The County Council has a net budget of £967m and in setting the budget for 2022/23 included a contribution from reserves of c£19m to support the structural deficit with the budget.
The financial forecast reported to Cabinet in September, identified an estimated financial gap of £87.054m in 2023/24, with this rising to £159.678m by 2026/27 which reflect financial pressures common across local government as a whole.
To address the structural financial deficit significant work has been undertaken by Directorates, with an emphasis on savings and efficiencies that can be made to support Lancashire County Council's overall financial position. This is a difficult time economically for all councils with higher than anticipated inflationary pressures, a higher than budgeted pay award and increasing demand for services, particularly social care following the pandemic. Levels of Government funding will not be released until the late Autumn; therefore, we have had to make significant assumptions regarding the funding that will be available in 2023/24.
This report highlights savings proposals for consideration to be included in the overall 2023/24 budget, with more detailed information provided in Appendix 'A'. These are generally focused on areas which will reduce cost or generate additional income without impacting negatively on service quality. Strong financial stewardship over recent years has resulted in reserve levels which allow a considered and strategic approach to the identification of proposals to address the forecast funding.
There are several cross cutting strategic targets that are included that will further support reducing the financial gap and improve the efficiency and effectiveness of the organisation. However, even if all the proposals put forward are agreed there is still forecast to be a financial gap and therefore the final section of the report outlines potential options for achieving savings to ultimately reach a balanced budget over the lifetime of the medium term financial strategy (2026/27).
Decision type: Non-key
Decision status: Recommendations Approved
Divisions affected: (All Divisions);
Notice of proposed decision first published: 03/11/2022
Anticipated restriction: Part I -
Explanation of anticipated restriction:
Appendix 'A1' is in Part II.
Decision due: 3 Nov 2022 by Cabinet
Lead member: Cabinet Member for Resources, HR and Property (Deputy Leader)
Lead director: Director of Finance
Department: Finance
Contact: Kate Lee Email: kate.lee@lancashire.gov.uk Tel: 01772 531733.