Agenda item

Cath Head (Head of Finance Operations) was in attendance for this item.

1.    Mr Collins (Deputy Leader of Kent County Council) introduced the report that set out the revenue and capital budget forecast monitoring position as at Quarter 3 2025-26, including progress against savings targets within the revenue budget, capital cash limit changes made between Q2 and Q3 and monitoring updates for reserves, treasury management and prudential indicators.

He reported that the forecast outturn variance for Quarter 3 showed an overspend of £43.5 million, representing 2.8% of the overall budget. He explained that an additional £7 million of capital receipts had been identified as available for use against transformation activity in 2025–26 under the Flexible Use of Capital Receipts Directive. This would help reduce the overspend to £36.5 million, thereby reducing the risk of unplanned drawdowns from reserves in order to balance the year?end position.

He noted that a number of actions were being implemented across the Authority, including specific measures within the Adult Social Care and Health Directorate, to address the overspend. He emphasised that the position reflected the continued financial challenges facing the Adult Social Care sector nationally.

Mr Collins stated that savings achieved this year totalled £121.5 million and £97 million was expected to be delivered in 2025-26, representing 80% of the target. He further reported that the capital forecast outturn showed a £64.3 million underspend against budget, consisting of a £15.2 million real variance and a £79.5 million rephasing variance.

Mr Collins reiterated the Cabinet’s thanks to the officers present and those supporting the work more broadly. He stated that their continued professionalism had helped steer the Authority in its current direction.

2.    Mrs Head confirmed that the monitoring forecast had reduced, largely due to the application of the £7 million flexible use of capital receipts, which had helped to lower the reported position. However, she emphasised that this did not address the underlying cost drivers, which would need continued focus going forward. She stated that further work was required to bring the £36.5 million figure down, as it remained a very significant sum. Reducing this position would have a direct impact on the Authority’s general reserves, as a lower year?end overspend would reduce the drawdown on general reserves, thereby strengthening the Council’s financial resilience in future years.

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

(a)  In response to what initiatives had been introduced to help stabilise the adult social care budget, Miss Morton (Cabinet Member for Adult Social Care and Public Health) confirmed that whilst she remained very conscious of the cost drivers she was extremely pleased with the work undertaken within the directorate in recent months and thanked all staff for their efforts. Miss Morton explained that strict spending controls across the department and the wider council had contributed significantly to the improved position. She reported that updates to practice and policy, robust negotiations with individual providers, and joint brokerage with the NHS had all supported greater stability. She added that the Leader had chaired a round?table session with providers of nursing homes, residential care and supported living to discuss future budget proposals and longstanding issues, which had strengthened engagement and understanding of the market. Miss Morton also highlighted that prevention activity had contributed to reducing the adult social care overspend by £1.3 million.

(b)  With regard to when final results for the financial year would be available, Mr Collins confirmed that the end of March marked the close of the current financial year (quarter4). He stated that, subject to the continuation of current trends, he hoped to report positive outcomes at the end of the financial year

4.    It was 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)    AGREE the capital budget adjustments detailed in the report

c)    AGREE the use of additional £7m flexible capital receipts and the associated changes to the flexible use of capital receipts strategy for 2025-26