Financial outlook looks brighter but council must 'tread forward carefully'
Ongoing efforts by Lancashire County Council to balance the books are paying off as the authority has reduced its forecast funding gap from the last reported position.
In November 2023, it was reported to cabinet that there was a forecast deficit of £14.505m in 2024/25, increasing to £18.294m by 2026/27.
Through strong financial management, the latest Medium Term Financial Strategy Update 2024/25 - 2026/27, which went before cabinet on Thursday, shows a significant improvement in the council's financial outlook.
The authority is now forecasting a financial deficit of £2.908m in 2024/25, rising to £7.814m in 2025/26 with a projected surplus of £4.892m by 2026/27.
The position post 2024/25 is based on a number of assumptions regarding future finance settlements, reducing inflation and the impact of growing demand for council services, with local government as a whole seeing significant growth in demand for social care and home to school transport in particular.
At cabinet on Thursday, councillors were updated on a new package of savings proposals totalling almost £15m covering the period 2024/25 to 2026/27.
The council's transitional reserve, which currently stands at £165m at the end of 2023/24, will be utilised to bridge the funding gap in 2024/25 and will enable plans to be developed strategically to deliver a balanced and sustainable budget in future years. The transitional reserve will also be pivotal in the modernisation and transformation of council services.
Cllr Alan Vincent
Cllr Alan Vincent, Deputy Leader of Lancashire County Council and cabinet member for Resources, HR and Property, said: "The county council has a long track record of strong financial management and because of this we find ourselves in a relatively good position compared to many councils across the country.
"What we are doing is clearly working but we cannot allow ourselves to get complacent as local authorities continue to face considerable financial challenge and uncertainty.
“The surprise 0.1% rise in inflation in December shows we need to tread forward carefully.
"We know there is a tough road ahead and we will do everything in our power to keep services running both efficiently and effectively, while keeping spending under control."