The Budget and Finance Scrutiny Committee met to discuss the council's financial position and budget setting process for the upcoming years. Key discussions included the framework for the 2027-28 budget, the 2025-26 financial outturn report, and the council's priorities for Building a Better Lancashire. The committee also reviewed its work programme for the next municipal year.

Budget Process and Timetable 2027-28

The committee received an overview of the framework for setting the 2027-28 budget, which will be the final budget set by the current authority before local government reorganisation. Gary Fielding, the new Section 151 Officer, presented a single-slide overview of the budget timeline, highlighting key pressures such as increased demand in adult and children's social care, inflationary pressures linked to global events, and the potential for savings not being fully delivered. The council is also reappraising its council tax assumptions, with a 1% increase equating to approximately £7.2 million.

Councillor Dwyer, Cabinet Member for Resources, Property and Efficiency, emphasised the challenging period ahead due to local government reorganisation. He noted that the budget is being developed against a backdrop of sustained demand and cost pressures in social care, alongside ongoing inflationary pressures.

Members raised concerns about the evidence for managing spending pressures within the year, particularly in SEND, home-to-school transport, and adult social care. Mr Fielding acknowledged that the first quarter was likely to see an overspend but expressed confidence in the organisation's resilience to manage these pressures. He also highlighted the potential for technology, such as AI, to help social workers manage caseloads more efficiently.

Discussions also touched upon the impact of inflation and interest rates, the validation of savings plans, and the review of reserves. Councillor Murphy provided a broader perspective on the global economic context, including the volatility caused by the conflict in the Gulf region, and the need for fundamental restructuring in adult social care. Councillor Jewell sought clarification on the timeframe for local government reorganisation principles, capital programme commitments in light of reorganisation, and the flow of savings from reorganisation. Councillor Ali raised questions about the capital programme, potential financial risks, investment in children's homes, and the need for lobbying MPs on SEND issues.

The County Council's Financial Position 2025-26 Outturn

The committee reviewed the 2025-26 outturn report, which showed a projected overspend of £2.992 million, a significant improvement from earlier forecasts. Councillor Dwyer highlighted this as evidence of the administration's commitment to financial discipline.

However, members raised concerns about significant delays in the capital programme, particularly in economic development and growth initiatives. Councillor Riggott questioned the underspend in contingency budgets and the impact of rephasing mobility crossings and streetlights works on residents. Councillor Tetlow questioned whether the £112.8 million underspend in the capital programme indicated a delivery issue, particularly concerning the East Lancashire Levelling Up Fund where only £5 million of £41.1 million was spent.

Officers explained that delays were often due to late funding allocations, planning issues, market capacity, and procurement challenges. A paper on the supplier charter was due to be presented to Cabinet, aiming to improve the council's relationship with the market.

Councillor Jewell raised concerns about the £79 million overspend on the Dedicated Schools Grant (DSG), leading to a cumulative deficit of £102 million. He also questioned the reliance on NHS income for ongoing costs. Officers confirmed that a recovery plan for the DSG had been submitted to the government, which could cover 90% of the deficit if approved.

Councillor Ali raised questions about the 400 potential job losses mentioned in the previous budget, the £23 million capital funding for SEND, and the performance of highways contractors. He also queried the underspend on stairlifts, noting it was typically a district council responsibility.

Councillor Dwyer addressed several points, including the £23 million SEND capital funding, which would be brought back as part of the capital review. He also noted that the council was strengthening its procurement processes.

Councillor Riggott sought clarification on the reliance on NHS income and historical billing issues. Councillor Tetlow questioned the £71 million spend on home-to-school transport despite the purchase of minibuses. Officers explained that increased demand for SEND transport, often to distant placements, contributed to the overspend. Councillor Murphynn sought information on improvements to forecasting and modelling, particularly for adult social care and home-to-school transport.

Building a Better Lancashire: Moving the Dial on Our Priorities in 2026-27

The committee received a presentation on the Moving the Dial report, which outlines the council's priorities for the upcoming year. Vicky, presenting the report, highlighted six key areas of focus: SEND improvement, Adult Health and Wellbeing, transforming highways, civic pride, financial sustainability and service transformation, and local government reorganisation.

Councillor Clifford raised concerns about the budget for Civic Pride, noting that it was presented as cost-neutral but would require significant funding for initiatives like county-wide clean-up days. Councillor Dwyer responded that policy implications would be considered throughout the year and that a £4 million strategic reserve could be accessed.

Councillor Riggott suggested that the committee should focus on savings delivery and financial management within its remit, leaving policy matters to other committees. Councillor Tetlow inquired about actions being taken regarding vape and barber shops, and noted potential private sector involvement in civic pride initiatives. Councillor Jewell identified several areas for scrutiny, including highways performance, value for money in road maintenance, procurement, and the impact of decisions on the budget, such as the decision not to build a new secondary school in Preston.

Councillor Ali echoed the need for data on contractor performance and suggested that the Cabinet Member for Civic Pride should attend a future meeting to outline resource allocation. He also requested an action plan for investment in adult social care assets. Councillor Murphynn highlighted the importance of data for demonstrating pothole repairs to residents and suggested increasing councillor allowance grants to support community projects. Councillor Dwyer confirmed that increasing the grant was under consideration. Councillor Ali also proposed that the entire county of Lancashire be parished to address a democratic deficit and enable local councils to raise funds for community projects.

Budget and Finance Scrutiny Committee Work Programme 2026-27

The committee reviewed its draft work programme for the upcoming year. Councillor Ali proposed that the procurement and adult social care investment plan items be prioritised for the September meeting. Councillor Riggott suggested separating the final meeting into two distinct sessions, one on the budget and another on the Q3 output report, and adjusting the timings to allow for adequate discussion. The committee agreed to work on refining the programme and circulating it via email before the next meeting.

The next meeting of the committee was scheduled for Wednesday, 2 September 2026.