The Budget and Finance Scrutiny Committee met to discuss the financial outlook for Lancashire County Council, focusing on the 2025/26 financial year, the preliminary budget assessment for 2026/27, and an efficiency review. The committee requested more detailed information in future reports, particularly regarding capital programme changes, and approved a full-day meeting in January to discuss budget proposals.

2026/27 Budget and Financial Planning

The committee reviewed the preliminary budget assessment for 2026/27, during which it was noted that the Local Government Financial Settlement was expected in mid-December. A shortfall of approximately £9 million was anticipated for the 2026/27 budget, which included a previously agreed savings package of £43 million. The committee heard that a budget tracker would monitor savings delivery, and a review of surplus assets would determine if disposals were appropriate to support budget proposals.

The committee discussed council tax levels, with Councillor County Ged Mirfin, Cabinet Member for Resources, HR and Property, confirming that 1% of council tax equated to approximately £6.8 million. It was noted that the government was likely to look unfavourably on councils setting a council tax precept below the 4.99% cap when considering future support.

The committee was assured that the Adult Services re-design did not include any proposals arising from the ongoing consultation on the Older People's Residential Care Homes and Day Centres.

The committee requested a written update on conditions placed on the sale of council land and buildings, which sometimes made future use difficult.

The committee agreed that the meeting scheduled for 21 January 2026 would be a full-day session, with all cabinet members invited to present overviews of budget proposals and proposed savings within their portfolios.

2025/26 Financial Monitoring Report

The committee examined the 2025/26 Quarter 2 Financial Monitoring Report, noting 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 had been re-phased from £300 million to £247 million during the same period.

The committee requested more detail in future reports, particularly regarding capital programme slippage and the impact on individual projects, and asked that jargon be avoided.

It was confirmed that Lancashire could benefit by approximately £14 million from the Fair Funding Review¹, dependent on the outcome of the Local Government Financial Settlement.

The committee received assurances that the underspend in the public health budget was subject to certain conditions and would not be diverted to other services or to support overspends.

It was noted that significant work had been undertaken on home to school transport, potentially expanding the council's fleet of minibuses, reviewing contracts for private providers, and improving ICT and journey modelling.

Councillor County Ged Mirfin advised that future reports on the capital programme would be more detailed regarding the reasons for re-phasing.

The committee requested written responses with further detail on the following items:

• The significant variations on business growth and corporate budgets (Pensions and Apprenticeship Levy).
• Any capital schemes which have been withdrawn.
• Schools Basic Need
• Corporate Property
• Digital Services underspend
• Funding and Grants
• Public Rights of Way Spend
• Lancashire Breaktime Service
• Highways and Transport reduction in spending of £721,000

Efficiency Review

The committee reviewed the Lancashire County Council's Efficiency Review, with Phase 1 findings indicating potential savings of £21.9 million over three years, including £6.7 million in 2026/27. Areas of focus had been property, procurement, digital, organisational structures, and income generation opportunities. Phase 2 would commence imminently and report next year.

The committee questioned the need for external consultancy support, the use of jargon in the report, and the differentiation between efficiency and potential service reductions, such as the £5 million of efficiency savings mentioned in the Highways Service.

It was confirmed that as much work as possible would be undertaken internally, but specialist external support might be necessary in some areas. An explanation of the corporate landlord model was given, relating to a higher degree of control over the corporate property estate managed as a corporate asset rather than on a service-by-service basis.

It was confirmed that the Cabinet Working Group which had overseen the review consisted of the Leader and Deputy Leader, together with Councillor County David Dwyer, Cabinet Member for Data, Technology, Customer and Efficiency, and Councillor County Ged Mirfin, supported by Executive Directors and Directors.

Work Programme

The committee agreed to add Phase 2 of the Lancashire County Council's Efficiency Review to the work programme for the 29 June 2026 meeting.

A query was raised about when the committee would have the opportunity to consider the 2025/26 Quarter 3 Financial Monitoring Report.

The Interim Director of Finance (s151 Officer) suggested that the meeting scheduled for 21 January 2026 should be solely dedicated to considering the county council's budget and savings proposals for 2026/27 and that a separate meeting, shortly afterwards, be arranged to consider the 2025/26 Quarter 3 Financial Monitoring Report.