Item 14 - Allocation of Residential Care Costs v2

West Dunbartonshire Council · 26 October 2022
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WEST DUNBARTONSHIRE COUNCIL
Report by Chief Officer - Resources
Council: 26 October 2022
Subject: Allocation of Residential Care Costs
1. PURPOSE
1.1 To provide Council with
• an officer recommendation on the split of residential care costs
between the Health and Social Care Partnership (HSCP) and
Education budgets
• an update on the one off 2022/23 increase in residential costs to be
funded from HSCP COVID funds
2. RECOMMENDATIONS
2.1 Members are asked to agree that:
• residential care costs for children under 16, or those in full time
education beyond that age,  be allocated on a 72% HSCP/28%
Education basis in 2022/23 and on a recurring basis
• the one off 2022/23 budget assumption, approved when Council set
the 2022/23 revenue budget, that £725k of 2022/23 residential care
costs for children under 16 should be funded by the HSCP should be
amended so that the Council’s education budget is allocated 28% of it
(£203k) with the balance of £522k (72%) funded by the HSCP
• the £203k Education share of the one off £725k element in 2022/23
be funded from general COVID funds.
3. BACKGROUND
3.1 On 9 March 2022, the Council agreed a balanced 2022/23 revenue and
capital budget and estimates for 2023/24-2024/25.  That budget included two
assumptions relating to the allocation of residential care costs between
HSCP and the Council.
3.2 Budget Assumption 1 - Recurring
The first was a recurring budget assumption that related to the fact that the
costs for residential care for children under 16 (or those in full time education
beyond that age) were shared on a 50/50 basis between the Council and the
HSCP.  This is because the overall care package has elements of both
education and residential costs.
3.3 This 50/50 split was agreed by officers a number of years ago at a time when
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the HSCP budget was part of the WDC Social Work budget. This split has
been retained as the agreed split of costs until the Council budget meeting in
March 2022.  Residential care invoices from external care providers do not
identify the split of costs between the educational and the residential
elements so it was not easy to accurately determine whether a 50/50 share
was an accurate reflection of actual costs incurred. 
3.4 A benchmarking exercise was undertaken to assess how a number of other
Scottish councils split the children’s residential service costs. Responses
received identified a variety of local agreements ranging from a similar 50/50
split to a council with an 80/20 split with the HSCP having the larger share.
The general rationale within councils who allocate more than 50% to the
HSCP is that it better reflects the cost of service delivery.   
3.5 The budget assumption agreed by the Council reallocated the total 2022/23
£5m residential care cost budget on a 77.3% HSCP/ 22.7% Education basis
(£3.865m for HSCP and £1.135m for Education). The motion stated:
Budget assumption based on the need to more appropriately reflect the split
of responsibility between the provision of education and funding all other
costs associated with bringing up children, including accommodation, food,
clothing, leisure activities and specialist care etc. Officers will carry out an
evaluation and make a recommendation to a future Council on the division of
this budget. As we move closer to the implementation of the National Care
Service it is vital that we correctly attribute costs; failure to do so could see
the Council block grant inaccurately top sliced when resources are
reallocated, putting our services at future risk.
3.6 Budget Assumption 2 – One Off
The second budget assumption was a one off one as in 2022/23 there has
been a need to increase the education costs for residential care costs by
£0.725m from £2.5m in 2021/22 to £3.225m in 2022/23 due to an increased
number of children in residential placements.  There was an assumption that
this increase is as a consequence of the impact of COVID on families. 
Consequently Council agreed that the education budget for residential costs
should kept at  the 2021/22 level of £2.5m and any additionality should be
funded by the Children & Families budgets that sit with the HSCP potentially
funded by the reserves as they relate to the previous funding transferred to
the HSCP by West Dunbartonshire Council.
4. MAIN ISSUES
4.1 Budget Assumption 1 – Recurring
After the 9 March 2022 Council meeting the Chief Officer Resources
contacted the ten current providers of residential care to ask them for a
breakdown of the weekly charge of the 27 young people they currently
provide a service to, and invoice the Council for. They were asked, as
accurately as possible, to split that weekly charge between costs associated
with provision of education and the costs associated with provision of care,

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including accommodation, food, clothing, leisure activities and specialist care
etc.  
4.2 None of the providers were able to provide that requested level of
breakdown primarily because they only have a unit price for each placement
and do not break it down into component parts to facilitate a split between
education and social care as part of the Scotland Excel Framework model.
Also any attempt to split costs would be further complicated  as providers get
some national government grant funding, donations, other income and use of
reserves which reduces the rate charged to local authorities lower than the
actual service costs. 
4.3 As the information from the providers was not sufficiently robust to determine
an accurate allocation of the overall expenditure officers contacted Scotland
Excel to ask them to provide, for Children's Residential Care Services, an
estimated breakdown of % Scotland Excel Framework Agreement rates for:
• Social Care Services
• Education Services
The request to Scotland Excel was to focus on the providers currently being
used by the Council. 
Scotland Excel provided the following
Provider HSCP Education
Crossreach 74% 26%
East Park School 63% 37%
Harmeny Education Trust Limited 54% 46%
Kibble Education and Care Centre 78% 22%
Spark of Genius (Training) Ltd 84% 16%
Young Foundations Ltd 81% 19%
Average 72% 28%
4.4 It can be seen that there can be material variances between different
providers however a reasonable approach to take is to accept the average of
a 72/28 split and adjust the Education budget assumption accordingly. 
The table below shows the totality of the change in the cost allocation from
the original 50%/50% split before the Council’s March 2022 Budget meeting
through to this revised 72%/28% split. It shows this would add £265,000 on a
recurring basis to the Education budget in 2022/23 and future years (when
compared to the 77.3%/22.7% budget assumption made in March 2022).
The £265k will need to be absorbed by the existing Education budget in
2022/23 and will increase the budget gap in future years.

