The Budget and Finance Scrutiny Committee met on Monday 29 June 2026 to discuss the framework for the County Council's budget setting programme for 2027-28 and the financial outturn report for 2025-26. Key decisions included noting the committee's constitution, membership, and terms of reference, and discussing the proposed approach to the upcoming budget setting process.

Framework for the County Council's Budget Setting Programme 2027-28

The committee received a presentation on the framework for the upcoming budget setting programme for 2027-28. Gary Fielding, the new Section 151 Officer, outlined the proposed timeline, which includes reporting on the first quarter position in September 2026, the second quarter in November 2026, and Cabinet considering the budget in January 2027, with final council consideration in February 2027.

Key pressures identified include:

• Demand and Growth: Significant pressures in both adults' and children's social care due to increasing complexity and demand, exacerbated by a hot market for services.
• Inflationary Pressures: Increased costs due to global events, including the conflict in Iraq, impacting fuel and other essential supplies.
• Savings Not Delivered: Acknowledgment that some savings may not be delivered due to external factors, such as NHS reconfiguration impacting capacity and decision-making.
• Policy Investment: The need to factor in potential investments in other areas or policy priorities.
• Council Tax: Reappraisal of the assumption for council tax increases, as current RPI and CPI are significantly below the 4.99% previously assumed.

Mitigation strategies and opportunities discussed include:

• Capital Programme Review: Examining spending areas within the capital programme to identify potential reductions or savings, particularly in light of Local Government Reorganisation (LGR).
• Efficiency Plan Phase 2: Further work to increase productivity and make genuine efficiencies without impacting frontline services.
• Investor Save Proposals: Exploring opportunities where investment can generate ongoing savings, such as a second anaerobic digester for the waste recovery plant.
• Service Savings Options: Working with service directors to identify savings opportunities in policy or practice.

The committee also discussed local priorities, including the push to deliver 100% of savings, the desire to reduce debt levels, and the need to invest in highways and civic pride. The impact of LGR on council capacity and regulatory environments was also noted.

Several councillors raised questions regarding the evidence for managing spending pressures within the year, the assumptions on interest rates and inflation, the validation of savings plans, and the review of reserves. The committee was assured that while pressures exist, the organisation has resilience, and innovative solutions like AI are being explored to manage caseloads more efficiently.

The County Council's Financial Position 2025-26 Outturn Report

The committee received the outturn report for the 2025-26 financial year. Councillor Dwyer highlighted that the administration had reduced the projected overspend to £2.9 million, with 98% of agreed savings targets delivered, representing a significant improvement.

Key points discussed included:

• Capital Programme Delays: Concerns were raised about significant delays in economic development, growth, and investment programmes within the capital programme, with specific mention of the East Lancashire Levelling Up Fund, where £36 million of a £41.1 million budget had not been spent. Officers attributed delays to planning issues, funding notification, and capacity constraints in the market.
• Contingency Budgets: The deliberate holding back of contingency and central budgets was explained as a measure to respond to in-year pressures and anticipated future financial challenges.
• Reprioritisation of Resources: Decisions to rephase mobility crossings and streetlights works were questioned due to their impact on residents, with assurances sought regarding public safety.
• Dedicated Schools Grant (DSG): An alarming overspend of £79 million for the year, with a cumulative deficit of £102 million, was noted. The government has committed to reducing this balance by 90% pending the approval of a recovery plan.
• Reliance on NHS Income: The budget's reliance on income from joint working with the NHS was highlighted as a potential vulnerability.
• Job Losses: Questions were raised about the location and consultation process for the 400 job losses mentioned in the previous year's budget.
• SEND Capital Funding: The £23 million of capital funding for SEND was noted, with a request for a breakdown of its use at a future meeting.
• Contractor Over-reliance: Concerns were expressed about the over-reliance on a small number of contractors, particularly in highways and adult social care, with a call for contract reviews to be brought to scrutiny.
• Stairlifts: Clarification was sought on the council's role in funding stairlifts, as this is typically a district council responsibility via the Disabled Facilities Grant.
• Public Health Underspend: An update was requested on discussions regarding joint working with blue light services to achieve efficiency savings.
• Forecasting and Modelling: Discussions focused on improving forecasting and modelling, particularly in adult social care and home-to-school transport, with improvements noted in SEND data and business intelligence.

The committee also discussed the Moving the Dial report, which outlines the council's core priorities for the next financial year. Key areas of focus include SEND services, adult health and wellbeing, highways, civic pride, financial sustainability, and local government reorganisation.

The committee's work programme for 2026/27 was also discussed, with suggestions for future scrutiny topics including procurement, adult social care investment plans, and the final budget meeting.

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