Budget pressures revealed at Lancashire County Council

The cost of transporting pupils with special needs to school and providing financial support to the families of vulnerable children were amongst the biggest pressures on Lancashire County Council’s budget last year.

The authority has revealed that it spent £5.2m more than it budgeted for across all of its services during the 2023/24 financial year – equating to just 0.5 percent of its £1.039bn spending pot.

Deputy leader and cabinet member for resources Alan Vincent hailed the percentage figure as one which he said he was confident would be “amongst the best financial outturn[s] for any upper-tier authority in the North West”.   Labour opposition group leader Matthew Tomlinson acknowledged that “in accountancy terms”, the books were effectively balanced.

However, the overarching performance masked significant overspends in certain areas, which were offset by underspends in others.

The home-to-school transport budget overshot its allocation by £8.1m, driven largely by the ballooning bill for taxis to ferry youngsters with special and educational needs and disabilities to class.  As the Local Democracy Reporting Service (LDRS) has previously documented, an increase in the number eligible and limits on the duration of their daily journeys have driven up costs in recent years.

Elsewhere, £2.3m more than anticipated was spent on financial assistance payments to families of children in need, the majority of which was in relation to housing support. Spending on so-called “section 17 payments” leapt by £800,000 compared to 2022/23.

Home care services for children with disabilities were overspent by £2m, contributing to a total exceedance on the children’s social care budget of £6.2m.

Meanwhile, County Cllr Vincent told the cabinet meeting at which the budgetary figures were published that the authority was making its ongoing plans to develop more of its own children’s homes – in order to reduce reliance on costly private sector operators – “a massive priority”.

Whilst the number of children in the county council’s care has fallen by almost a fifth from 2,133 in September 2020 to 1,758 in March 2024, the bill for agency residential placements has “increased significantly” over the last three years, according to a report presented to cabinet members.

More complex needs amongst those children entering care and a premium on the places that can accommodate them have driven the rise.   The average weekly cost of a private sector children’s placement in Lancashire now stands at almost £5,550.

Residential and fostering placements  – including the council-run residential provision that already exists – had a budget of £120m last year.  In spite of the pressures upon it, it was actually underspent by £100,000 – but that was possible only due to £2m of backdated health funding, which will not be repeated.

Uncharacteristically, the budget for County Hall’s equally under-pressure adult services essentially broke even last year, exceeding its £449.7m allocation by just £57,000. However, the cabinet report notes that the position was strengthened by one-off government grant funding – and that demand for homecare continues to rise.

The waste management service overspent its budget by £2.5m, with a collapse in income from recycled materials – as a result of market volatility – and increased costs for providing security at household waste recycling centres being amongst the main reasons.

The resources directorate and chief executive services budgets collectively underspent by £8m, with some miscellaneous and contingency funding pots withheld as a result of financial pressures in other parts of the authority.

County Cllr Vincent paid tribute to the work of “excellent staff” in limiting the total county council overspend in the face of increased demand for services and inflation.

The £5.2m shortfall will be met by using money from County Hall’s reserves, which stood at £181m at the end of the 2023/24 financial year.