LGA Corporate Peer Challenge: Lancashire County Council

A team of local government peers, led by the Local Government Association (LGA) delivered a Corporate Peer Challenge (CPC) of Lancashire County Council from 17 – 20 March 2026. This was the council’s third CPC, the council’s last CPC was delivered in October 2021. 

CPC is a well-established and respected improvement and assurance tool that provides robust, strategic and credible challenge and support to councils. Further details about the CPC process can be found in Appendix A.

Our peer team consisted of highly experienced and knowledgeable senior local government councillor and officer peers (see section four). We considered the five core areas covered by all CPCs: local priorities and outcomes, organisational and place leadership, governance and culture, financial planning and management and capacity for improvement. In addition to these core areas, the peer team were asked to place additional focus on progress in implementing the council’s Improvement Plan. The team were also asked to place additional focus on the council’s shift towards a place-based focus and in the context of LGR.

This report provides Lancashire County Council with feedback on the peer team’s findings. It provides the council with a set of a high-level recommendations alongside further recommendations under each of the CPC’s core areas. There is an agreed expectation that the council will publish both this report and a clear action plan to respond to all the recommendations highlighted. 

Lancashire County Council (Lancashire) serves a population of approximately 1.3 million residents and delivers services across a diverse mix of urban, rural and coastal communities. It operates within a multi-tiered governance landscape that includes 12 district councils, two unitary councils, over 200 town and parish councils, the Lancashire County Combined Authority (LCCA) and an Integrated Care System (ICS) which covers Lancashire more widely as well as South Cumbria.

Lancashire has strong and visible political and managerial leadership. Partners and staff described the leadership style of the leader and chief executive as collaborative, supportive and respectful. They are overseeing a rapid journey of improvement whilst managing significant change, including highly effective transition planning following the May 2025 elections, the formation of the new LCCA and the significant demands associated with proposed local government reorganisation (LGR). Staff who met with peers showed a strong sense of pride in working for Lancashire, with peers noting their passion, resilience and commitment.

Lancashire’s journey of improvement has accelerated over the past 12–18 months, catalysed by external inspection outcomes (see section 5.1), financial pressures, service priorities and LGR, alongside a drive by the leadership team to deliver improved services.

As detailed elsewhere in this report, it is not the function of a Corporate Peer Challenge (CPC) to provide an assessment or review of individual service areas. During this CPC, and in the spirit of openness and transparency, the council informed the peer team that they were supporting the Southport Public Inquiry and that the findings were due to be published via the Phase One report a few weeks after the team were onsite. In doing this, the council reiterated to the peer team its commitment to listening to the inquiry’s findings and responding to any recommendations made which related to the role of the council. As detailed throughout this report, the council has in place an 'Our Areas of Focus' plan and an aligned Improvement Plan. This work includes a focus on improving both children’s and adults social care, amongst other improvement priorities which the council can continue to build on and refine as necessary, with any new insights which may come to light, in the spirit of ongoing, continuous improvement.

To deliver the scale and ambition of change required, Lancashire has reshaped its corporate core into a more strategic, integrated and enabling function. The aim is to strengthen capacity and capability across organisational design, data, insight, digital, finance, governance and transformation delivery. Officers spoke positively about the impact of the strengthened corporate core, noting its growing role in supporting improvement and transformation across agreed priority programmes. Leaders in service areas value this support and said that corporate oversight of priorities for transformation was very much welcomed. Officers said that this is helping to strengthen a one team approach where front line services and enabling functions are working closer together in support of improvements for residents. Work is continuing to strengthen the corporate core in support of effective prioritisation, sustained improvement and organisational resilience.

Peers saw evidence of the council’s ambition to become more insight driven, with improved dashboards increasingly bringing together finance, workforce, demand and performance data to support planning, forecasting and risk management. There is recognition that this work is still developing with more to do to have trusted trajectories across all demand led services. Given the council’s strong improvement drive, a continued focus on enhancing the approach to data and analytics is essential. We recommend that the council maintains momentum in strengthening data quality, integrity and timeliness, particularly to enhance insight, demand analysis and trajectory planning. Consideration should be given to appointing a designated lead member for this area, to maintain focus and accountability.

