Agenda item

John Betts (Interim Corporate Director Finance), Cath Head (Head of Finance Operations) and Joe McKay (Acting Chief Accountant) were in attendance for this item

1.    Mr Collins (Deputy Leader of Kent County Council) introduced the report that provided details of the Council’s financial position as at the end of September 2025-26, which included progress against savings targets within the revenue budget, capital cash limit changes made between Q1 and Q2 and monitoring updates for reserves, treasury management and prudential indicators. Mr Collins, reported that the forecast outturn variance was a £46.5m overspend, representing 3% of the overall budget. He stated that the scale of the overspend was unprecedented, posed a critical risk to the Authority’s financial resilience, and required urgent action. Due to the exceptional position, additional commentary had been provided in the report outlining actions being implemented across the Authority and specific measures within the Adult Social Care and Health Directorate to address the overspend in the current financial year. The most significant overspend was in Adult Social Care and Health, totalling £50.9m, driven by savings no longer expected to be achieved and service-related pressures, particularly in older people’s residential and home care services. This reflected ongoing financial challenges in the adult social care sector nationally. Further overspends were forecast in Children, Young People and Education, mainly due to high-cost packages for looked-after children with disabilities, partially offset by underspends in home-to-school transport. There was a small overspend in Growth, Environment and Transport, primarily due to the English National Concessionary Scheme, and underspends in the Chief Executive’s Department, Deputy Chief Executive’s Department, and non-attributable costs. Savings for the year totalled £121m, with £98m expected to be delivered in 2025–26, representing 81% of the target. The schools’ delegated budgets position largely reflected demand for special educational needs support and was funded by the Dedicated Schools Grant, with a government announcement expected later in the year. The Capital Forecast Outturn position showed a £35.4m underspend against budget, comprising a £26.2m real variance and a £61.6m rephasing variance. Mr Collins noted that these figures were based on forecasts from the previous administration and stated that, given the circumstances, progress was being made.

2.    Mr Betts added that the financial challenge was exceptional and that plans were in place to reduce the overspend as far as possible. Actions were detailed in the report and were being monitored regularly to minimise the impact on reserves and improve the position for the next financial year.

3.    Further to questions and comments from Members the discussion included the following:

(a)  It was noted that these statutory costs were placing significant strain on councils nationally and that central government should assume greater responsibility. Mr Collins, agreed with the points raised and stated that the Council must provide statutory services, but acknowledged this was a national problem that should not rest solely with local authorities. He warned that without increased government funding, councils would face difficult choices, including cutting essential services or considering significant council tax increases, though no decision had been made. Mr Collins noted that if Adult Social Care were excluded, the Council’s financial position would appear much stronger. He urged government to deliver the delayed Fair Funding Review and increase grant payments, stressing that additional funding for Adult Social Care was essential for all councils.

4.    RESOLVED that Cabinet agree to:

a)    NOTE the revenue and capital forecast outturn position for 2025-26 as detailed in the report, and accompanying appendices

b)    NOTE the implementation of actions to mitigate the revenue overspend, both within Adult Social Care & Health specifically and across the authority

c)    AGREE the revenue and capital budget adjustments detailed in the report