The Corporate Overview and Scrutiny Committee of Staffordshire Council met on Tuesday 28 July 2026 to discuss the ongoing Local Government Reorganisation (LGR) process, review the council's financial outturn for the 2025/26 financial year, and examine the integrated performance report for the first quarter of 2026/27. The committee also reviewed treasury management activities, representation on outside bodies, and the council's work programme.

Local Government Reform

The committee received a comprehensive update on the Local Government Reorganisation (LGR) process, a government-mandated initiative to replace the current two-tier system in Staffordshire and Stoke-on-Trent with unitary authorities. Leader of the Council, Councillor Martin Murray, and Michelle McGinty, Assistant Director for Strategy and Transformation, along with Karen Tierney, Strategic Lead for LGR and Devolution, provided details on the journey to date, the proposals submitted, and the work underway to prepare for implementation.

The government has confirmed its decision for a north and south Staffordshire geography, a decision that differs from the county council's own proposal for an east-west split. Despite this, the council's focus is now on constructive collaboration to ensure the new agreements are delivered safely and effectively. Officers have established programme governance and a joint programme management office (PMO) to coordinate preparatory work. The next phase will involve agreeing joint working agreements, setting up voluntary joint committees, and establishing an implementation team.

Concerns were raised by Councillor Alex Farrell regarding the potential for a judicial review, but Councillor Murray explained that Staffordshire's proposed model aligns with government criteria, limiting grounds for legal challenge. The challenging timescales for implementation were acknowledged, with officers expressing confidence that they are in a good position to respond due to significant preparatory work already undertaken. Councillor Farrell also questioned the resource implications of LGR, with officers confirming that resourcing implications are being assessed and that reprioritisation of work will be necessary.

The discussion also touched upon the lack of engagement from local MPs on the LGR process and the importance of devolution for Staffordshire. Councillor Philip White, Leader of the Opposition, highlighted concerns about potential stagnation due to councils winding down projects and the need for clarity on devolution, particularly in light of potential mayoral authorities. Councillor Ian Cooper expressed concerns about the lack of democratic mandate for LGR and its potential impact on local services, citing the example of funding cuts to the Samaritans in Tamworth.

The committee was assured that day-to-day council services would not change immediately and that funding streams would remain in place during the transition period. The role of parish councils was also discussed, with clarification that they would not gain additional powers under LGR but would continue to serve as a local voice.

Final Financial Outturn 2025/26

Councillor Sean Bagguley, Cabinet Member for Finance and Resources, presented the final financial outturn report for the 2025/26 financial year. The council delivered a £753 million budget with a small surplus, despite rising costs for fuel, materials, and wages. The report detailed an underspend of £6.696 million on the revenue budget, with significant investments made in adult social care (£330 million), services for vulnerable children and families (£223 million), highways (£74 million), and schools (£29 million).

However, concerns were raised about the sustainability of some savings, with a portion of the underspend being attributed to one-off benefits and the use of reserves. Councillor Kinsley Farrell questioned how much of the underspend was genuine, sustainable saving and what plans were in place for areas like children and families that had relied on reserves. Officers clarified that while some savings were recurrent, the underspend in children's and families services was around £4.5 million and was a structural issue requiring ongoing attention.

Councillor Philip White echoed concerns about the financial position, noting that only a small element of the underspend was a bankable saving, with the majority attributed to lower energy costs and lower wage inflation. He highlighted the £4.5 million overspend in children's and families services as a long-term structural issue.

The report also detailed capital expenditure, with a total spend of £118.044 million against a budget of £131.041 million. Significant investments were made in schools, highways, and economic regeneration projects. Financial health indicators remained strong, with 97.9% of invoices paid within 30 days.

A key point of discussion was the creation of a new earmarked reserve to support future spend associated with Local Government Reorganisation (LGR), with £2.3 million allocated from staffing vacancies. Concerns were raised about the overall cost of LGR and the potential for other councils to engage in fire sales of assets before the reorganisation.

Integrated Performance Report – Quarter 1, 2026-27

The Leader of the Council and Councillor Sean Bagguley presented the Integrated Performance Report for the first quarter of 2026-27. The report indicated a positive start to the year, with 32 out of 39 delivery projects on track. Key highlights included progress in expanding inclusive education, delivering health checks, strengthening skills and business support, and improving digital transport connectivity.

However, the report also acknowledged ongoing challenges in children's social care and Special Educational Needs and Disabilities (SEND) services, where rising demand was placing pressure on capacity and finances. The revenue forecast for Q1 indicated an overspend of £19.8 million, almost entirely attributable to children and family services, particularly the increasing number and costs of residential placements for children in care. Mitigating actions are being implemented within children and families services.

Councillor Alex Farrell raised concerns about connectivity in rural areas of Staffordshire, noting zero phone signal in places like Cannock Chase and Mile Oak. Councillor Bagguley acknowledged this as a priority and outlined efforts to improve connectivity through fibre links and satellite solutions, while also noting the challenges of providing service in rural areas and the role of the private sector.

The report also highlighted strong performance in areas such as emergency highway defect repairs, health checks, and jobs and career services. However, challenges remain in the timeliness of safeguarding referrals and managing waste volumes. The Special Educational Needs and Disabilities (SEND) High Needs Block was noted as having a significant forecast overspend of £78 million for 2026/27.

The committee discussed the visual presentation of the performance report, with Councillor Philip White suggesting a move towards a dashboard system for greater clarity and ease of digestion. The report also detailed progress on strategic reviews, with positive outcomes noted for websites, legal services, and customer feedback. The social care management system was highlighted as being amber due to delays in data migration and testing, but assurances were given that it is on track for implementation.

Treasury Management Report for the year ended 31 March 2026

Councillor Sean Bagguley presented the Treasury Management Report for the year ended 31 March 2026. The report detailed the council's borrowing and investment activities, highlighting a prudent and low-risk approach focused on the security and liquidity of funds. During the period, the council repaid £30.5 million of external loans and avoided additional interest payments by using cash reserves. The council achieved an investment return of 4.29%, exceeding the agreed benchmark of 3.52%.

Councillor Philip White and Councillor Ian Cooper commended the finance team for their sensible and prudent approach to treasury management, particularly in protecting taxpayer money. The report detailed the council's loan maturity profile and its approved lending list, which includes a diversified range of counterparties such as local authorities, banks, building societies, and money market funds. The council's investment strategy remains low-risk, focusing on safeguarding assets and ensuring liquidity.

Review of Representation on Outside Bodies

Councillor Martin Murray, Leader of the Council, presented the review of representation on outside bodies. The review aimed to ensure that the council's representation on these bodies remained relevant, effective, and delivered value for money. Following engagement with elected members and outside organisations, it was proposed to remove 14 bodies from the list due to them no longer operating, not requiring representation, or having had no contact.

Councillor Andrew Clissett raised a query about the Sir Graham Balfour High School Joint Youth Sports Facilities Management Liaison Group, noting no contact despite his involvement with the school's partnership. Councillor Murray assured that all members would be contacted regarding any changes to their appointments. Councillor Alex Farrell and Councillor Craig Humphreyson also raised specific queries about bodies they were appointed to but had received no contact from, with officers agreeing to follow these up offline. The committee agreed to the recommendations for removal and continued representation.

Work Programme

The committee received an update on the work programme. The Enterprise Resource Planning (ERP) system implementation was added to the agenda for the 15 December meeting. The Medium-Term Financial Strategy (MTFS) working group membership was formally appointed, including Councillors Baker, Humphreyson, White, Machin, Griffiths, Orlandi-Fantini, Clissett, and Luca. A briefing paper on the risk register was agreed to be sent to the committee. Local Government Reorganisation (LGR) was confirmed to be returning to scrutiny, with future areas of focus including shadow elections, timelines, governance, and capacity. An Artificial Intelligence (AI) business case was added to the 8 September meeting agenda under digital innovations.

The meeting concluded with the exclusion of the public for the remaining items of business, which involved the likely disclosure of exempt information.