Lancashire’s adult social care transformation and improvement programme is strengthening a more strategic, long‑term approach to improvement, overseen by an independently chaired Adult Improvement Board. Peers noted a commitment to developing a performance framework aligned to the improvement plans, with clear milestones to track delivery and impact and strengthen accountability. Building on this, the council should refresh the governance of the adult social care improvement programme to strengthen how it works alongside the corporate core in developing and embedding the new performance framework. This would help harness corporate capacity and skills in support of the improvement board, further strengthening organisational oversight on performance and the council’s ability to sustain improvement.

The council is in a reasonably strong financial position but faces significant financial risks which have the potential to detrimentally impact on this position (see section 5.4). Both the senior political and managerial leadership demonstrated strong self‑awareness of these risks which peers could see reflected across the council’s financial, strategic and business planning framework. These risks relate to ongoing Special Educational Needs and Disabilities (SEND) pressures, a Dedicated Schools Grant High Needs deficit, rising demand and complexity in children’s and adults’ social care, and negative value exposure within the council’s Very Long‑Term Investment (VLTI) portfolio.

Peers saw evidence of a strong and improving corporate grip on financial management. This includes the implementation of a phased efficiency review, the formation of a new Budget and Finance Scrutiny Committee, comprehensive and collaborative budget consultation processes and strengthened integrated quarterly reporting. Given the scale of the financial risks identified above, continued strong corporate oversight will be essential to ensure effective monitoring of the risks so that, if required, timely mitigating actions can be taken to protect the council’s financial position. The peer team recommends maintaining a laser like focus on delivering the savings already included within the 2026/27 budget and continuing to develop further effective mitigations against these growing financial pressures. This will require a continued drive to achieve efficiencies in ways of working to enable flexibility to invest in priorities. It will also require improved and timely demand and activity modelling to inform the financial reporting.

Some councillors shared concerns about instances of negative member behaviour, which included examples of an inappropriate use of social media. These issues have the potential to negatively impact staff morale, retention and the council’s wider reputation. Building on the work of the cross‑party Political Governance Working Group (for example its work on the new social media protocol, the protocol for filming during council meetings, and reviewing arrangements for public and member speaking and debate at meetings), the council should use this forum to agree how members work together to address conflict, grounded in the council’s organisational values.

Following Lancashire’s last CPC, the council has reviewed its overview and scrutiny arrangements to strengthen work planning, improve engagement between cabinet and scrutiny and raise the profile of scrutiny within decision-making. Further change was agreed last summer involving the establishment of the new Budget and Finance Scrutiny Committee, with a further commitment to review in the future, through the Political Governance Working Group, allowing time for the changes already made to embed. Peers recognise this positive work to date. However, we heard from councillors who believe that scrutiny is still not operating fully as intended (see 5.3). Twelve months into the new political administration, this is a timely opportunity to review how scrutiny is operating in practice.  

Senior leaders share an ambition to strengthen place‑based leadership and civic pride. The aim is to support more connected, proud, resilient and empowered communities, whilst also contributing to inclusive growth and wider community wellbeing. While still at an early stage, stakeholders were enthusiastic about the potential of this approach, recognising the significant opportunity to reinforce a coherent sense of connection and pride in Lancashire for residents, staff and businesses. They also recognised its importance in the context of LGR, particularly in sustaining Lancashire’s identity and heritage. The council should continue to build this emerging approach and clear political leadership through a designated portfolio holder would support this work.

The council is clearly proud of its partnership working, including its role in supporting the establishment of the LCCA and the development of the Lancashire 2050 strategic development framework and the Lancashire Growth Plan.

District council representatives and health partners talked positively about working with Lancashire, although some business representatives would welcome greater clarity on the respective roles of the county, two unitary councils and the combined authority in driving forward the Growth Plan. Voluntary sector representatives and town and parish councils also highlighted opportunities to further strengthen partnership working (see 5.2).

