Spending on children number one worry, says Hillier 

27 Jun 19

Financially squeezed social services and schools have become the top concerns for the chair of the government’s public spending watchdog.

Academy failures, schools dipping into reserves and councils overspending on social care have all contributed to public spending on children rising up the agenda for Public Accounts Committee chair Meg Hillier.

“The Department for Education now tops my departments of concern,” Hillier wrote in her fourth annual report, out today.

“The continuing financial strain in schools, lack of grip over academies and failure to improve children’s social care combine to present a worrying situation.”

The proportion of councils overspending on social care has increased from 63% in 2010-11 to 91% in 2017-18, Hillier’s report highlighted. The total national overspend on children’s social care in 2017-18 was £872m.

Hillier told PF the strain that social care – including for older people – is putting on councils is leading them to take desperate measures, such as wide-spread investing in commercial property. “It’s a concern rumbling through the system. It takes just one sector to collapse, [such as] office space, and it could have a big hit on a council’s budget.”

She also told PF lots of councils are spending widely different levels on children’s services but that it appeared this could not be explained. She suggested councils focus more on ensuring they intervene early when issues with a child have been identified as “if things go wrong you are dealing with a crisis”, which will be more costly, Hillier said.

Brexit has remained a worry for Hillier this year, most particularly the government’s lack of transparency in sharing information about plans, preparations and costs with industries and business communities that need to prepare and develop their own plans as well as Parliament.

“Our work on Brexit over the past 12 months has highlighted that this lack of transparency applied not only to Parliament, but also within the Whitehall machinery and, crucially, the stakeholders, businesses and public that are expected to be able to accommodate new systems and processes at short notice.”

Hillier added in her report: “I am becoming increasingly concerned that departments are struggling to cope with Brexit preparations in addition to existing commitments and ‘business as usual’ issues”.

The sustainability of finances in the Department of Health and Social Care was also highlighted as an issue, with 101 of the 234 NHS Providers (NHS trust and foundation trusts) in deficit at the end of the financial year and NHS Providers with a total deficit of £991m.

“Financial sustainability influences patient care”, the PAC chair wrote in her report. “Funding is not reaching the right parts of the system.

“We have seen the reality of financial pressures at trust and local level”. She pointed to a recent PAC report that found waiting times for cancer and elective care were increasing in certain areas, putting patients at risk.  

NHS staffing shortages were also named as “one of the biggest challenges facing the NHS in delivery of its long-term plan”. “The current number of vacancies is unsustainable,” Hillier wrote. There are currently more than 100,000 vacancies (1 in 11 posts) across the NHS, she noted.

“The UK’s exit from the EU has also created uncertainty over staffing: there is the risk that existing workforce shortages maybe exacerbated.” House of Commons library statistics show 63,000 NHS staff in England are EU nationals – 5.6% of all staff.

Meg Hillier’s annual report at-a-glance:

  • Department for Education

Top of the concerns, particularly financial strain on schools and children’s social care, which is “increasingly becoming financially unsustainable”.

  • Department of Health and Social Care

Worries over financial sustainability and how this is effecting patient care, staffing shortages – which Brexit could make worse – and overstretched mental health services, particularly for children and young people.

  • Ministry of Defence

The MoD has long-term, expensive and “uniquely unpredictable” costs while facing an estimated £14.6bn funding black hole. Hillier calls the state of MoD housing stock an “embarrassment”.

  • Ministry of Justice

The MoJ has “kept up its track record of over-ambitious timetabling and poor project management,” Hillier writes. She criticises the timetable for the £1.2bn modernisation of the HM Courts & Tribunals Service and doubts the claim the HMCTS now saves £265m a year.

  • HMRC

Called a “department under pressure”. Error and fraud in the tax credits system is highlighted as a particular issue, with an estimated £1.3bn lost in overpayments in 2016-17. Too many overseas traders using online market places, such as Amazon and eBay, “are not charging VAT as they should”.

  • The Department for Environment, Food and Rural Affairs

The department most likely to be affected by Brexit has been “over-optimistic” in its preparations for no-deal. While it is confident there would be no food shortages “the department admitted vulnerable groups could be affected if food prices rose”, writes Hillier.

  • Home Office

Named as a “creaking system”, particularly in its gathering of data. The Windrush scandal “laid bare” the systematic problems with the Home Office.  

  • Brexit

Criticism over the government’s lack of transparency on plans, preparations of costs to Parliament, business and the public. Concern has arisen over the cost of consultants used for Brexit, for which the normal transparent process “have been ignored or diminished”.

  • Outsourcing

Outsourcing of public services deliver costs £254m of government spending but “there are still too many ill-thought through outsourcing contracts”.

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