Hackney social services department has been given until February to meet the remaining statutory directions set by the government for its children's services.
In September, the Social Services Inspectorate reported some improvements within children's services and significant progress by the registration and inspection unit (News, page 3, 28 September).
But this was not enough to remove it from the list of 12 departments under special measures. This week, health minister John Hutton revoked directions set last December but issued new ones requiring the remaining action to be taken by the end of February.
The Social Services Inspectorate reported the department had only partially met the statutory directions that covered child protection services and services for looked-after children.
Hutton said: "I am very pleased that services are improving in Hackney. That is a tribute to considerable efforts in the leadership, senior officers and frontline staff of the council. It is, however, clear that further improvements are needed and that is why I have issued these directions today."
Meanwhile, the council has drawn up a financial recovery plan to prevent it being up to £13 million in the red by the end of the financial year.
The package, the details of which may be agreed at a full council meeting next week, will reduce the budget deficit by an initial £4.5 million by March, lead to an £18 million reduction in the next financial year and bring in single status.
Social services director Mary Richardson said that her department needed to make savings of about £1 million from its budget of more than £70 million this year, with bigger savings in the next financial year.
"We are trying to make sure that we have as little impact on frontline service users as possible," she said.
Children's placements were named as one of the major budget failures, with an overspend of £1 million. But Richardson said the social services department would be least affected by job losses.
Last month, the council's borough treasurer George Jenkins invoked section 114 of the Local Government and Finance Act 1988 preventing the council from entering any new financial commitments.
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