In recent weeks we have seen two large charitable organisations fold through economic problems, Kids Company and the British Association for Adoption and Fostering.
Kent County Council relies on many local and national Charitable and Voluntary organisations for the delivery of a wide range of crucial services. Is the Leader satisfied that adequate checks are regularly made on the financial soundness and governance structures of these organisations, as I am concerned that KCC's commissioning arrangements could jeopardise the financial stability of these organisations.
Sustainability is a key issue for the social care market in particular; with unprecedented pressures on resources and a growing demand it is vital that we ensure we meet our Care Act obligations, pay the right price for the care provided and work to cultivate a streamline mixed economy of provision, which meets the current and future needs of Kent residents. Economic problems can be caused by a number of issues, such as over reliance on government funding paid at unsustainable prices, financial mismanagement and poor business models.
Conscious of the need for sustainability, the social care team has undertaken work in conjunction with our efficiency partner Newton Europe to review the Adult Disability Residential Sector - both in terms of the oversupply of provision and our approach to price increases. Historically a blanket approach has been undertaken, however for the last 2 years we have adopted a tailored evidence-based approach which has enabled us to allocate funds to where the market needed the most help. This was achieved through the development of a cost model to consider the benchmark costs of services and a detailed analysis of financial returns, including management and statutory account reviews.
Moving forward, it is key that this approach be adopted across all service areas, with commercial contract management becoming a key driver to enable this level of scrutiny and sustainability assessment. This will require a more joined-up approach with commissioners and corporate services to ensure the right skills are available in the right place to achieve this goal.
Financial mismanagement of services to Kent County Council is a more worrying and often complex area, however again this can be overcome through ensuring a more robust approach to grant allocations and contract letting, as well as supporting our contract managers by giving them the skills and resources to conduct commercial assessments of the services that are delivering on our behalf. Indeed to this end our Internal Audit team is undertaking a 'grant' audit this year.