Agenda item

1. Mr Collins, Deputy Leader and Cabinet Member for Finance and Traded Services, introduced the report. 

2. Mr Shipton, Head of Finance Policy, Planning and Strategy and Acting Section 151 Officer, advised the Committee that the budget proposals provided a balanced position for the 2026/27 budget. Across the Council, the proposals included £179.5 million of spending growth and the reversal of £28 million of previously planned savings that were one-off or irrecoverable, representing a total challenge of over £200 million. This was offset by £14.7 million from reserves, £61.7 million of savings and £14.6 million of new income generation, resulting in net growth of £116.5 million. This net growth was significantly lower than underlying service cost pressures, reflecting ongoing demand pressures that exceeded funding from central government and local taxation. Mr Shipton reminded Members that they could access the interactive Member Dashboard to further analyse the budget figures. 

3. Ms Stone, CYPE Finance Business Partner, explained that the Directorate's budget included approximately £40 million of new growth proposals, alongside the continuation of around £11 million of funding previously supported by grants and savings proposals of approximately £20 million. This resulted in a net increase of around £20 million for the director equating to approximately 5%, rising to around £30 million when the continuation of grant funding was included. 

4. Mrs Fordham added that savings had been carried out but the Service was still providing its statutory duties. Many savings, including those within transport, had been achieved through process improvements and the implementation of more efficient systems. Further work was underway to tighten transport policy so aligned more closely with legislation. This was expected to link with future proposals arising from the forthcoming White Paper to address transport overspends that were largely outside of the Council's control. 

5. In response to comments and questions it was said: 

a.    The future cost of the Kent 16+ Travel Saver and the standard Travel Saver had not yet been confirmed because final savings depended on actual usage. Officers advised that the annual price typically rose by £20–£40, and that confirmed costs would be shared with residents shortly. 

b.    Regarding the £4.2 million in savings supported by grants, it was stated that the Government had secured this funding for the next three years. Although the funding was guaranteed, the Service was still awaiting some of the detailed terms and conditions. 

c.    The proposed £1.9 million saving from recharging health services for looked after children was expected to come from claims submitted to the Integrated Care Board (ICB) for shared costs relating to children with complex needs. Previous rebates had been achieved, but income was lower this year due in part to ICB staffing instability. Nevertheless, the saving was considered achievable based on previous year performance. 

d.    In discussion about school finances, SEND funding sustainability, and strategic actions to manage SEND pressures, as well as the decision to repay a £50 million loan early and not apply the maximum Council Tax increase, the Committee heard that early repayment would save £670,000 annually for 40 years. Members were reminded that Council Tax increases should not be automatic and must balance financial pressures with responsible spending. The SEND deficit remained a major risk, currently mitigated by a statutory override that expires in March 2028, making deficit reduction essential and a key feature of the Chief Financial Officer’s statutory assurance statement. 

e.    Additional recharge to schools for next year was to amount to £2.5 million annually. Previously the Council had absorbed the associated costs through its General Fund 

f.     On the question of cash flow assurance and the timeline for efficiency savings, it was explained that the Council was investing in “invest to save” initiatives, including bringing children’s homes back inhouse, which was expected to generate at least £1.5 million in recurring annual savings. It was also confirmed that the Council continued to report regularly to the Department for Education under the Safety Valve Agreement. Although increased costs and delays to new special schools had pushed the SEND deficit higher than expected, the DfE had agreed to continue payments provided the Council sustained efforts to reduce overspending. 

RESOLVED that the Committee noted the draft capital and revenue budget proposals.