Lancashire has worked alongside neighbouring councils to build effective relationships and programme structures during the initial LGR planning phase.  Senior leaders have a clear awareness of the potential risks associated with aggregation and disaggregation, and the value of strong collaboration as plans develop. Building on this, the council should continue to ensure a closely watched, healthy balance between progressing agreed council priorities and service improvements, whilst seeking to ensure the opportunities presented by LGR are realised for residents.

The following are the peer team’s key recommendations which have been prioritised on the grounds of urgency and importance.

Peer challenges are conducted by experienced LGA councillor and officer peers. The composition of the peer team was shaped by the specific focus of the CPC, with the LGA selecting peers based on their relevant expertise as follows:

• Debbie Barnes, Chief Executive, Lincolnshire County Council
• Cllr Mark Arnull, Leader, West Northamptonshire Council
• Cllr David Fothergill, Somerset Council and LGA Regional Peer (South-West)
• Pam Duke, LGA Finance Improvement and Sustainability Adviser 
• Kevin McDaniel, Executive Director, Adult Services, Health and Communities and Deputy Chief Executive, Royal Borough of Windsor and Maidenhead Council 
• Kathryn Rees, Executive Director, Corporate/Support Services, Stockport Council
• Darcy Pilling, Senior Policy Advisor, MHCLG – Shadow Peer
• Cindy Lowthian, Senior Adviser, LGA – Peer Challenge Manager

This section sets out detailed feedback and additional recommendations across the five core areas of the CPC and the further areas of focus outlined in section one.

When developing the action plan (in response to the CPC’s findings), the council should consider both the key recommendations presented in section three and the additional recommendations set out below.

5.1 Local priorities and outcomes

Are the council’s priorities clear and informed by the local context?

The council plan 2025 - 2030 ‘Building a Better Lancashire’ clearly sets out the council’s vision, ambition and priorities. Peers saw how this plan, adopted in December 2024, was shaped by the local context, drawing on data analysis and extensive engagement with staff, residents and partners. Over a thousand residents completed a survey responding to the consultation.

Following the elections in May 2025, the new administration reaffirmed the council plan, recognising that its strategic ambitions remain relevant to the council’s long‑term improvement. Their priorities have instead been articulated through the ‘Our Areas of Focus’ plan (2025/26), which is aligned to the strategic ambitions within the council plan, underpinned by principles of financial responsibility, innovation and collaboration. Senior leaders indicated that the 2026/27 ‘Our Areas of Focus’ plan will be considered early in the new municipal year, reflecting a commitment to ensure this can also be informed by the recommendations from this CPC.

Priorities are being progressed alongside preparations for potential LGR. Peers heard from different stakeholders how the council is working positively and constructively alongside neighbouring councils through shared, jointly funded programme structures during the initial LGR planning phase and ahead of the ‘minded‑to’ decision. In discussions with senior leaders, there was a clear focus on embedding value for money in decision‑making, while maintaining service continuity and a long‑term focus on outcomes for residents. Leaders also demonstrated a strong awareness of the risks associated with aggregation and disaggregation, and the importance of sustained collaboration as plans continue to develop. As LGR progresses, the council should continue to ensure a healthy balance between progressing agreed council priorities and service improvements, whilst ensuring the opportunities presented by LGR are realised for residents. This will mean maintaining a strong focus on residents and communities being at the heart of the process, using LGR as a catalyst to improve and better join up services around people and communities.

Delivery against priorities and comparative performance

As referenced above, Lancashire is overseeing a rapid programme of improvement. This is built from three inter‑dependent programmes of work set out within the council’s Improvement Plan: Financial Sustainability; Service Improvement across key people‑based services, notably adult social care, SEND and children’s social care; and Organisational Effectiveness, including targeted investment to further strengthen the council’s corporate core.

Alongside a drive by the council’s senior leadership to deliver improved services for residents, the focus on SEND and adult social care improvement reflects external judgements, including a finding of widespread and systemic failings in the Lancashire SEND Area Partnership by Ofsted in December 2024 and a ‘Requires Improvement’ judgement for Adult Social Care by the Care Quality Commission in August 2025.

In children’s social care, the council was judged to be 'good' by Ofsted following the council's last inspection between November to December 2022. The council will need to maintain a strong focus on embedding this improvement to secure better outcomes for children and families, as well as preparing the organisation to demonstrate progress and readiness for future inspection.

