Recently published figures reveal that the authority had spent only £851.4m of the £881.4m that it had in its coffers to cover day-to-day costs during the 12 months to the end of March 2022 - an underspend of 3.3 percent.
County Hall will use some of the cash for a multi-million pound upgrade to the system for processing school place applications, as well as a likely £1m investment in Lancashire’s children’s hubs.
However, the lion's share of the money will go on the repayment of a loan that the county council took out to fund its programme of converting street lamps from traditional bulbs to energy efficient LED lighting. The savings from paying off of that debt early will boost the authority’s budget by £1.8m from 2023/24.
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Meanwhile, £4m will go into reserves to contribute towards expected increases in the council’s energy costs.
Although he welcomed the budgetary position at the end of the last financial year - and the ability to “future proof” County Hall against bigger bills and make additional investments - the man in charge of the purse strings warned fellow cabinet members that the 12 months to come could be a bigger challenge.
“This is not expected to be a good year, I expect us to have a very tough year - obviously, everybody knows that inflation is creeping upwards,“ deputy county council leader Alan Vincent said at a cabinet meeting in June.
The latest report on the authority’s finances stresses continued uncertainty over future demand for local authority services - as well as the means to fund them.
It paints a particularly dizzying picture of the unpredictability of the call on adult social care - which accounts for around 45 percent of the county council budget - in the wake of the pandemic.
Residential and day care services for older people overspent against their budget by £3.8m during 2021/22, some of which was as a result of lower income generated by the authority’s own residential care homes - to the tune of £2.2m. As of last month, the facilities were accommodating 458 residents, when their collective capacity stands at just over 600.
However, in a sign of the complexity of shifts in what are often closely related costs, there was a saving of £1.2m for the authority because a proportion of those who may have gone into one of the county’s care homes would have been funded by the council itself, rather than out of those individuals’ own pockets.
Residential and day services have also been affected by Covid-related staff absence which has created additional staffing need.
Demand for nursing care has also failed to recover to pre-pandemic levels, leading to an underspend in that area of £4.1m. But there was an overspend on home care services of £5m, driven in part by difficulty in securing care packages from the county council’s usual ‘framework ‘ suppliers - meaning more expensive arrangements have had to be made with other providers.
County Cllr Vincent told the Local Democracy Reporting Service (LDRS) that it was difficult to predict the pressure on different types of social care against the current Covid backdrop.
“Demand has definitely been depressed throughout the pandemic. It was reasonable to expect that people would not want to go into care home settings [initially] but it’s been slightly more puzzling as to why that demand has not picked up again,” he said, musing on whether it may be the result of ongoing efforts across Lancashire to keep people in their own homes for longer and avoid the need for care.
Either way, the authority faces the added uncertainty of how it will be affected by forthcoming government reforms of the social care market.which would see councils obliged to increase the fees they pay to providers in order to keep care operators sustainable - the so-called "fair cost of care".
In addition, from October 2023, private fee payers could be permitted to ask their local authority to arrange their care fro them – and so access the lower rates to which councils have access. In that scenario, councils may have to cover the losses of care providers.
The government has set aside £378m to help local authorities bear the extra coast that they may face as a result of the proposed changes- but the County Councils Network has estimated that the figure is £854m short of what would actually be needed.
County Cllr Vincent said that it was important that County Hall had built up reserves to help absorb the multiple uncertainties that it was facing.
The county council's overall reserves stood at an improved £215m at the end of 2021/22. With commitments already made to use £37m of that money in the coming years, that leaves £178m available to support the authority's financial gap - or structural deficit - which is forecast to be £41.4m by 2024/25.
Further pressure on the council's coffers comes in the form of £15m of agreed savings from 2021/22 having been delayed and now needing to be delivered over the next 12 months - in addition to those that had already been identified for this year.
The authority is not expecting to receive any more Covid-related grants, like those which it has done during the pandemic to date - and councils also remain in the dark over the government‘s long-awaited fair funding review which will determine how resources are allocated to local authorities in the future.
County Cllr Vincent told the LDRS that its reserves meant that Lancashire County Council was better placed than most comparable authorities to deal with the seemingly unending level of uncertainty which local government is currently facing.