The Budget and Finance Scrutiny Committee of Lancashire County Council met on Thursday, 5 February 2026, to review the 2025/26 Quarter 3 Financial Monitoring Report. The committee discussed significant variances in the revenue and capital budgets, with particular focus on pressures within Adult Social Care and Children's Services, and the underspend in the capital programme. Recommendations were made regarding the modernisation of care homes and day centres, mental health outcomes, and the council tax precept.

Quarter 3 Financial Monitoring Report

The committee reviewed the 2025/26 Quarter 3 Financial Monitoring Report, which detailed the council's revenue and capital financial position as at 30 November 2025. The report indicated a forecast revenue outturn overspend of £6.117 million, representing 0.49% of the approved budget. Significant pressures were noted in Adult Services and Education and Children's Services, primarily driven by increased demand for commissioned care, placements for children with disabilities, and home-to-school transport for pupils with Special Educational Needs and Disabilities (SEND).

The capital programme for 2025/26 was revised to £299.106 million. The forecast outturn for capital expenditure was £203.257 million, resulting in a forecast underspend of £95.849 million (32.05%). This underspend was attributed to a combination of factors, including the reprofiling of spend on multi-year projects and delays in the commencement of some schemes.

A significant overspend was also forecast for the Dedicated Schools Grant (DSG), amounting to £73.08 million, primarily due to increasing demand and placement costs for pupils with SEND. The report highlighted that the DSG funding allocation had not kept pace with this growing demand for many years.

Key Discussions and Recommendations

Modernisation of Care Homes and Day Centres: The committee discussed concerns regarding the modernisation of care homes and day centres. Following debate, it was resolved that Cabinet be urged to consider different, not-for-profit models for upgrading these facilities, taking value for money into account. Furthermore, Cabinet was asked to establish a cross-party working group, reporting to the relevant scrutiny committee, on the modernisation of care homes and day centres in Lancashire.

Mental Health Outcomes and Adult Social Care Improvement Plan: The committee expressed concerns related to mental health outcomes for both adults and children, questioning whether the council was adequately resourcing these services to ensure timely assessments. It was resolved that Cabinet be asked to give consideration to these concerns and to utilise the Public Health Grant first, along with other funding sources, to support identified mental health issues. Additionally, Cabinet was asked to consider the funding required to implement the improvement plan for Adult Social Care, following a Care Quality Commission inspection report.

Future Funding and Council Tax Precept: In relation to future funding and the council tax precept, the committee resolved that the Leader be asked to write to the relevant Secretary of State to seek assurance that the council would not be viewed less favourably by the government in future funding allocations by setting a council tax precept below the maximum available.

Work Programme: The committee agreed that future meetings should include a summary of changes to the Medium-Term Financial Strategy resulting from the budget, and a report on the progress of in-year savings to ensure ongoing oversight.

The committee also noted that actions and written responses outstanding from the previous meeting on 24 November 2025 were still awaited and officers were asked to provide these as soon as possible.

The meeting concluded with thanks to the officers involved in the budget process and a reminder of the date of the next meeting.