Peers were mindful that the council is also required to respond to significant national reform across social care and health. Again, this represents a scale of change that goes beyond inspection findings alone and requires sustained leadership capacity, system‑wide partnership working and prioritisation. Maintaining a strong and sustained focus on delivering service improvements for residents and families, while actively managing and mitigating the financial risks associated with rising demand and costs in social care and SEND will be key.

Parent and carer forum representatives spoke positively about recent SEND investment and its impact on reducing waiting lists, while emphasising the importance of seeing this translate into sustained operational improvement. Peers heard a strong message about the need to maintain focus and consistency. We heard “maintain focus as we can’t afford to flip flop again”. The council will need to continue to shift the focus on SEND improvement from its current business as usual focus to stronger partner engagement in response to national SEND reforms and the wider system changes proposed in support of a more inclusive education system.

As outlined in section two, the adult social care improvement programme is taking a more strategic, long‑term approach, supported by the development of a new performance framework. There is an opportunity to refresh governance arrangements to strengthen alignment with the corporate core and support embedding of the new framework.

Peers considered LG Inform comparative benchmarking data against the council’s Chartered Institute of Public Finance and Accountancy’s (CIFPA) nearest neighbours. Lancashire compares either favourably or performs at around the average across a range of comparative indicators including number of physical visits to libraries per 1000 population (22/23), rate of birth for new enterprises per 10,000 population (2024), further education and skills achievements per 100,000 population of 19-64 year olds (2024/25) and those not in education, employment, education or training (NEETS) which is around average (2025). The council also compares favourably in relation to smoking prevalence in adults (2024).

Conversely, there are areas where performance compares less favourably including exclusion rates from state schools (2023/24), percentage achieving grades 9-5 in English and Maths (2024/25), the rate of ombudsman complaints per 100,000 people upheld (2024/25) and reception class children classified as obese (2022/25).

The council’s own internal performance reports offer further insights into how the council is performing against its agreed priorities. Peers noted that the quarter three performance report highlights improvement (since the last quarter) across all key themes within the council plan, with just seven key performance indicators (17.5 per cent) rated as red, with recovery plans in place. Positive progress is also being made against the council's improvement plan, which is reflected in the overall Green RAG rating for transformation programmes.

Is there an organisation-wide approach to continuous improvement?

Through the council’s strengthened corporate core (referenced earlier in this report), there has been considerable work to build the “golden thread” between the council plan, improvement plans, business plans and individual appraisals. Clear governance oversight of the council’s performance is provided through quarterly reporting to cabinet. There is also a clear transformation portfolio of key change programmes that have agreed objectives, milestones and aligned delivery capacity. This work is owned by a new Executive Leadership Team Delivery Board. Further work is underway to create a balanced scorecard. We recommend monitoring the reporting framework closely to ensure it remains flexible and not excessively burdensome.

Peers met with a highly skilled performance team who are helping to strengthen performance culture across the council. This includes action learning sets that give heads of service the opportunity to work through cross-cutting challenges together.

Overall, the performance framework was described in one focus group as there being a “clear direction of travel, clear business plan in place, more robust than previously.” Looking ahead, the council plans to strengthen the framework further through public‑facing performance, quality and experience measures. As part of this, the peer team recommends scrutiny (of performance) could be further strengthened through ensuring greater access to performance information to overview and scrutiny committees through agreed scorecards highlighting progress against key indicators.

We also saw evidence of the council’s drive to become more insight‑driven. Enhanced dashboards are increasingly bringing together finance, workforce, demand and performance information into a single view to support planning, forecasting and risk management. There is strong recognition that this work is still developing, not yet fully mature and how demand trajectories need to be more sophisticated. Given the council’s strong improvement drive, a continued focus on enhancing the approach to data and analytics is essential.

In addition to the key recommendations listed in section three of this report, we also recommend the council progress the following actions as detailed above:

• SEND - the council should continue to monitor and respond proactively to proposed national SEND reforms and wider system change, ensuring that local plans, governance and delivery arrangements remain aligned and resilient as the national policy landscape evolves.
• Performance reporting and scrutiny – review the frequency and type of performance reporting shared with scrutiny committees to further enhance transparency, challenge and assurance.

