disposing of its property;
■ the Council has identified the impact on staffing of its savings plans and
has restructured staffing to meet the requirements of Destination
Kingston; and
■ the Council recognises the impact of the changes it proposes on other
public and voluntary sector providers. It is actively working to agree how
to provide services in a different but more efficient way.

The way forward

8 We have agreed recommendations with the Council, which are set out in
the body of text and summarised in the action plan at the end of this report.

Audit Commission Value for money conclusion 3

Detailed report

Review of the reasonableness of projections for

income, fees and charges in the 2011/12 budget
9 The principal source of income proposed by Adult Social Services in the
2011/12 budget is from changes to the charging policy for home care. The
papers provided to Members set out the basis for officers’ assumptions and
how far these result from different aspects of the proposals. The income
was modelled based on information about existing users of the service and
is therefore robust.

10 The decision to change the policy has been controversial and subject to
review by the Scrutiny Panel as well as the public. The report produced by
officers for the Scrutiny Panel provided more detail on the assumptions
around charging more for personal care and compared the Council’s policy
against those of other London Boroughs. This demonstrates the Council has
considered and assessed the realism and robustness of the proposal to
increase income from this source.

11 Risks remain around achievement of the income targets, as service

users may opt out of day care rather than pay higher contributions. The
higher contributions for existing care users do not come into operation until
October 2011, but the Council is aware of the risk and the need to take swift
action to find alternative solutions to meet its budget if it does not achieve
the expected income from this source.

Recommendation

R1 Monitor achievement of income against the targets set for the change
in charging, and consider further action as appropriate if planned
income levels are at risk.

Audit Commission Value for money conclusion 4

Review of the modelling and scenario analysis the
Council has carried out on cost reductions, focusing
on demand-led services
12 The Adult Social Services directorate has carried out modelling of cost
reductions in line with the requirement for all service directorates to identify
cost reductions. The Council identified early in 2010/11 the need for savings
across all directorates on top of those identified as part of the one Council
Programme. These were to close the gap in that year’s financial
performance, and to prepare for cuts in government funding and rising
inflation. The Director of Finance presented a paper to SLT in July 2010
setting out the challenges to the Council and identifying specific risks
around:
■ the high costs of care for people with learning disabilities;
■ dealing with the handover of services from NHS Kingston; and
■ securing future funding.

13 Because of this, Adult Social Services, in common with all other

departments drew up a list of potential savings over 2010/11 and the
following three years. The Director of Finance and Head of Corporate
Finance oversaw this to ensure no double-counting of savings, and to hold
directors to account for producing robust savings plans.

14 Adult Social Services identified savings programmes from the changes in

social care of as part of the £2.4m target for Community Services in
2010/11, and achieved £0.7m. It has set a target of £2.3 million for 2011/12
and has currently identified £1.1 million to date, and is drawing up plans for
a further £1 million, leaving £0.2 million more savings to find. The
directorate has also made reasonable progress on achieving savings for
2012/13, finding £1.1 million recurrent savings against a £3.9 million target.
Officers have also identified other areas where additional savings could be
achieved which were more politically contentious.

15 As part of this, Adult Social Services set out in detail the savings,
identified, the impact on service delivery and potential effects on other
directorates or organisations. It also quantified the expected numbers of
staff affected, including whether posts were filled or vacant. This showed
there was a robust and clear approach to identify realistic savings in the
directorate. .

16 The savings plans are consistent with the Council’s plans to transform
social care as part of the One Council Programme. Areas of proposed
savings include comparing unit costs for residential homes run by the
Council against the independent sector. The Council also identified potential
savings from day care for older people, care for people with learning
disabilities and associated transport costs.

Audit Commission Value for money conclusion 5

17 The Council used this information and analysis to set out and agree with
Members options for reproviding services at residential homes and day
centres in a more cost-effective way. Officers clearly identified the impact on
service quality and on service users of the proposed changes, and gained
support and understanding for the proposals from Members.

