The Budget and Finance Scrutiny Committee of Lancashire County Council met on Wednesday, 21 January 2026, to discuss the draft budget for 2026/27. The committee reviewed proposals across all directorates, including significant investments in adult social care, education, and highways, alongside plans for efficiency savings. Key decisions included urging Cabinet to consider not-for-profit models for care homes and day centres, establishing a cross-party working group on their modernisation, and asking Cabinet to consider an indicative capital sum for this purpose. The committee also recommended that Cabinet give consideration to mental health outcomes for adults and children, the utilisation of the Public Health Grant for these services, and the funding required to implement the improvement plan for Adult Social Care following a Care Quality Commission inspection report. Additionally, the committee resolved that the Leader should write to the relevant Secretary of State to seek assurance that setting a council tax precept below the maximum available would not lead to future funding penalties.

Adults, Health and Wellbeing Services

The committee discussed the budget proposals for Adults, Health and Wellbeing Services, which are shaped by a commitment to supporting residents to live better and more independent lives. The proposals aim to strengthen the focus on prevention and early support, with a significant portion of the directorate's budget allocated to adult social care. Key areas of discussion included the Disabled Facilities Grant, the Better Care Fund, and the need for improved partnership working with district councils. Concerns were raised about the impact of service changes on vulnerable groups, but there was significant support for the focus on prevention and early intervention. The budget includes investment in the workforce and aims to modernise the care market.

The committee also heard about the public health grant, which has seen an increase, and how it will be reinvested in preventative services. Discussions touched upon the challenges of rising demand, complexity of need, and market fragility within adult social care. The transition to digital services for telecare systems was highlighted as a crucial investment.

Education and Children's Services

The Education and Children's Services directorate presented a budget focused on protecting vulnerable children, investing in areas of growing demand, and strengthening prevention. Key proposals include expanding in-house provision for children in care, investing significantly in Special Educational Needs and Disabilities (SEND) provision, and redesigning early help services around family hubs. The budget allocates £7 million for SEND resources and capital investment for expanding high needs provision. The Families First programme and Best Start Family Hubs are central to the strategy for strengthening early help and safeguarding. Consultation feedback highlighted concerns about SEND efficiency, the importance of local facilities, and the need to expand in-house care.

Place Directorate

The Place Directorate's budget proposals focus on protecting statutory duties and safety-critical work while modernising operations. Savings are centred on improving back-office functions, risk-based maintenance, and utilising digital tools. The proposals aim to enhance service quality and efficiency, implement a fair parking charging system, and reinvest funding in public transport and highways maintenance. Economic development is highlighted as fundamental to Lancashire's future, with investments in infrastructure, skills, and business support. Waste management strategies include investing in anaerobic digestion facilities to process food waste and generate energy, potentially saving £5 million annually. Trading Standards is also being reviewed to generate income while maintaining its vital protective role.

Resources Directorate

The Resources Directorate's budget proposals focus on efficiency and transformation, with savings identified across service design, income generation, and technology. A significant portion of the savings comes from service redesign, which will impact staffing budgets, with an estimated 100 full-time equivalent reductions over three years, managed through existing vacancies. Income generation is projected to increase through the Lancashire Teaching Agency and governance functions. Technology savings are anticipated through system simplification and a move to cloud-based support. The directorate also highlighted progress in adopting Artificial Intelligence (AI), with Microsoft noting Lancashire as a leading authority in its development and adoption.

Recommendations to Cabinet

Following extensive discussion and debate, the Budget and Finance Scrutiny Committee made several recommendations to Cabinet:

• Care Homes and Day Centres:
  • Cabinet be urged to consider different, not-for-profit models for upgrading care homes and day centres, focusing on value for money.
  • Cabinet be asked to establish a cross-party working group on the modernisation of care homes and day centres, reporting to the relevant scrutiny committee.
  • Cabinet be asked to consider putting an indicative sum into the budget for the modernisation of care homes and day centres.
• Mental Health Outcomes/Adult Social Care Improvement Plan:
  • Cabinet be asked to consider concerns regarding mental health outcomes for adults and children, ensuring timely assessments and utilising the Public Health Grant and other funding sources to support these outcomes.
  • Cabinet be asked to consider the funding required to implement the improvement plan for Adult Social Care, following the Care Quality Commission inspection report.
• Future Funding and Council Tax Precept:
  • The Leader be asked to write to the relevant Secretary of State to receive assurance that the Council will not be looked on less favourably by the Government in future funding allocations by setting a council tax precept below the maximum available.

The committee also noted its work programme and agreed to add Phase 2 of the Efficiency Review to its future agenda. The next meeting is scheduled for 5 February 2026.