5.2 Organisational and place leadership

Does the council provide effective local leadership?

The senior political and officer leadership are working well together to deliver the council’s agreed priorities. Working relationships between the cabinet and Executive Leadership Team (ELT) were described as constructive and well-aligned. The ELT is widely viewed as supportive and respectful. We heard this from a range of internal staff and other external forums.

The formation of the new administration in May 2025 involved the election of 64 new councillors and a new official opposition. The leadership oversaw a well‑managed transition. This involved a comprehensive member induction plan (see section 5.3). and the adoption of the ‘Our Areas of Focus’ plan to articulate the administration’s priorities for 2025/26 (aligned to the council plan). The council managed this transition relatively smoothly and should continue to share learning with the wider local government sector on managing change of control.

Councillors across the different political groupings are committed to cross-party working, facilitated by the Political Governance Working Group. As referenced in more detail in section 5.3 of this report, the council will need to continue to work through this group to enable members to collectively lead in line with the council's organisational values.

While there is clear commitment and goodwill, peers heard some variability in councillors’ understanding of their responsibilities as corporate parents and how these translate into consistent practice. Strengthening councillor engagement will help ensure clearer ownership, stronger advocacy for care leavers and care‑experienced young people, and more consistent challenge and oversight across the council.

How does the council lead its place? Are there good relationships with partners and local communities?

Lancashire has been an active partner supporting the creation of the (non-mayoral) LCCA which had its inaugural meeting in March 2025. The Lancashire Growth Plan sets out five strategic economic sectors whose strengths can position Lancashire as a globally recognised, highly competitive, and sustainable region celebrated for its quality of life, connectivity, and opportunity.

The council’s Place Directorate has recently been established which brings together the key community, place and economic development functions under a single leadership. Peers learned of many strong examples of where Lancashire is working proactively with partners to deliver a portfolio of major economic development projects. These projects cover major economic development projects, transport, energy and digital infrastructure, town and city regeneration and enterprise zones.

This ambitious agenda is valued by partners. The council should continue to harness the opportunities arising from the LCCA to help enable the county to fully and readily embrace the next evolution of the LCCA.

Through discussions with some partners, there is some confusion between the respective roles of the county council, unitary councils’ and the combined authority as a whole in relation to driving delivery of the growth plan. Some business representatives also expressed frustration with the lack of pace and progress with the LCCA. The peer team acknowledges that the LCCA is still relatively early in its development. In this context, and in terms of both capacity and clarity of purpose, there are opportunities build greater clarity on the respective roles of key partners and the combined authority in driving forward the economic growth plan.

Peers also explored wider partnership relationships which we found to be variable. Relationships with district councils and health partners are positive, with peers hearing encouraging examples of more strategic collaboration, including with universities. Collaborative working with the districts and unitaries was described as particularly positive in relation to LGR planning.

Voluntary and community representatives highlighted many examples of effective joint working between commissioners and service providers and welcomed the council’s work on civic pride, recognising the sector’s strong potential role in supporting delivery. However, we heard frustrations about the consistency and effectiveness of engagement at a strategic level.

There are opportunities to strengthen collaboration and co‑production with the Voluntary, Community, Faith and Social Enterprise (VCFSE) sector at the strategic level, including improving clarity around the allocation of grant funding and associated processes. As referenced above, this would support delivery of the civic pride agenda by enabling clearer, more coordinated involvement of this sector. To strengthen strategic relationships, the council should consider how to build on existing governance arrangements, including those already in place through the alliance facilitated by the Lancashire and South Cumbria Integrated Care Board or through a wider Lancashire partnership alongside the Lancashire Business Board. Consideration of how faith and interfaith voices are engaged within these arrangements should also be considered.

We also heard of opportunities to strengthen relationships with town and parish councils through the Lancashire Association of Local Councils (LALC), which could play an increasingly important role in supporting place‑based leadership, particularly as further local government reorganisation and devolution progress where the town and parish council sector will play an important role.

