‘Immediate’ savings are being sought across all Lancashire County Council departments in an attempt to bridge a £28m gap that has opened up in its budget for the current financial year.
That is the amount by which the authority is forecasting it will overspend by next spring if action is not taken to cut costs in the meantime.
A cabinet meeting heard that a series of “mitigations” had already been identified and that plans were being developed to ensure the books are balanced at the end of 2025/26.
A longer-term ‘efficiency review’ initiated by the incoming Reform UK administration back in June is also being trawled for any savings that can be realised in the short-term in order to bridge the potential budgetary shortfall – as well as to put the county council on a stable financial footing in the years ahead.
However, a report presented to the meeting also warned a further £10m of pressure on the finances could yet emerge in the coming months as a result of implementing a ‘recovery plan’ drawn up to improve services for young people with special educational needs and disabilities (SEND), following a critical inspection report earlier this year.
Cabinet member for resources, HR and property Ged Mirfin said that “securing sound and robust finances” was “the number one priority” for the ruling group.
He added: “Financial security enables the delivery of the council’s ambition for providing efficient and effective county services to the residents of Lancashire.”
County Cllr Mirfin said a “forensic review of budgets” was under way in order to identify “actions that can and will be taken to achieve a balanced budget – and with it, a breakeven position by the end of the financial year”.
The cabinet heard that the £28m forecast overspend figure – equivalent to 2.24 percent of the overall budget – included an additional £5.3m the authority has opted to invest in SEND staff – over and above the extra £10m that may yet be needed as result of delivering other aspects of the recovery plan.
The remainder of the shortfall tally is made up of £7.5m in “budget pressures” – services potentially spending more than they had been allocated for the year – and £15m worth of savings that were baked into the budget set by the previous Conservative administration in February, but which are at risk of not being achieved.
County council leader Stephen Atkinson said that he had “felt very clearly” in the run-up to the local elections in May that that budget was “unlikely to deliver the savings that would be required”.
It was based on the premise of making £60m of savings during 2025/26 – a quarter of which might not now be realised in the form originally envisaged.
The authority has to save £103m over the course of the next two years – with half of that amount being made up spending reductions planned for previous years that were not achieved.
County Cllr Atkinson also stressed that his administration had only been “in business” – after its first cabinet meeting in June – for just over a fortnight of the 90-day quarter 1 period on which the overspend forecast had been calculated. He added that he was “confident” that the position could be improved as the year progressed.
The cabinet report noted that a focus on reducing spending on agency staff was already having an effect – and that the bill was currently tracking £1.5m below the level it was at 12 months ago. The authority has been attempting to encourage agency workers to become permanent staff members, especially in posts where recruitment is usually difficult, including social care.
The forecast county council overspend for 2024/25, measured at the same point last year, stood at a far lower £7.5m – but the then Tory-controlled local authority ultimately exceeded the budget by £10.6m at the end of that year.
Former Conservative cabinet member Aidy Riggott – who now leads the shrunken Tory group at County Hall – said in July that the figure was in line with what could reasonably be expected of an authority with a £1.2bn budget.
Overspending and undersaving
Lancashire County Council will have to wrestle with the dual challenge of overspending departments and undelivered savings in the months ahead.
In adult services, it is projected – as things stand – that £14.9m more could be spent by the end of the financial year than was allocated in the budget for 2025/26, with income recovery posing a particular problem.
The directorate was set a savings target of £23m for the year, more than any other area of the authority – but it is currently predicted that it will fall short by £11.5m. However, the cabinet report notes that the benefits of some savings activity can be expected to be felt later in the year.
Elsewhere, the inclusion service is forecast to overspend by £6.2m as a result of ”staffing pressures” because of the additional resources required to deliver the SEND recovery plan.
Meanwhile, a £3.9m overspend is predicted for the ever-growing cost of home-to-school transport for SEND pupils.
However, across the authority, underpends in some areas offset budget exceedance in others.
Savings shortfalls by end 2025/26 (forecast as at the end of June 2025)
Adult services – target: £23.1m; predicted shortfall: £11.5m
Education and Children’s Services – target: £10.2m; predicted shortfall: £391k
Growth, Environment and Transport and Health – target: £7.5m; predicted shortfall: £391k
Other council services – target: £11.3m; predicted shortfall: £2.8m
Resources – target: £7.4m; predicted shortfall: £768k
TOTAL (2025/26) – target: £59.7m; predicted shortfall: £15.8m
‘Data is king’ in council overhaul
The efficiency review launched over the summer is considering “systematic and structural” alterations to the way Lancashire County Council works, according to the man in charge of the purse strings at the authority.
County Cllr Ged Mirfin said the savings-seeking process was being accompanied by “a relentless search for data and for evidence to justify any changes” – with staff also being asked for their ideas.
The review – which is expected to conclude in the autumn – involves reassessing key contractual and procurement arrangements – and County Cllr Atkinson said the scale of the work involved was “incredible”.
However, the Progressive Lancashire official opposition group – made of independent and Green Party members – said it feared non-Reform UK voices were being shut out of scrutinising and contributing to the work that is taking place.
Opposition leader Azhar Ali said he was “disappointed” that a promised cross-party finance committee had not yet met.
He added that it was “really urgent” that the group was convened “within weeks” – to replace the previously abolished scrutiny management board – so that the efficiency review and the ideas flowing from it could be assessed.
County Cllr Atkinson said that the data underpinning the review was not available yet – and had not even been presented to the ruling group. He pledged that the finance committee would meet as soon as it was “meaningful” for it to do so.
But Progressive Lancashire’s deputy leader Gina Dowding – also the leader of the Green Party group on the authority – said details of “what data you’re collecting” should also be shared with opposition members.
“[There are] a lot of people with longstanding experience who remained on the council [after Reform swept to power in May] who have a right to know what approach you’re taking – not just wait until you’ve gathered all the data.”
County Cllr Atkinson pledged to share with the opposition “the process map” for the review, so that they could see what was happening in the background – and said that their input would be “welcome” when the time came for more detailed scrutiny of the outcome of the process.
He added: “We’ve done this in a very detailed, strategic and collaborative manner – and to do it in that manner takes time, [as it does] to do it properly so that service delivery is not impacted as you go through [it].”
The efficiency review is an internal process within the county council, separate to the promised Elon Musk-style ‘DOGE’ team that Reform at a national level said in May it was sending in to all of the local authorities it now controls in order to weed out claimed waste.
Although Lancashire County Council was due to get an initial ‘scoping visit’ in June, it is understood the unit has yet to arrive in the county to conduct its work.
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