Financial outlook remains broadly positive

Monday, September 6, 2021

The financial outlook at Lancashire County Council remains broadly positive despite continuing uncertainty about local government funding and the effects of the Covid-19 pandemic, councillors have been told.

A 'Money Matters' report considered by the council's cabinet updated on the authority's current financial position, as well as a medium term forecast for the next three years.
It outlined that the council's finances remain in a strong position and, based on the current forecast, there are sufficient reserves to support the revenue budget gap through to and including 2024/25, the end of the council's current Medium Term Financial Strategy.
It did however highlight that there were still financial challenges ahead.
This includes carefully monitoring any increase in demand for adults and children's social care as well as making planned savings of £42.727million, together with identifying further savings by 2024/25.
Members were also told there remains uncertainty about the next multi-year Government Spending Review and potential delays to the implementation of changes to the way local government is funded after the Prime Minister and Chancellor conducted a one year review at the end of 2020 because of the pandemic.
County Councillor Alan Vincent, deputy leader of the council, said: "There has been careful management of the council's finances over recent years which means we are in a good position to meet future challenges.
"Thanks to our healthy reserves the forecasts show that we will be able to balance our books for several years to come.
"We cannot rely on reserves forever though, which is why we have a number of planned savings to ensure our strong financial footing continues, and we will also continue to monitor our financial position carefully.
"In this way we can continue to invest in important council services for the benefit of people in Lancashire and deliver on our priority to protect the services our most vulnerable residents rely on."

Notes to Editors
The Medium Term Financial Strategy indicates a financial deficit of £63.958m by 2024/25.
The council is forecast to hold £180.340m of uncommitted transitional reserve at the end of the financial year. This is sufficient to meet the forecast gap for all of the years covered by the MTFS, 2022/23 to 2024/25.
The 2021/22 revenue forecast outturn is £876.194m, representing a projected underspend of £5.219m (0.59%) of the agreed budget.
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