Peers were pleased to meet with representatives from the parent carer forum and a focus group of young people, including care leavers. Both groups are energised by the investment in capacity to tackle the SEND priority although the parent carer forum note how it is too early “for families on the ground to feel a difference”.

Care leavers talked about the range of ways they are supported by the council, including training, volunteering and opportunities to get involved in issues that matter. They also gave examples of where they had been involved in appointments of key positions. We heard “I am proud, representing where I come from”. Care leavers particularly valued the opportunity to meet with heads of service at an event called “Dinner with Dialogue” where they heard a range of commitments and they would welcome feedback on how these have been progressed. They also shared examples of when peers had been given employment and work experience opportunities which were having a big impact. They would welcome this work to be expanded. It is important that councillors continue to engage with corporate parenting activities so that the positive experience described to Peers is common across Lancashire.

Place Based Focus

Senior leaders have set out an ambition to grow place leadership and civic pride and to “be more visible, responsive and active in each community, serving every corner of the county and restoring civic pride”. To help drive this forward, the Place Directorate has been established which now incorporates a new communities function.

While still at an early stage, peers heard from a range of stakeholders who are enthusiastic for the opportunities this presents. Throughout the CPC, staff and other stakeholders talked keenly about existing projects aimed at building community engagement, co-production, community cohesion, system leadership and service integration around localities, including the importance of culture, heritage and identity. There are also many innovative and impressive examples and initiatives, outlined in the council’s position statement, of this in action.

Staff who met with peers demonstrated a commitment and passion for growing place-based leadership/civic pride, describing this as a significant opportunity to work alongside residents, staff, businesses and VCFSE groups and the potential for this to provide a unique and unifying narrative for Lancashire. The peer team can see that it has the potential to ensure people and place are at the heart of the council’s and partner’s work, helping Lancashire as a place to stand apart and particularly as the county progresses LGR.

As referenced in section two, this embryonic approach is a unifying opportunity, both internally and externally with partners, for supporting service improvements and celebrating Lancashire. The council should keep and grow this passion and unifying nature, stepping into the convening role for Lancashire, bringing together key partners to develop a shared vision and to build and learn from existing approaches, without a need to over engineer the approach. To maximise focus, visibility and leadership in this area, consider establishing a dedicated cabinet member portfolio for place to champion this agenda and drive sustained progress.

The council should also consider the following further opportunities:

• Securing internal and partnership leadership through appropriate governance. There is a need for the council to have an agreed approach to engage and collaborate with partners around this vision which will help to ensure it is understood and everyone feels part of the ambition. The approach adopted needs to be flexible and create energy so creativity isn’t stifled.
• Ensuring clear language and articulation of place leadership such as “Pride in Lancashire” that could be embedded in strategic plans and give the council plan a more unique narrative.
• Using “test and learn” approaches with partners to wrap public services around people and families with a relentless focus on prevention
• Launching a communication and engagement campaign that celebrates the work of the council and local community.
• Radically strengthening relationship with the VCFSE and town and parish councils (including through LALC) with deeper engagement, coproduction and clearer investment in grassroots.
• Using heritage and culture as a catalyst for strengthening civic pride and identity. This could include consideration of a future ‘Lancashire year of culture’.
• An internal culture change programme to further embed the “community first” approach.
• Understanding communities – continuing to harness local insight and intelligence to collaborate further

In addition to the key recommendations made in section three of this report, we also recommend the council progress the following actions:

• Transition planning - the council managed the transition to the new administration relatively smoothly. Lancashire should continue to share learning from this experience with the wider local government sector, supporting sector‑led improvement and peer learning.
• Corporate parenting - strengthen councillor engagement in the council’s corporate parenting role to help grow the understanding of responsibilities and how these translate into practice. This will support clearer ownership, stronger advocacy for care leavers and care-experienced young people and more effective challenge and oversight across the council.
• LCCA - continue to play a strong leadership role in the evolution of the LCCA and harness the opportunities arising from devolution. Work with partners to develop and maintain a clear, shared understanding of the respective roles of the county council, unitary councils and the combined authority in delivering the economic growth plan, helping to set clear expectations and support confident, joined-up delivery.
• Partnership working - further strengthen strategic engagement with the VCFSE sector and with town and parish councils.

