The Cabinet of Kent County Council met on Thursday, 29 January 2026, to discuss the council's financial position and future budget. Key decisions included noting the Q3 revenue and capital budget forecast outturn for 2025-26, agreeing to capital budget adjustments, and approving the use of an additional £7 million in flexible capital receipts. The Cabinet also endorsed the draft budget proposals for 2026-27, including a proposed 3.99% Council Tax increase, and the draft capital programme for 2026-36, which will be presented to the County Council for final decision.

Revenue and Capital Budget Forecast Outturn Report – Quarter 3 2025-26

The Cabinet received an update on the council's financial performance for the third quarter of the 2025-26 financial year. A significant revenue overspend of £43.5 million was reported, representing 2.8% of the overall budget. To mitigate this, an additional £7 million in capital receipts was identified for use against transformational activity, reducing the projected overspend to £36.5 million. This measure aims to reduce the risk of unplanned drawdowns from reserves.

Specific actions are being implemented across the authority, with a particular focus on Adult Social Care and Health, which accounts for the largest overspend (£49.7 million). This overspend is attributed to continued financial challenges in the sector, including increased provider contract costs, rising demand, and the complexity of needs. Savings totalling £97 million are expected to be delivered in 2025-26, representing 80% of the target.

The capital forecast outturn shows a £64.3 million underspend against the budget. This is split between a £15.2 million real variance and a £79.5 million rephasing variance. The real variance is partly due to additional funding not yet included in the budget.

The Cabinet agreed to:

• NOTE the revenue and capital forecast outturn position for 2025-26.
• AGREE the capital budget adjustments detailed in the report.
• AGREE the use of the additional £7 million flexible capital receipts and the associated changes to the flexible use of capital receipts strategy for 2025-26.

Draft Capital Programme 2026-36, Revenue Budget 2026-27 and Medium Term Financial Plan (MTFP) 2026-29

The Cabinet considered an updated draft of the council's financial plans for the coming years. The net revenue budget for 2026-27 is proposed at £1,647.8 million, an increase of £116.5 million (7.6%) on the 2025-26 budget. This increase is driven by core-funded spending growth of £180.0 million, which continues to outpace funding from central government and local taxation. The budget is balanced through a combination of savings, income generation, and one-off measures, including £9 million from the flexible use of capital receipts and £16 million from earmarked reserves no longer required for their original purpose.

A proposed 3.99% Council Tax increase for 2026-27 was also presented.

The draft capital programme for 2026-36 includes planned spending of £1,967 million, funded primarily by government grants (£1,379 million) and existing borrowing commitments (£354 million), with no new borrowing planned for 2026-27.

The Cabinet was asked to:

• CONSIDER any proposed amendments from Cabinet Committees.
• ENDORSE the draft budget to be presented to County Council on 12th February 2026 for final decision.

Other discussions

The meeting also included updates from Cabinet Members on various portfolios, covering areas such as Adult Social Care and Health, Community and Regulatory Services, Environment, Coastal Regeneration and Special Projects, Economic Development and Special Projects, Education and Skills, Integrated Children's Services, Highways and Transport, and Local Government Efficiency. These updates provided information on ongoing initiatives, recent achievements, and future priorities.

A significant portion of the discussion revolved around the council's financial position, with particular emphasis on the pressures within Adult Social Care and Children's Services. The need for robust savings plans and effective financial management was repeatedly highlighted. The provisional Local Government Finance Settlement was also discussed, outlining changes to funding allocations and the consolidation of grants.

The Cabinet also noted the Quarter 2 Performance Report and the actions being taken to address areas where performance was not meeting targets. The Corporate Risk Register was presented, highlighting key risks and the ongoing work to manage them.

The meeting confirmed that the council is committed to restoring financial sustainability while maintaining and improving frontline services, as outlined in the strategic statement, Reforming Kent. ¹