18 Adult Social Services has a clear action plan for monitoring progress on
its project to transform social care, which is risk–rated for achievement. It
has identified the resources required to deliver the different strands of the
plan and risk-rates achievement of the associated savings. This shows a
clear plan for monitoring achievement and understanding of the resources
required.

19 At present, the monitoring does not include output measures of service

quality and user experience. From discussion with officers, they are working
on a framework to measure performance now that Care Quality Commission
inspections and national targets have ended. The IT infrastructure to
measure this is being put in place, and the Council intends to produce the
first run of data in October 2011, with full handover of the system to Adult
Social Services in December 2011. This is an area that needs development
for the Council to demonstrate to service users that it can preserve quality
while reducing the cost of services.

20 The new Director of Adult Social Services commissioned an independent

review of the directorate’s financial position, which includes a risk
assessment of the savings plans. This gave officers assurance that
processes for agreeing and monitoring against budgets and holding
managers to account, were working adequately. Over half of directorate
savings plans were rated as “green”, although most of the rest were amber
rated. More work is needed to embed the good monitoring procedures
across the directorate and to ensure all savings plans are robust and can be
delivered. Independent review of savings plans is a good discipline and the
Council might consider seeking external challenge on a cyclical basis of
other directorates.

Recommendation

R2 Consider seeking external challenge of savings plans in other service

areas, for example, from peer officers, to ensure they are robust and
realistic.

Audit Commission Value for money conclusion 6

Review of the Council's arrangements for monitoring
delivery of cost reductions and their impact on service
delivery
21 The Council’s project to transform community services reflects work
which pre-dates the current cut in government funding. A report by a
consultant in December 2009 set out options for reconfiguring services and
recommendations for the Council to consider, including the impact of
demographic changes, levels of ill-health and economic factors.

22 The Council has built up its understanding of the needs for services from
sources such as the Projecting Older People Population Information System
("Poppi") which provides information on the likely needs of older people over
the next 15 years. It also uses the information it already holds on children,
particularly those with learning disabilities, to predict the likely future
demand for services. In addition, the Council has information on individuals
receiving care at placements for residential and nursing care, and people
with mental health issues. It uses the information on existing placements
and costs to build up budgets and to monitor performance through the year.

23 Adult Social Services has produced papers setting out the challenges to
high costs services and the steps being taken to improve commissioning.
The Directorate identified the need to complete clear personal assessments,
robust assessment of need and associated cost, compare cost against
expectations and monitoring quality of outcomes for the service user against
service specification. All these are good arrangements for ensuring the
value for money of a service that has historically overspent.

24 Officers have also identified the numbers of children in high cost

placements who will come through into adult social services in the next ten
years. They have analysed different types of placements and expenditure
for children with different levels of need and the factors affecting this.
Clearly officers are aware of the areas of high cost and can assess the likely
future costs, although achieving savings in these areas may be more
challenging.

25 The Council’s aim is to minimise the impact of changes in service on the

quality of services provided. Officers are setting up a new performance
monitoring system with a mix of old national targets and local indicators, and
need to ensure that IT can support this system. More work is needed to
create output measures to assess the impact on quality of service, to
replace the old Care Quality Commission assessment process, where the
Council achieved good scores. The Council aims to create a balanced
scorecard for Social Services reflecting the agreed framework by
November 2011.

Audit Commission Value for money conclusion 7

26 Officers in Adult Social Services meet regularly to discuss performance
against the budget, reasons for variances and action being taken to address
them. Minutes of these meetings show there is clear monitoring of
performance against budgets, and managers are held to account for
achieving them. There is a monitoring spreadsheet for achievement of
savings plans which risk-assesses each area of saving for likelihood of
achievement. Officers identify mitigating actions and responsible officers for
each project, and highlight where savings are dependent on other
directorates or events. Adult Social Services rated projects totalling
£1.5 million of its £2.4 million plan for 2011/12 as "green" which is
encouraging.

