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 3.
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 3 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 continued ahead of the outcome
of the Fair Funding Review 2.0 which was published following the
publication of the Local Government Provisional Finance Settlement
in December 2025.  The resulting outcome
of this is reflected elsewhere on this agenda to
Cabinet.  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
3 is an overspend of £6.117m, which represents 0.49% 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 these
adverse variances.  The end of the
financial year 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 to the sum of £299.106m. 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 £203.257m resulting in a forecast underspend
of £95.849m (32.05%). This forecast delivery of
£203.257m represents 103% 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.
 
The
forecast Dedicated Schools Grant (DSG) revenue outturn position at
the end of Quarter 3 is an overspend of £73.08m forecast due
to the growing demand and placement costs for pupils with Special
Educational Needs & Disabilities (SEND). Consistent with many
councils nationally, the DSG funding allocation for many years has
not increased in line with the growing demand. The Council
continues to face major challenges with the increasing numbers of
pupils with SEND, bringing significant financial and service
pressures in this context. The position is being closely monitored,
with mitigation strategies developed with the aim of reducing the
variances. The draft Budget for 2026/27 contains sufficient
resources to sustain delivery of the SEND service and to finance
the associated DSG Deficit.

Content

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