Kent County Council’s first-quarter budget monitoring report for 2026-27 revealed a forecast overspend of £21.4m, driven largely by rising costs in children’s looked-after placements and adult residential care.

Kent County Council was forecasting an overspend of £21.4m — 1.3% of its working budget of £1,655.6m — at the end of the first quarter of the 2026-27 financial year, according to a report considered by the Scrutiny Committee when it met on 21 October 2026.

Children’s services under greatest pressure

The largest single overspend was in the Children, Young People and Education (CYPE) directorate, which was projecting a £13.0m excess — a 3.0% overspend against its budget of £426.5m. Officers attributed the bulk of this to looked-after children care and support placements, which were running £19.8m over budget. That pressure was partially offset by underspends of £4.1m in looked-after children with disability placements and £2.8m in home-to-school and college transport.

The report noted that the cost of a residential placement had increased by 23% between March 2025 and March 2026, and that two of four planned new in-house residential homes were due to open later than budgeted, reducing anticipated savings by nearly £1m in 2026-27. A £2.5m contingency had been included to reflect the possibility of further reductions in foster carers and higher costs during the year, though officers noted some signs that the number of foster carers might be stabilising.

Adult social care also overspending

Adult Social Care and Health was projecting an overspend of £9.1m, representing 1.2% of its £786.7m budget. Officers said £4.4m of this related to savings that were no longer expected to be achieved in-year, with the remaining £4.7m attributed to other service pressures. The most significant pressure was in older people’s residential care services, which was running £6.4m over budget, driven by higher-than-budgeted average placement costs and reduced income, partly because fewer service users were paying the full cost of their care.

Schools’ deficit deepens

Separate from the main council budget, the Schools’ Delegated Budgets position showed an overspend of £109.9m. As a result, the council’s net Dedicated Schools Grant (DSG) deficit was forecast to rise from £130.5m to £238.5m. The report noted that this forecast did not include the potential impact of the High Needs Stability Grant announced in February 2026, which was dependent on the Department for Education approving a local SEND reform plan. The statutory override allowing councils to manage DSG deficits off the general fund runs until the end of the 2027-28 financial year.

Savings shortfall

The 2026-27 budget required the council to deliver savings and additional income of £230.4m in total, including £13.3m of undelivered savings carried forward from the previous year. As at Quarter 1, £82.5m — 90% of the monitored target of £91.7m — was expected to be delivered. Of the £9.2m not expected to be delivered in-year, £5.1m was planned for future years and £4.1m was described as no longer deliverable. Officers identified £3.4m of alternative savings, leaving a residual shortfall of £5.8m.

The report warned that any overspend must be funded from reserves, and that drawdowns from reserves weaken the council’s financial resilience. The council’s aim is to hold general reserves at a minimum of 5% of its net revenue budget.

The council had not published the minutes of the meeting at the time of writing, so the committee’s decision is not yet on the public record.

Sources

Top image: illustrative, computer-generated. Illustrative image generated by AI. This is not a photograph of any real council chamber or Kent County Council building.