Recommendation

R3 Create outcome measures to assess the quality of service for users

and set up IT infrastructure to support recording and monitoring of
performance against these measures.

Review how the Council's asset management plan is

reflected in Destination Kingston
27 The asset management plan published in March 2010 sets out the
general strategy for management of the Council's assets. It is clearly linked
to the overall One Council objectives set out in Destination Kingston, which
are restated in the document. It sets out the position for different types of
assets and sets out plans for reviewing the environmental impact of different
assets, their functional suitability including use of National Property
Management Indices. The document sets out the process for ranking
schemes for the capital programme.

28 As part of One Council Programme (OCP) 5 on asset management, the

Council set out an office demand management approach. This aimed to
coordinate moves of "office" staff to ensure they were carried out in a
rational and coherent manner between services. This paper displays a clear
approach to asset management linked to organisational goals, to increase
the benefits of collocation and ensure directorates do not make moves
which have an adverse impact on the Council as a whole.

29 As part of OCP 5, the Council set up a corporate property function to

oversee and manage all capital and revenue expenditure on property
assets. This will enable much greater coordination of the capital programme
with the Council’s needs and lead to closer links between capital and
revenue expenditure. It also enables the Council to have a clear overview of
the assets it holds and whether to hold, improve or dispose them. The
Council plans to refresh the asset management plan to include more detail
and form the basis of a more comprehensive plan for use of its assets. It
also plans to set up a member-officer group on asset issues, which will help
to raise the profile of this area.

Audit Commission Value for money conclusion 8

30 As reported to SLT, work being carried out also includes setting up a
Corporate Property Strategy, informed by the Strategic Fit Property Review,
and Maintenance Strategy. The Council is taking a more coordinated
approach to managing its property assets and ensuring they meet its
operational needs. It needs to tie decisions about using assets more closely
with its Commissioning Strategy.

31 The Council has specific examples of assets that are being declared
surplus to requirements and disposed of, which suggests it is making better
use of its assets.

Recommendation

R4 Ensure the Corporate Property Strategy informs the Council's

decisions on use of assets in providing services in line with its
Commissioning Strategy.

Review of links between Destination Kingston and the

Council's workforce strategy and plan
32 Adult Social Services has identified the links between savings and
staffing levels as part of its assessment of savings plans to determine how
many staff would be affected and whether posts were vacant or filled.

33 More widely, the Council has redesigned the structure of each directorate
to reflect its needs to become a more joined-up organisation, and has
recruited staff to the new posts from existing staff and external candidates.
The structure of the Council is designed to meet the requirements to deliver
a more responsive service to local people’s needs, as set out in Destination
Kingston.

Review the work done as part of One Kingston to

understand the impact of cost reductions on the
Council's partners in the public and voluntary sectors.
34 The Council has stressed the importance of personalisation of adult
social services and recognises the importance of choice for service users. It
has shown examples of working with voluntary organisations, such as Age
Concern and the Home Farm Trust to take over provision of day care
services where supply currently exceeds demand. It is also working with
Your Healthcare (the former provider arm of NHS Kingston) and local GPs
to explore how it can provide residential care in a more joined-up, more
efficient way. It has set up section 75 agreements with the local mental
health trust to pool funds to provide services for vulnerable people jointly. As
part of this, the Council is assessing what capacity there is in the NHS and
third sectors to take over the running of services it currently provides
directly.

Audit Commission Value for money conclusion 9

35 The Council has a vision of changing the model of providing care,
perhaps by a social enterprise as a more flexible and responsive facilitator
for service users to access different care providers. This would allow the
Council to concentrate on its core statutory role of assessing the need and
funding for service users. These plans are in their infancy but will require
engagement with the voluntary sector.

