Agenda item

The Panel received a report which provided details of the Council’s financial position at Quarter 1 of the 2026/27 financial year including the General Fund (GF) Revenue and Capital budgets. The report was originally published as part of the agenda papers for Cabinet on 15^th September 2026. Overview and Scrutiny considered the report at its meeting on 17^th September. The Panel was asked to scrutinise the elements of the budget that were relevant to its remit. The report was set out in the agenda pack at pages 9-82. The Corporate Director of Children’s Services was present for this item, along with; the Director of Safeguarding and Social Care, the Director of Schools and Learning. The Cabinet Member for Children, schools and Families was also present for this item. The Head of Finance for CYPS was also present. The following arose in discussion of the report:

a.    The Panel noted that the projected position for Children’s Services in the General Fund at Q1 was an overspend of £3.12M. This position had been managed down through management actions from a position of circa £4.5m. Of the £3.12M projected overspend, this was made up of £2.986M of base budget pressures and £137k of non-delivery of savings (from an overall savings target of £857K). Some of the main pressures on the base budget included Home to School transport (£356k), Placements (£821k), Digital Savings (£772k), and a corporate 5% staffing reduction (£2.1M). Within the Dedicated Schools Grant (DSG), the High Needs Block was projecting an overspend position of £8.4m. 

b.    In response to a question, officers advised that they did undertake benchmarking, using DfE data to understand how effective a school was at managing its budget.

c.    In response to a further question, officers set out that they were working with schools to have joint procurement arrangements and that the Council was encouraging schools to work more collectively around the common problems that schools faced. It was acknowledged that there was more work to be don’t in this area.

d.    In response to a questions about the cost to the Council from academisation, officers advised that there were set guidelines by the DfE on what happened with a school deficit or surplus and that there was a reconciliation process between the DfE and the academy partner. There should not be a net cost to the Council arising from a school with a deficit becoming academised but, officers commented, that sometimes this did happen.

e.    In response to a question, the Corporate Director advised that the level of children in care remained fairly stable at around 300, but what had changed was the complexity of need in the placements that were being made and that this created a cost pressure. The Corporate Director commented that her job was to make sure that children were in the right placement at any particular time, and that placement gave them the best life chances. The service was looking to maximise in-house provision where it could, as this was better and cheaper. There were also regional care cooperatives where local authorities worked together to manage the market better. Officers highlighted the importance of ensuring that there was wraparound support in place for young people when they had to cope with periods of their lives with physical, emotional, or mental support needs. 

f.      The Panel queried the £14.8M underspend identified at paragraph 8.3 of the report relating to six projects that were in pre-procurement. In response, officers commented that this related to the capital programme and that underspends would be re-profiled where appropriate. Officers set out that as with any capital project, extensive work went into minimising the amount of borrowing that was needed.

g.    In response to a follow-up question, officers advised that one of those six projects related to development properties for foster carers and the provision of larger accommodation so that foster carers could take more children. Another one of the projects related to provision of dedicated care leaver flats in Hornsey Town Hall.

h.    The Chair asked the Cabinet Member to provide her reflections on the overspend. In response, the Cabinet Member set out that some of the areas of overspend were quite challenging and that some of the causes of those pressures were national issues, such as rising fuel costs. In relation to staffing numbers, it was suggested that Childrens Services was heavily reliant on face-to-face interactions and that there was a danger of increased risk to young people from reducing the numbers of staff and reducing the quality of service provided. The digital saving for Childrens Services had been requested corporately. The Cabinet Member questioned how appropriate these were in relation to Childrens Services, given the importance of relationships and the need to interact face-to-face. The Cabinet Member provided assurances that she believed everything that could be done was being done around efficiency.

RESOLVED

That the Panel gave consideration to the contents of the report and, following questions to the Corporate Director of Childrens Services, submitted any recommendations that arose to the Overview & Scrutiny Committee.