Agenda item

The Commission considered a report and a supplementary report of the Director of Corporate Resources, the purpose of which was to provide an update on the 2025/26 revenue budget and capital programme monitoring position as at the end of Period 6 (the end of September 2025).  A copy of both reports marked ‘Agenda Item 10’ is filed with these minutes.

Arising from discussion, the following points were made:

(i)               Members expressed deep concern that the sharp rise in the High Needs Block deficit which had almost doubled in less than a year now created a real financial risk to the Council, particularly given the £34m cost avoidance delivered through Newton Europe’s work with the Department in recent years.  Whilst the scale of the increase since May 2025 had been unprecedented, Members noted that the Council was not an outlier, and a similar trend was being reported by other authorities. 

(ii)              The Assistant Director of Children and Family Services reported that the increase stemmed from uncertainty around the government’s SEND White Paper and media speculation about Education, Health and Care Plan (EHCP) rights which had undermined parental confidence and prompted early applications for an EHCP. It was noted that parental requests for an EHCP had risen from 19% to 48% since January 2025, meaning the Council had reached its three-year EHCP projection levels early. 

(iii)            Members noted that mitigation measures were in place to address this focusing on reducing EHCP requests through strengthened mainstream provision, address reliance on Independent Specialist Providers which remained a key cost driver nationally, supporting schools to manage exclusions and adopt flexible teaching approaches, and expanding local specialist provision, with 90 additional places planned for 2026 and further expansion thereafter. Members acknowledged the scale of the challenge and urged a collaborative approach with schools and providers to manage demand effectively.

(iv)            The engagement of Newton to carry out an efficiency review and to identify savings across the Council would cost £1.4m.  This was a fixed fee for the investigatory work now being undertaken (phase 1) and any further work to implement recommendations would be a separate decision at a later point. There was the potential that the Council could receive a rebate of £250,000 if it later decided to proceed to implement Newton’s recommendations and engage them further to support that next phase.

(v)             Members acknowledged that no commitment had been made beyond phase 1. Although an upper cost estimate of £30m had been provided, the cost of engaging Newton to assist with phase 2 implementation would be subject to a later decision. This would depend on which recommendations the Council chose to pursue after completing the initial review and what support was required to do this. The Director reassured Members that any decision to proceed with potentially costly recommendations would require the resulting savings to justify the additional expenditure. For phase 2, a performance-based model would be used, meaning some of the fees paid to Newton would be dependent on successful delivery of savings.

(vi)            Concerns were raised regarding timescales and the visibility of planned savings in time for the MTFS to be considered in the New Year.  The Leader emphasised the need for patience while contractual work was completed with Newton who had only been instructed to conduct the review in October.  The Leader commented that early indications were that the process would be positive and he reiterated his commitment to continue to seek to avoid service cuts where possible, focusing instead on efficiency and improvement. 

(vii)          The Council does not have a vacancy freeze in place, but financial controls continued to be in place that provided an added layer of management oversight. Vacancies held for a time tended to be as a result of recruitment difficulties as the Authority struggled to be competitive against the private sector.

(viii)         The further reduction in the Council’s debt was welcomed and some members commented on how this had been as a result of the approach taken by the previous administration that had come to fruition.

RESOLVED:

That the update on the 2025/26 revenue budget and capital programme monitoring position as at the end of Period 6 (the end of September 2025) and progress made with regard to the efficiency review be noted.