The Overview and Scrutiny Committee of Hertfordshire Council convened for evidence-gathering sessions on Wednesday, 4 February 2026, to scrutinise the council's budget for 2026/27 and its Medium Term Financial Strategy. The committee focused on the Adult Care Services, Public Health and Community Safety, and Resources and Performance portfolios, as well as a strategic overview of the overall budget. Key discussions revolved around the sustainability of the capital programme amidst construction cost inflation, the impact of local government reorganisation (LGR) on finances and services, and strategies for workforce retention and development.

Adult Care Services

The committee discussed the Connect and Prevent programme, a transformation initiative aimed at improving outcomes for individuals by enhancing their resilience and independence, thereby delaying or reducing the need for long-term care. Phase one of the programme, which began in 2023, has shown success in progressive reviews for people with learning disabilities and effective enablement services, leading to savings exceeding initial projections. Phase two of the programme, building on this success, will expand into new areas with four workstreams: proactive prevention (including support for unpaid carers and fall prevention), enabling independence, strategic commissioning, and sustainable accommodation. Significant capital investment is planned for accommodation, including new nursing homes and supported living facilities, with a £123 million capital programme over four years.

Workforce pressures were a significant concern, with discussions on care worker wages and strategies for recruitment and retention. While the council plans to increase care worker wages in line with the national living wage, the real living wage is rising more quickly. The council is investing in skills development, career progression, and support for unpaid carers, recognising their vital role in service delivery.

The review and rationalisation of day services were also discussed, with a projected saving of over £1 million. This review will be carried out within the parameters of the new day service strategy, focusing on property portfolio, transport, and workforce to ensure cost-effectiveness and the provision of appropriate care. The strategy aims to develop new options for people, including support for those discharged from hospital, people with dementia, and those with complex needs. Capital investment is planned for new day service schemes, with a total of approximately £15 million over the life of the capital programme.

Public Health and Community Safety

The committee examined the £2.9 million three-year prevention and health and inequalities fund, with assurances that strict monitoring and control measures are in place, including monthly mobilisation meetings and quarterly performance reviews with grant recipients. Grant agreements include specific clauses for underperformance and the potential clawback of funding.

Discussions also covered the withdrawal of legacy funding for housing-related support to district and borough councils. While this may appear to be a reduction, officers explained that the funding was not being used effectively for public health prevention needs and that district councils have received an uplift in homelessness grant funding and have benefited from the fairer funding review. The Make Every Adult Matter (MEAM) framework and other strategic partnership initiatives are in place to support individuals at risk of homelessness.

The public health grant increase of only 1.7% was noted as a concern, particularly in light of inflation. The team is prioritising core mandated services such as health checks and health visiting, while reviewing partnerships and service plans to ensure efficient use of resources. The use of reserves for one-off activities and pilot projects was discussed, with a policy to maintain reserves at 5-6% of the grant, primarily for emergency situations like pandemics.

Capital programmes for fire services were also a focus, including the Longfield project for a training centre of excellence and the improvement of fire stations. The Longfield project aims to generate income through driver training and apprenticeships, leveraging the service's established reputation. While inflationary pressures have impacted costs, the project is expected to be delivered within the £16.9 million budget, with phase three (renovation of the main building) potentially being incorporated into routine maintenance. The fire station refurbishment programme is being phased, with secured funding for three stations in the next two years, and further bids will be made for subsequent phases.

Local government reorganisation (LGR) and its impact on public health and community safety were discussed. The fire service will remain a Hertfordshire service, with governance changing depending on the LGR model. Public health and trading standards services, which are difficult to disaggregate, will require strategic working and potential shared services. The council is awaiting the Secretary of State's decision on the number of unitary authorities for Hertfordshire, after which a more focused plan for the rapid change programme into 2028 will be developed.

Resources and Performance

The committee explored the additional costs to the capital programme due to construction cost inflation, with the Brookfield development cited as an example where additional funds were required to correct a cost differential. While the business case for Brookfield is expected to remain viable due to increased development value, the council is working to ensure all capital bids are updated with the latest prices to avoid future cost escalations.

