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 the council's financial position, proposed savings, and capital investment plans across various directorates. Key decisions included urging Cabinet to consider not-for-profit models for care home upgrades, establishing a cross-party working group on care home modernisation, and asking Cabinet to consider funding for mental health services and the implementation of the Care Quality Commission's improvement plan for adult social care. The committee also resolved to ask the Leader to seek written assurance from the government regarding future funding allocations in relation to council tax levels.

Draft Budget 2026/27

The committee received an extensive overview of the draft budget for 2026/27, presented by the Leader, County Councillor Stephen Atkinson, and Chief Executive, Mark Wynn. They highlighted the council's financial challenges, including national pressures on local government finance and increased demand on services, estimated at over £93 million. Despite these challenges, the council proposed the lowest council tax rise in 12 years, with the core element being 1.8%. A capital investment of £290 million was also outlined.

Brendan Arnold, Interim Director of Finance and s151 officer, provided a detailed presentation on the operating environment, key strategic issues, the Very Long-Term Investment Portfolio (VELTIP), capital programme, provisional settlement, savings, and risks. Kieran Curran, Head of Corporate Strategy and Policy, presented the findings from the budget consultation, which received nearly 500 responses. Broad support was noted for modernising services through digital tools and better procurement, alongside concerns about the impact on vulnerable groups. Partners, including district councils and the police, welcomed the level of engagement and requested its continuation.

Adults, Health and Wellbeing Services

County Councillors Graham Dalton and Daniel Matchett, Cabinet Members for Adult Social Care and Health and Wellbeing respectively, introduced the directorate's budget proposals. Helen Coombs, Executive Director, outlined a focus on prevention and early intervention, acknowledging significant rising demand and market fragility. The budget includes £40 million in pressures, with adult social care accounting for nearly 43% of the directorate's revenue budget. The Disabled Facilities Grant and the transition to digital telecare systems were also discussed.

Education and Children's Services

County Councillors Matthew Salter and Ged Mirfin, Cabinet Members for Education and Skills, and Resources, HR and Property respectively, presented the directorate's budget. Dave Carr, Director of Policy, Commissioning and Children's Health, and Paul Turner, Director of Education and Inclusion, detailed plans for growing in-house provision, investing £7 million in Special Educational Needs and Disabilities (SEND) services, and redesigning early help around family hubs. The net budget for the directorate is £266 million, with children's social care representing 17% of the overall council budget. Savings of £6.3 million are planned for 2026/27, rising to £11.2 million by 2028/29.

Place

Several Cabinet Members, including County Councillor Joshua Roberts (Rural Affairs, Environment and Communities) and County Councillor David Dwyer (Data, Technology, Customer and Efficiency), presented the Place Directorate's budget. Phil Green, Executive Director of Place, highlighted the directorate's broad responsibilities, including highways, transport, economic development, and environmental protection. The directorate's net budget is £250 million, with proposed savings of £19.6 million in 2026/27. Key areas of investment include £290 million for the capital programme, with significant allocations for highways maintenance, transport schemes, and the Eden Project in Morecambe. Waste management savings are projected through investments in anaerobic digestion facilities.

Resources

County Councillor Stephen Atkinson, Leader of the County Council, County Councillor Ged Mirfin, and County Councillor David Dwyer presented the Resources Directorate's budget. Laurence Ainsworth, Executive Director of Resources, outlined a net budget of £100 million, with proposed savings of £6.9 million in 2026/27, rising to £10.8 million by 2028/29. These savings are largely driven by service redesign, including a projected 100 full-time equivalent staff reductions across the directorate, managed through existing vacancies. The directorate is also focusing on income generation and technology efficiencies, including a transition to cloud-based systems.

Recommendations to Cabinet

Following extensive discussion, the committee made the following 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 in Lancashire, focusing on value for money.
  • Cabinet be asked to establish a cross-party working group, reporting to the relevant scrutiny committee, on the modernisation of care homes and day centres.
• Mental Health Outcomes/Adult Social Care Improvement Plan:
  • Cabinet be asked to give consideration to concerns regarding mental health outcomes for adults and children, ensuring timely assessments and adequate resourcing.
  • Cabinet be asked to utilise the Public Health Grant and other funding sources to support mental health initiatives.
  • 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 seek 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.

Work Programme

The committee noted its work programme and agreed to add Phase 2 of Lancashire County Council's Efficiency Review to the agenda for the 29 June 2026 meeting. It was also agreed that a separate meeting would be arranged in late January 2026 to consider the 2025/26 Quarter 3 Financial Monitoring Report.

The next meeting of the committee was scheduled for Thursday, 5 February 2026.