36 The Council has carried out much work in Adult Social Services, but
increasingly needs to look at how it works with other partners to continue to
provide services for vulnerable people in a more responsive and more
efficient way. This is particularly important given the scale of financial
challenges currently faced by the Council and other public sector entities.

Recommendation

R5 Work with partners in the public and voluntary sector to provide high
quality services for vulnerable people in a more responsive and
efficient manner.

Audit Commission Value for money conclusion 10

Appendix 1 Action plan

Recommendations

Recommendation 1
Monitor achievement of income against the targets set for the change in charging, and consider
further action as appropriate if planned income levels are at risk.
Responsibility Simon Pearce, Executive Head of Adult Care
Priority High
Date By March 2012
Comments From April 2011 Adult Social care charges have been increased for new
users. Existing users will see an increase from October 2011. Charges
have been increased and a new capital ceiling and income disregards
introduced. Furthermore the Council will now pay Personal budgets net of
contribution. This will produce both increased income and reduced
expenditure. The changing regime may also reduce the numbers of
people approaching the Council for help.
This monitoring is being done by monitoring income, but also by sampling
the revised financial assessment forms, which have been sent out to all
existing users. The data will be monitored at the Adult Social Care budget
meeting each month and reviewed by the budget part of the Transforming
Social Care programme board.
Recommendation 2
Consider seeking external challenge of savings plans in other service areas, for example, from peer
officers, to ensure they are robust and realistic.
Responsibility Simon Pearce, Executive Head of Adult Care
Priority Medium
Date November 2011
Comments Adult Social Care underwent a financial health check in April and May
2011. This was a helpful process, which offered external validation and
challenge. It may that such an approach is useful to other parts of the
Council. All directors to be briefed on the process undertaken in Adult
Social Care by the end of November 2011.

Audit Commission Value for money conclusion 11

Recommendations

Recommendation 3
Create outcome measures to assess the quality of service for users and set up IT infrastructure to
support recording and monitoring of performance against these measures.
Responsibility Simon Pearce, Executive Head of Adult Care
Priority High
Date By March 2012
Comments Work is already underway to improve performance management and
reporting in Adult Social Care. A new performance management
framework, based on "Transparency in outcomes", the new Department
of Health framework has been developed and agreed. Embedded in this
are user feedback measures, including local and national surveys. This is
linked to work on recording outcomes in the Council’s Adult Social Care
database: IAS. Specific project work, training and improved configuration
of that system is underway.
By January 2012 the Performance Framework will be fully populated and
will include quality and performance measures, some of which will be
gathered via the IAS system.
On the level of service providers and quality, Adult Social Care will
develop an enhanced database of providers, which will give basic quality
and performance data, including detail of Safeguarding performance.
This will be in place in by March 2012.
Recommendation 4
Ensure the Corporate Property Strategy informs the Council's decisions on use of assets in
providing services in line with its Commissioning Strategy.
Responsibility Simon Pearce, Executive Head of Adult Care and Andy Algar, Head of
Property
Priority High
Date by March 2012
Comments The Council now has a complete asset register, with property assets
categorised in relation to future use. Work is ongoing to map future asset
requirements.

Audit Commission Value for money conclusion 12

Recommendations

Recommendation 5
Work with partners in the public and voluntary sector to provide high quality services for vulnerable
people in a more responsive and efficient manner.
Responsibility Simon Pearce, Executive Head of Adult Care
Priority High
Date By February 2012
Comments The financial and demographic pressures facing RBK are such that the
Council will not be able to continue to provide Adult Social Care on the
existing model in the medium term.
Therefore an expanded Transforming Social Care programme is
proposed, which was agreed in outline by the Council’s Senior
Leadership Team in August 2011. This will involve strategic work with
local third sector and social enterprise providers to change the model of
service provision. This is likely to be a 2 to 3 year programme. Further
details to be agreed by Members in late 2011 or early 2012.

Audit Commission Value for money conclusion 13

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