Cybersecurity was a significant concern, with an additional £150,000 allocated to support extended cybersecurity measures. Officers reported repelling over 250,000 intrusion attempts in a single month, highlighting the ongoing threat. The council is investing in AI systems and upskilling its workforce in digital and AI development to complement existing roles and improve service delivery.

The future of libraries was discussed, with confirmation that all 46 libraries across Hertfordshire will remain open. However, there will be a reduction in Sunday opening hours impacting six libraries, and the performing arts library service will be reduced. Income generation targets for libraries have been reviewed, with a shift towards more localised, responsive approaches rather than blanket targets. The council is also exploring integration of services within libraries to share costs.

The reduction in the legal team's budget was discussed in the context of attracting and retaining competent lawyers. The council is moving towards a silver standard of service levels, requiring negotiation with services to determine where legal input is most valuable and upskilling managers to provide basic support. The impact of these changes on service levels for residents is acknowledged.

Strategic Overview of the Overall Budget

The committee reviewed the council's overall budget in the context of its corporate plan and the significant challenges posed by the fairer funding review, which has resulted in a £42 million annual reduction in government funding. The budget prioritises support for the most vulnerable, including significant investment in adult care services (£562 million) and children's services (£309 million). Capital investment is also being made in accommodation, SEND facilities, and highways.

Local government reorganisation (LGR) was a recurring theme, with a £10 million allocation for transformation investment in 2026-27, funded by capital receipts. While no projects have been delayed due to LGR to date, some are expected to be reprioritised in the coming months, particularly in IT and property, to focus on LGR-related changes. The council is committed to delivering a balanced budget state by the commencement of LGR, avoiding the inheritance of significant debts.

Savings programmes are essential for financial sustainability, with a target of £172 million in savings across the Medium Term Financial Strategy. Transformation programmes, such as Connect and Prevent, are crucial for delivering these efficiencies. The council is also exploring innovative approaches, including AI, to improve service delivery and efficiency.

Concerns were raised about the sustainability of the capital programme in light of construction cost inflation and the potential impact of LGR. The council is undertaking an urgent review of the capital programme's financing. The impact of staffing reductions on service levels and the need for robust staff retention and recruitment strategies, particularly in the context of LGR, were highlighted as critical issues.

The council's reserves are considered to be at a dangerously low level, with limited flexibility for unplanned use. There are no current plans to increase reserves, which would require additional savings. The council is aiming to maintain or minimise the use of its contingency fund.

The administration has committed to extending council tax relief for care leavers from age 21 to 25, recognising the lobbying efforts from the Labour Group. The budget also includes additional investment for highways and air quality, funded by better-than-expected council tax returns from district and borough councils.

The committee also discussed the high-needs block deficit, which is a significant long-term risk. While the government has indicated it will cover these costs from 2028, the council is modelling various scenarios in case this commitment is not fully met. The council's reserves are among the lowest nationally, and there is a concern about using them for day-to-day revenue spending. The administration aims to manage borrowing costs proactively through asset disposals and careful phasing of capital investment.

The council is committed to consulting with residents on budget changes, particularly those affecting travel budgets, day services, and libraries, and is prepared to adapt plans based on feedback. The importance of staff morale and retention, especially during LGR, was emphasized, with a focus on creating an attractive working environment and encouraging innovation to drive savings and efficiencies.

Recommendations arising from the discussions included:

• An urgent review of the capital programme's financing to ensure it is fully funded, considering the impact of LGR and construction cost inflation.
• Clarity from the administration on the new service levels for residents resulting from staffing reductions.
• A review into the sustainability of the high-needs block and its impact on the budget, with officers modelling various scenarios.
• Further scrutiny of the reserves management strategy, with a view to increasing reserve levels and establishing a resilient backstop.
• Ensuring the council's strategic asset management plan is robust, with a focus on utilising assets effectively and avoiding unnecessary disposals.
• A focus on staff retention and recruitment, particularly in light of LGR, and on fostering an attractive working environment that encourages innovation.
• Sharing the government's response regarding the public health grant with panel members and considering further representations.
• Seeking capital contributions from other agencies for the Longfield training facility.
• More careful monitoring of joint funding with partners to ensure effective use of funds.
• Ensuring that the council's capital programme is not used to fund day-to-day revenue spending.
• A clear plan for the long-term impact of day service building disposals on residents and staff.