To report the forecast position for 2025/26 at Quarter 2 (September 2025), including explanation and analysis of the drivers for the material budget variances, and to outline current and planned recovery activity to reduce the forecast overspend.

The Chair took the report as read and opened the item for debate. The key points of the discussion included:

Community Wellbeing – Adult Social Care

1. Members questioned the drivers of increased Adult Social Care cost pressures. Officers explained that pressures arose from: sustained hospital discharge demand, post-COVID loss of independence, increased numbers of self-funders falling below the financial threshold, longer residential care stays and changes to continuing healthcare (CHC) eligibility, with mitigations including strengthened front-door controls, prevention, commissioning improvements and closer monitoring of high-cost packages.

2. The committee asked how hospital activity had contributed to pressures. Officers advised that consistently high hospital occupancy had generated exceptional discharge demand during the year, with post-COVID impacts resulting in higher support needs on discharge, creating pressures that exceeded reasonable forecasting assumptions.

3. Members queried the impact of increased longevity without improved health. Officers confirmed that people were living longer with complex needs, leading to longer care packages and extended residential stays, significantly increasing cumulative costs.

4. The committee enquired about the financial impact of self-funders falling below the threshold. Officers advised that rising living costs had increased the number of people requiring Council support, creating unplanned and difficult-to-predict budget pressures.

5. Members sought clarification on changes to continuing healthcare eligibility. Officers confirmed that a local ICB policy change now limited continuing healthcare funding to health elements only, transferring greater financial responsibility to the Council.

6. Members asked how the Council was challenging continuing healthcare decisions. Officers explained that continuing healthcare case management had been centralised to improve consistency and challenge, with cases progressing through formal dispute processes and escalation through regional adult social care networks.

7. Members asked about political engagement with the Integrated Care Board. The Leader confirmed that senior-level discussions were ongoing, with the issue being raised through the Health and Wellbeing Board and further input from council members was welcomed.

Managing Demand, Prevention, and Commissioning

8. The committee enquired about what actions were being taken to manage demand at first contact. Officers described enhanced front-door arrangements focused on understanding need, preventing escalation into long-term care and increasing use of alternative community-based support.

9. Members queried how the Council was working with the voluntary and community sector. Officers advised that alternative commissioning models were being explored to support preventative and community-led provision and reduce reliance on traditional care models.

10. Members asked why domiciliary care costs remained relatively stable. Officers advised that framework-based purchasing with fixed rates had limited inflationary impact, resulting in modest cost growth despite increased activity.

11. The committee queried why residential care costs continued to rise. Officers confirmed that longer lengths of stay and increased provider prices were driving the pressure, making residential care the largest cost driver.

12. Members asked how reliance on spot purchasing was being addressed. Officers confirmed that work was underway to develop more strategic commissioning arrangements, including block contracts and longer-term provider relationships.

13. A member asked about the role of ‘CareCubed’. Officers advised that the tool provided fair-cost benchmarking based on local conditions and would support evidence-based negotiations with providers.

In-Year Position and Forecasting

14. The committee asked whether there were early signs of improvement. Officers reported that Quarter 3 data indicated reductions in numbers supported and associated costs, reflecting improved demand management.

15. Members queried why forecasts were higher earlier in the year. Officers explained that prudent forecasting assumed full-year support, with reductions typically emerging later in the year as activity stabilised.

Budget Oversight and Future Budget Setting

16. Members asked whether the Q2 position indicated weaknesses in forecasting. The Leader advised that demand-led services were inherently volatile and that increased activity, rather than inefficiency, was the primary driver of variance.

17. Members queried how future budgets were being developed. The Section 151 Officer confirmed that the 2026/27 budget reflected in-year data, demographic trends, JSNA evidence and service changes, and was subject to extensive internal challenge.

18. Members asked how transparency could be improved. Officers noted the suggestion that clearer communication of assumptions would strengthen assurance, and this was acknowledged as a potential recommendation.

Temporary Accommodation

19. Members asked why temporary accommodation costs continued to rise. Officers advised that demand had increased due to sustained housing market pressures and statutory homelessness duties.

20. The committee asked how value for money was being improved. Officers confirmed that unit costs had reduced through improved procurement and negotiation, resulting in a lower overspend than in previous years despite higher demand.

21. Members asked what preventative measures were in place. Officers outlined increased prevention staffing, rent deposits, arrears payments and early intervention to prevent homelessness.

22. Members enquired the use of empty homes. Officers confirmed that targeted empty homes work was underway, with some properties already brought back into use.

23. The committee asked about partnership working with voluntary organisations. Officers confirmed strong and ongoing collaboration with organisations such as Venture across multiple service areas.

SEND Transport

24. A member asked why SEND transport continued to overspend. Officers advised that demand had increased sharply, particularly since the autumn term, reflecting a national trend that could not be fully anticipated.

25. Members queried what actions were being taken to control costs. Officers outlined route optimisation, contract challenge, engagement with providers, use of routing software and delivery of a £0.5m savings target.

26. A members asked whether an in-house fleet was being considered. Officers confirmed that a review supported leasing rather than purchasing vehicles, with proposals to be considered as part of the 2026/27 budget.

27. The committee enquired about the use of personal travel budgets. Officers confirmed these were already in use and were being expanded to promote independence and value for money.

Overall Assurance

28. Members sought assurance that all reasonable steps were being taken to control costs. The Leader and officers confirmed that robust management action was in place across adult social care, temporary accommodation and SEND transport, and that while pressures remained significant, the Council was actively working to stabilise budgets and improve sustainability.

At the conclusion of the debate the committee agreed the following recommendations based on discussion from both item 7 and item 8.

Recommendations:

1. Given the council faces the largest savings requirement in its history, approximately £30 million, the Scrutiny Management Board recommends that Cabinet prioritises capital investment and officer capacity toward projects that deliver the greatest and most immediate relief to the revenue budget.
2. Cabinet adopt a bolder approach to borrowing to deliver capital projects that will relieve pressure on the revenue budget.
3. Council should maximise its relationship with partners to explore the use of property assets when determining its medium-term financial strategy.
4. Cabinet should enable commercialisation in services by focusing on outcomes rather than activity in its performance reporting.
5. There should be more transparency on the RAG status in the performance plan and how that flows through to underlying risks of slippage in the Capital Programme.
6. The executive should intensify its efforts at a strategic level with the Integrated Care Board to ensure that cost pressures on the board are not transferred to the council.