Agenda item

Outcome of Reviews of Achieving for Children and Optalis Delivery Arrangements

Minutes:

Cabinet considered the report regarding the CIPFA reviews of Optalis and Achieving for Children (AFC).

 

The Deputy Chairman of Cabinet, Adult Social Care, Children’s Services, Health and Mental Health informed that as part of the budget setting process for 2020-2021, it was recommended that the arrangements that the Royal Borough had through AFC

and Optalis for the delivery of children’s and adult services respectively should be reviewed to ensure that they were fit for purpose.

 

The Chartered Institute of Public Finance and Accountancy (CIPFA) was

commissioned in April 2020 to undertake the review. The aim of the review

was to understand whether the current arrangements, which have been in place

since 2017, were still the appropriate models to deliver the Council’s ongoing

strategic transformation objectives for adult and children’s services.

 

With regards to Optalis  the CIPFA report noted that Optalis had brought considerable benefits to the Royal Borough in terms of service improvement, which justifies the original decision to transfer services into the company. However, the Royal Borough as the minority shareholder (45%) did not have sufficient control over major service transformation for Optalis. There was tension between the Council and Wokingham that was impacting organisation development.

 

With regards to AFC children’s services have improved considerably, now rated as good by Ofsted. This is an enormous achievement in a relatively short time and reflects extremely well on AFC and its staff. There had been few financial savings and costs had risen, in part, are reflected nationally. Plans to expand the company are on hold, which leaves little scope for further costs savings. 

 

The Lead Member for Finance and Ascot informed that this was a very timely report detailing reasons why we should remain with these companies and some sensible thoughts on how best to achieve our objectives. In both cases the boards need to come together to revise and agree clear longer-term objectives to allow AfC and Optalis to develop their own business plans and financial strategies. 

 

When we joined AfC cost savings were not the driving force but service improvement was and there has been real success with our Children’s services now rated as good. He had no visibility as to the objectives of Richmond and Kingston but evidence suggests that the cost of provision of children’s services was increasing and inevitably both Council’s would be looking to deliver their excellent services at lower cost. This should assist RBWM to create a greater focus on driving costs down.

 

The report recommended a service level agreement to ensure the delivery of our priorities. In the CIPFA report there were 9 separate recommendations all very sensible. In relation to finance I hold the view that AfC’ s business plan 2020/2024, which is devoid of financial information, is not adopted until cost and service pressures are clarified in a medium-term financial strategy. 

 

He felt that relationships between Wokingham and RBWM must improve and was sure that the Leader and the Managing Director were committed to achieving this. It was anomalous that Optalis manages £36M of RBWMs social care and £10M of Wokingham’s but we were a minority shareholder with 45% of the shares.  It was recommendation that the shareholder agreement should be changed so that the respective councils have greater control of the service areas that apply specifically to them.

He informed Cabinet that this was essential if the arrangement is going to work for us, as last year it was input from RBWM that prompted changes in operations at Optalis and helped to recover an adverse financial variance.  Cipfa’s 4th recommendation that RBWM should challenge Optalis to demonstrate that it provides added value over and above delivering the day to day service is not necessary as the Council and its transformation team are already working in partnership with Optalis to develop this capability.

 

The Lead Member for Planning and Maidenhead informed that he had been Lead Member responsible for moving services to Optalis and was a member of the Holdings Board.  He was delighted to see an excellent offer for residents that was above the services provided by most council’s. There was no concern about the service provision just the finances.

 

Cllr Knowles informed that there was no doubt that joining the organisations was the right thing to do at the time and no other model would have provided the improvements seen.  He was however concerned about the nature of the contracts.  Optalis’ risk register had the relationship with Wokingham going from high to medium.  CIPFA had raised this relationship as an issue so it should remain high on the risk register.  The contract was three years in and Wokingham had not met its obligations so there could be a breach of contract, break clauses and a plan B should be considered. With regards to AFC he was concerned that the agreement that the share of ownership had not been fulfilled leaving RBWM still with 20%, CIPFA felt this should be reviewed.

 

(Cllr Johnson lost connectivity and left the meeting, Cllr Carroll took the Chair).

 

Cllr Bond mentioned that the report said that costs were under review but with no timescale and that he had first heard about the concern with the relationship with Wokingham a year ago.  The report into AFC mentioned had a line about an issue regarding the pension transfer and this was still ongoing.  With regards to Optalis he questioned why Wokingham saw the service differently to RBWM. 

 

The Lead Member for Planning and Maidenhead reported that there was a difference in how both authorities viewed shared services, however this disagreement was not impacting services.

 

With regards to AFC and pension the Director reported that this formed part of the transfer of staff to AFC and the sharing of pension risks.  AFC were working on their MTFS and pensions would be included.

 

Cllr Sharpe reported that these types of issues often arose in these types of relationships.  Partners need to work together as they both had a share in Optalis.

 

Resolved unanimously: That Cabinet notes the report and:

 

a) Delegates authority to the Managing Director, in consultation with

the Lead Member for Finance and Deputy Chairman of Cabinet,

Adult Social Care, Children’s Services, Health and Mental Health,

to implement the recommendations set out in the two respective

CIPFA reports annexed to this report.

Supporting documents: