The Budget and Finance Scrutiny Committee of Lancashire County Council met on Monday 24 November 2025 to review the council's financial performance for the second quarter of 2025/26 and to discuss the preliminary assessment for the 2026/27 budget. The committee also considered the findings of the council's Efficiency Review and discussed its work programme.

2025/26 Quarter 2 Financial Monitoring Report

The committee reviewed the 2025/26 Quarter 2 Financial Monitoring Report, which indicated a reduction in the forecast overspend from £28 million in Quarter 1 to £10.354 million in Quarter 2. The delivery of the approved capital programme was also re-phased, with the total value reduced from £300 million to £247 million. Councillors highlighted the need for more detailed information regarding capital programme slippage and requested that jargon be reduced in future reports. It was confirmed that Lancashire could benefit by approximately £14 million from the Fair Funding Review, contingent on the outcome of the Local Government Financial Settlement. Assurances were given that the underspend in the public health budget would not be diverted to other services. Significant work on home to school transport, including potential expansion of the minibus fleet and review of contracts, was noted. Written responses were requested on specific variations in business growth and corporate budgets, withdrawn capital schemes, and details on Schools Basic Need, Corporate Property, Digital Services underspend, Funding and Grants, Public Rights of Way Spend, Lancashire Breaktime Service, and Highways and Transport spending reductions.

2026/27 Budget - Preliminary Assessment

The committee discussed the preliminary assessment for the 2026/27 budget, noting that the Local Government Financial Settlement was expected in mid-December, followed by intensive work to draft the budget and identify savings options. The draft budget would be considered by the committee on 21 January 2026, before going to Cabinet on 5 February and Full Council on 26 February for approval. A consultation process would also take place. An approximate shortfall of £9 million was anticipated for the 2026/27 budget, which included a previously agreed savings package of £43 million. The delivery of savings would be monitored, and a review of surplus assets would be conducted. The committee was informed that a potential reduction in employer contributions to the Lancashire County Pension Fund could positively impact the budget. The implications of not increasing council tax by the maximum 4.99% were discussed, with indications that the government might view such councils less favourably when seeking future support. It was confirmed that savings identified in the efficiency review aligned with those in the preliminary budget assessment. The committee was also informed that the Adult Services re-design did not include proposals related to the consultation on Older People's Residential Care Homes and Day Centres. A written update would be provided regarding conditions placed on the sale of county council land and property. The meeting scheduled for 21 January 2026 was agreed to be a full-day meeting, with Cabinet members invited to present overviews of budget proposals and savings.

Lancashire County Council's Efficiency Review

The committee reviewed the findings of Lancashire County Council's Efficiency Review. Phase 1 indicated potential savings of £21.9 million over three years, with £6.7 million achievable in 2026/27, focusing on areas such as property, procurement, digital, organisational structures, and income generation. Phase 2 of the review would commence shortly. The committee questioned the potential need for external consultancy, the use of jargon, and the distinction between efficiency savings and service reductions, particularly concerning a £5 million efficiency saving in Highways. It was confirmed that internal resources would be maximised, but external specialist support might be required. An explanation of the corporate landlord model was provided, highlighting increased control over the corporate property estate. The Cabinet Working Group overseeing the review was confirmed to include the Leader, Deputy Leader, County Councillor Dwyer, County Councillor Mirfin, and relevant Executive Directors and Directors. The committee noted the Efficiency Review report.

Budget and Finance Scrutiny Committee Work Programme 2025/26 (and draft 2026/27)

The committee considered its work programme for 2025/26 and a draft for 2026/27. Phase 2 of the Efficiency Review was added to the work programme for the 29 June 2026 meeting. A separate meeting in late January 2026 was agreed to consider the 2025/26 Quarter 3 Financial Monitoring Report, as the January meeting would be dedicated to the 2026/27 budget and savings proposals.

Calendar of Meetings

The proposed calendar of meetings for the committee was noted, with an additional meeting in late January 2026 to discuss the 2025/26 Quarter 3 Financial Monitoring Report. The next meeting was scheduled for Wednesday, 21 January 2026.