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Original
Cost
Allocation
50%/50%
(£,000)
Revised
March 2022
Cost
Allocation
77.3%/22.7%
(£,000)
March
2022
Change
(£,000)
Revised
Costs
72.0%/28.0%
(£,000)
Change
(£,000)
Total
Allocation
Change
After
Review
(£,000)
HSCP 2,500 3,865 1,365 3,600 (265) 1,100
Education 2,500 1,135 (1,365) 1,400 265 (1,100)
Total 5,000 5,000 5,000
4.5 Budget Assumption 2 – One Off
After the 9 March 2022 Council meeting the S95 Officer of the HSCP Board
contacted the Scottish Government to seek approval for use of IJB COVID
reserves to fund the £725k referenced in paragraph 3.6 on the basis that
these increases were as a consequence of the pandemic in 2022/23.   The
Scottish Government replied to state that they expect IJB COVID funding to
be used in line with 2021/22 expenditure and as it was not reported as an
HSCP COVID pressure in 2021/22 due to it being considered an Education
pressure, they would not support the use of COVID reserves for this.
Consequently this requires a decision about how this £725k is funded in
2022/23.
4.6 Given that the £725k is for residential care costs the revised 72%/28% split,
if approved, is equally applicable which results in a split of these 2022/23
costs of:
• £522k  - HSCP
• £203k  - Education
4.7 It is recommended that the £203k of 2022/23 residential care costs allocated
to Education is funded from the Council’s general COVID fund. This will
leave £9k left in general COVID funds as at the end of period 5 (31 August
2022).
Conclusion on Allocation of Costs
4.8 As the providers cannot provide an accurate and robust breakdown of the
split in relation to a child’s 24 hour day in a co delivered care and education
setting which has been assessed to meet a child’s need, it is recommended
that the Council, on the basis of the analysis provided  by Scotland Excel, 
agree that the costs of residential care are:
• allocated on a 72% HSCP/28% Education basis in 2022/23 on a
recurring basis
• also allocated on a 72% HSCP/28% Education basis for the one off
£725k element in 2022/23.

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4.9 It is for the HSCP Board to manage its overall budget and determine how to
prioritise the funds made available to it by its two partner organisations.
Decisions on how to absorb any adjustment to cost allocation to more
accurately reflect service delivery will be a matter for the Integrated Joint
Board.  
6 PEOPLE IMPLICATIONS
6.1 None directly from this report
7. FINANCIAL AND PROCUREMENT IMPLICATIONS
7.1 The 2022/23 Council budget will have increased expenditure of £468k of
which £203k will be funded from general COVID funds. The balance of
£265k will need to be absorbed by the existing Education budget in 2022/23
and future years.
8. RISK ANALYSIS
8.1 None directly from this report. The investment and protection of our most
vulnerable children and young people to ensure their needs are met is a key
priority for the Council. However it is a matter for the HSCP to determine how
to spend the overall budget allocation for social care services. Any
adjustment increase of cost allocations to reflect service delivery should be
managed within the overall budget provided to the HSCP Board.
9. EQUALITIES IMPACT ASSESSMENT (EIA)
9.1 When a child becomes a looked after child, at home or away from home, the
Council becomes the Corporate Parent. The term ‘Corporate Parent’ means
the collective responsibility of the Council, elected members, employees and
partner agencies, for providing the best possible care and safeguarding for
the children who are looked after by us.
10. CONSULTATION
10.1 This report is a consequence of engagement between Education, HSCP and
Finance Officers to advise on the Council’s proposal.  The proposal will need
to be presented to a future meeting of the HSCP Board.
11. STRATEGIC ASSESSMENT
11.1 Local Benching Marking data shows that the Scottish average of use of
residential care in Scotland is 90% of looked after children are in residential
care. In West Dunbartonshire this is currently 89% of our Looked after
children with higher than average deprivation.
Going forward a collective approach should be further developed to ensure a
more sustainable model across HSCP and the Council working in
Partnership to achieve overall savings by developing local services, including

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increased foster care provision, supported accommodation for care leavers,
and intensive family support services to meet the needs of children  young
people. 
Laurence Slavin
Chief Officer - Resources
Date:  26 October 2022
Person to Contact: Laurence Slavin (Chief Officer – Resources)
E-mail: laurence.slavin@west-dunbarton.gov.uk
Background Papers
Budget Report to Council - 9 March 2022