Purpose

This report provides an update to Cabinet on
the Council's 2025/26 revenue and capital financial position, as at
the end of Quarter 2. Securing sound and robust finances is the
number one priority for the Administration as financial security
enables the delivery of the Council's ambition for providing
efficient and effective county services to the residents of
Lancashire.
 
The forecast position at the year-end at
Quarter 2 is based on several assumptions relating to current
expenditure, expected demand, cost pressures and service knowledge
and a risk assessment of savings delivery trends and service
knowledge.
 
Lancashire County Council is not unique in
facing spending pressures and challenges in delivering council
services and demands upon services. Lobbying by the local
government sector of government for increased resources continues
in advance of the outcome of the Fair Funding Review 2.0 due in the
Autumn. Nonetheless, constraining expenditure streams within agreed
budget totals is central to the Council’s mission to attain
financial control in its operations generally.
 
The forecast revenue outturn position for
2025/26 at the end of Quarter 2 is an overspend of £10.354m,
which represents 0.83% of the approved budget. Services have
prepared and continue to develop mitigation strategies with the aim
of eliminating or reducing to the maximum extent possible all of
these adverse variances.  The Quarter 3
position will set out the results of these endeavours and in the
meantime the position will be closely monitored. 
 
The 2025/26 Capital Programme agreed by Full
Council in February 2025 of £299.635m was the highest value
programme agreed in recent years (in financial year 2024/25 Capital
Programme delivery of £199.152m was achieved). 
 
The Programme has been revised to take account
of the roll forward from the last financial year, additional grants
received and a review of the profiling of likely spend at the
year-end for those projects that will be delivered over a longer
period than expected in February, which is established practice for
a programme of this size and complexity. The value of the Revised
Programme has therefore been adjusted in the sum of
£297.912m. Approval of this Revised Programme is detailed in
the recommendations of the report and details by service blocks are
shown in Appendix 'B'.
 
The forecast outturn against the Revised
Capital Programme in the current year is £247.448m resulting
in a forecast underspend of £50.464m (16.94%). This forecast
delivery of £247.448m represents 124% of the delivery
achieved in 2024/25.  As is usual with
the delivery of large and complex programming it is not unlikely
that this underspend will increase as the financial year
progresses. 

Content

The Cabinet approved the recommendation(s) as
set out in the report.