Agenda item

1.    The item was introduced by Brian Collins, Deputy Leader, who presented the Revenue and Capital Budget Monitoring Report Outturn 2025-26 and highlighted that the report related to the first full financial year under the current administration.

2.    In response to questions and comments from Members, discussion covered the following:

a)    Mr Collins advised that Adult Social Care (ASC) continued to represent one of the most significant financial pressures facing local authorities nationally. He explained that work was ongoing to strengthen financial management arrangements and manage increasing demand pressures. Whilst no guarantees could be given regarding future overspends, every effort was being made to minimise the requirement to draw on reserves.

b)    Mr Collins explained that the ASC overspend reflected a combination of factors, including increasing demand, procurement challenges and the non-delivery of planned savings. He highlighted that the level of overspend had reduced during the latter part of the financial year.

c)    Mr Collins stated that the General Fund reserve stood at 4.31% at the end of 2025-26 and was forecast to increase to 6.37% during the current financial year. He explained that the Council continued to work towards maintaining reserves within the recommended range of 5-10%.

d)    Mr Collins advised that Delivery of Local Government Efficiency (DOLGE) activity had become embedded across the Council and expressed confidence that this work would contribute to future savings and improved financial performance.

e)    The Chair reminded Members that questions should relate to the report and that political debate would be addressed separately.

f)     Mr Collins expressed confidence in Council officers and the relevant teams and stressed that the forecasts had been prepared under the previous administration. He also highlighted the appointment of the new Corporate Director for Adult Social Care and Health and referred to the ongoing work being undertaken to minimise avoidable suffering for residents.

g)    Mr Collins highlighted the administration’s achievement in reducing the Council’s debt through measures such as early repayments, resulting in annual revenue budget savings of approximately £1.3 million per year.

h)    Mr Collins expressed that there would be no benefit in reinstating the Treasury Management Group, citing its previous lack of results when arrangements allowed for Member participation.

i)     Brendan Arnold, Corporate Director of Finance, advised that the Council had submitted the required Special Educational Needs and Disabilities (SEND) Reform Plan to the Department for Education (DfE) and continued to work closely with Government advisers. He indicated that there was no reason to believe Kent would be less successful than other authorities participating in the process and that a decision was anticipated later in the year. He added that SEND pressures continued to be experienced nationally and that Kent continued to work with Government and partners to manage the associated financial risks.

j)     Mr Collins highlighted the difficulty in predicting future overspends, stating that significant financial pressures remained within ASC and Children, Young People and Education (CYPE) services and that budget movements between financial years could occur.

k)    Mr Collins highlighted that significant emphasis was being placed on the delivery of capital projects, with regular meetings held to oversee progress and the Council’s infrastructure and property programmes.

l)     In response to a question regarding Lender Option Borrower Option (LOBO) loans, Mr Collins advised that no decision had been made regarding the repayment of the loans and that any such matters would be considered through the Council’s normal treasury management procedures.

m)  Mr Collins highlighted that the position remained uncertain and subject to ongoing developments in relation to LGR, making it difficult to take definitive decisions regarding future capital expenditure at this stage.

n)    Beverley Fordham, Cabinet Member for Education and Skills, explained that rising costs associated with independent specialist placements reflected increasing levels of demand and national pressures. She outlined work undertaken to expand specialist provision, increase capacity within maintained schools and reduce reliance on higher-cost independent placements over time.

o)    Ben Watts, Deputy Chief Executive, suggested that a number of matters raised during the discussion be taken away for consideration through the agenda setting process and addressed in a future report.

3.    Following the questions, the Chairman welcomed comments and views from the Committee about the report. These included:

a)    A Member highlighted concerns regarding the ongoing pressures within ASC and the impact that any future overspends may have on the Council's reserves position. The Member recommended further reporting to support monitoring and contingency planning.

b)    A Member suggested a report be produced identifying capital projects should continue and which may no longer be progressed, including those affected by LGR and any other factors impacting delivery.

c)    A Member expressed concern that the assumptions underpinning the Medium Term Financial Plan (MTFP) did not adequately reflect the Council's recent history of overspending and highlighted ongoing financial pressures within CYPE and the High Needs Block.

d)    A Member suggested that future budget monitoring reports include clearer information regarding the impact of DOLGE activity to support effective scrutiny.

e)    Mr Watts advised that identifying and reporting the specific financial impact of DOLGE activity could be challenging due to its cross-cutting nature but confirmed that officers would consider how best to reflect this in future reporting. It was confirmed a separate meeting would take place in order to identify how the matter could be best addressed.

f)     A Member highlighted concerns regarding the deliverability of certain savings proposals within the 2026/27 budget, commenting that some budget lines did not appear to be fully costed and could increase the risk of future overspends. The Member requested that the September Q1 report include an update on the delivery of those savings and that their implementation continue to be monitored.

g)    A Member highlighted concerns regarding the level of underspend within the capital programme and suggested that the Committee receive quarterly updates on capital spending to monitor progress and understand the reasons for non-delivery.

h)    A Member thanked officers and the Deputy Leader for the report and commented that it provided reassurance regarding the Council's financial position during the period under review.

i)     A Member highlighted the potential impact of delays to capital expenditure programmes, particularly in relation to building projects, and suggested that the administration set out the measures being taken to ensure approved capital budgets are delivered in a timely manner so as to maintain value for money.

j)     A Member emphasised the importance of continued scrutiny of reserves, underspends and unrealised efficiency savings.

4.    The Chair welcomed the Cabinet Member to provide clarification on comments made during the debate. This included the following:

a)    Mr Collins clarified that he could not guarantee that overspends would not occur, particularly given the pressures within ASC and CYPE, but highlighted that he would continue working with officers to deliver the Council's financial objectives.

5.    The Chair summarised the discussion and highlighted the importance of timely scrutiny of financial monitoring reports. He also emphasised the need to improve demand forecasting and understanding of future pressures, particularly in ASC and SEND, to support effective long-term financial planning. The Chair proposed to note the report and make the following recommendations to the Cabinet Member:

a)    That further contingency planning in relation to Adult Social Care pressures be undertaken and reported to either the Adult Social Care and Public Health Cabinet Committee or the Scrutiny Committee.

b)    That the September Q1 report include updates on the delivery of savings.

c)    A paper be produced identifying the capital projects that must continue and those that may no longer be progressed, including those affected by LGR and any other factors impacting delivery.

6.    This was agreed by the Committee.

RESOLVED that the Scrutiny Committee note the report and make the following recommendations to the Cabinet Member:

a)    That further contingency planning in relation to Adult Social Care pressures be undertaken and reported to either the Adult Social Care and Public Health Cabinet Committee or the Scrutiny Committee.

b)    That the September Q1 report include updates on the delivery of savings.

c)    A paper be produced identifying the capital projects that must continue and those that may no longer be progressed, including those affected by LGR and any other factors impacting delivery.