The Budget and Finance Scrutiny Committee reviewed the 2025/26 Quarter 3 Financial Monitoring Report, noting a forecast overspend of £6.117 million. The committee also discussed recommendations for the 2026/27 draft budget, including considerations for care homes, mental health services, and council tax precepts.

2025/26 Quarter 3 Financial Monitoring Report

The committee considered the 2025/26 Quarter 3 Financial Monitoring Report, which detailed a forecast revenue outturn overspend of £6.117 million, representing 0.49% of the approved budget. This overspend was primarily attributed to pressures within Adult Services and Education and Children's Services, particularly in areas such as placements for children with disabilities, SEND transport, and the commissioning of external Education Psychologists. Mitigation strategies were in place, and services were working to reduce these variances.

The report also highlighted the 2025/26 Capital Programme, which had a revised value of £299.106 million. The forecast outturn for capital expenditure was £203.257 million, resulting in a forecast underspend of £95.849 million. This underspend was attributed to factors such as reprofiling of projects, delays in planning approvals, and market capacity constraints.

A significant concern raised was the forecast overspend in the Dedicated Schools Grant (DSG) of £73.08 million, largely due to increasing demand and placement costs for pupils with Special Educational Needs & Disabilities (SEND). The report noted that the DSG funding allocation had not kept pace with this growing demand.

During the discussion, Councillor Azhar Ali OBE, Leader of the Opposition and Local Councillor for Nelson East, raised concerns about the use of the Public Health Grant, questioning whether it was being strategically used to fund eligible expenditure not originally budgeted for. Councillor Gina Dowding, Deputy Leader of the Opposition and Local Councillor for Lancaster Central, supported these concerns, advocating for a deeper dive into how the grant was being utilised.

The committee also discussed the potential impact of vacancies on service delivery and the ongoing SCSO dispute within the council, noting the reputational damage and impact on waiting times.

Recommendations for the 2026/27 Draft Budget

The committee discussed recommendations for the 2026/27 draft budget. Key recommendations included:

• Care Homes and Day Centres: Cabinet was urged to consider different, not-for-profit models for upgrading care homes and day centres in Lancashire, with a focus on value for money. A cross-party working group was also proposed to examine the modernisation of these facilities, and an indicative sum for modernisation was recommended for inclusion in the budget.
• Mental Health Outcomes and Adult Social Care Improvement Plan: Cabinet was asked to consider concerns related to mental health outcomes for both adults and children, and to assess whether the council was adequately resourcing these services to ensure timely assessments. It was also recommended that the Public Health Grant be utilised first, along with other funding sources, to support identified mental health issues. Furthermore, Cabinet was asked to consider the funding required to implement the improvement plan for Adult Social Care, following a Care Quality Commission inspection report.
• Future Funding and Council Tax Precept: The Leader was asked to write to the relevant Secretary of State to seek assurance that the council would not be viewed less favourably by the government in future funding allocations by setting a council tax precept below the maximum available.

Budget and Finance Scrutiny Committee Work Programme

The committee also considered its work programme. It was agreed that future meetings would include a summary of changes to the Medium-Term Financial Strategy resulting from the budget and a report on the progress of in-year savings. The committee also discussed the need for clearer guidelines on how different scrutiny committees should interact, particularly in relation to financial matters and policy scrutiny.

The meeting concluded with thanks to Mr Arnold for his time and contributions. The date of the next meeting was set for Monday, 29 June 2026.