5.3 Governance and culture

Are there clear and robust governance arrangements?

As referenced in section 5.2, the council managed the transition to the new administration effectively. The comprehensive councillor induction offer is overseen by a cross-party steering group. The offer spans committee skills and experience, essential roles and the council’s core governance framework. It included a councillor buddying offer (an offer to match new councillors with experienced officers).

A feedback survey, carried out in November 2025, had a 58 per cent response rate, most of whom were from newly elected councillors. It is positive to see how the councillor support steering group is using this feedback to shape the on-going  member development programme.

Peers met with cabinet members who described how the cabinet works well together and meets weekly, in person, outside of formal meetings. These sessions include regular ‘deep dive’ discussions to support cross portfolio working. Building on this, peers were encouraged to hear of the commitment to further develop pre‑cabinet briefings, bringing cabinet members together ahead of formal cabinet to discuss papers in advance and further strengthen cross‑portfolio working.

The council’s scheme of delegation to officers is clear and well understood, with financial limits of expenditure consistently applied. A new scheme of delegation database provides added clarity around decision‑making authority. We understand that officer delegation operates within a framework of consultation with the relevant cabinet member, with all political decision making reserved for collective cabinet meetings. Building on this, the council’s commitment to an annual review of its Key Decision threshold to ensure alignment with comparator organisations is positive. The potential to introduce delegated portfolio holder decision making could be explored. This work should help further strengthen political oversight.

There are strong examples of inclusive political governance, including the establishment of the Budget and Finance Scrutiny Committee. Opposition members are represented at cabinet meetings, and a cross‑party Political Governance Working Group meets regularly, providing a forum for joint discussion and collaboration and reflecting a clear commitment to openness and accountability.

A report to the council’s audit committee in January 2026 shows how, compared to previous years, Lancashire has seen an increase in the number of councillor complaints under the code of conduct. Typically, Lancashire received fewer than twenty complaints in a year. In 2025, 61 complaints were received. The report provides an overview of how complaints were resolved, showing that none required full investigation or referral to the conduct committee. Peers heard concerns from some councillors regarding examples of negative member behaviours involving the use of social media. Building on the work of the Political Governance Working Group, the council should continue to work through this forum to agree how members work together to address conflict, grounded in the council’s organisational values.

A councillor enquiry system is in place to support councillors in raising queries. Feedback from some councillors highlighted concerns about responsiveness and the quality of responses, alongside a desire for more direct communication with officers. This is also reflected in the councillor induction survey referenced above. The council should review the member enquiry system following its post‑election implementation.

New arrangements, agreed in December 2025, have sought to streamline the officer governance structure, with the Executive Leadership Team now supported by two strategic officer boards: the Delivery Board (oversees the Improvement Plan including transformation and change) and the Compliance and Assurance Board (oversees the council’s statutory responsibilities). Other boards have been dis-established to reduce duplication. New terms of reference have been introduced to provide greater clarity on the remit and responsibilities across officer boards and programme governance. Whilst still early days, we heard positive feedback on the new arrangements. In particular, how the Compliance and Assurance Board is supporting strong working relationships between the council’s statutory officers.

Peers saw evidence of a culture of strong governance, transparency, assurance and risk management. The latest external auditor’s annual report (March 2025) identifies no significant value for money weaknesses, but did include a small number of improvement recommendations. Similarly, the latest internal audit annual report (July 2025) gave moderate assurance on the adequacy of the design and effectiveness of the council’s frameworks for governance, risk management and internal control.

A new Risk Management Strategy (October 2025) sets out the council’s approach to managing risk, with the corporate risk and opportunity register overseen by the Compliance and Assurance Board and reported quarterly to the Audit, Risk and Governance Committee. The same board oversees development of the Annual Governance Statement and monitors delivery of actions, with named leads and target dates. Again, the AGS is shared with the Audit, Risk and Governance Committee.

We met with internal and external audit representatives and councillors. Overall, we heard how the Audit, Risk and Governance committee works effectively and includes two independent members. This enhances its role in providing independent assurance for the council.

Governance of the council’s wholly owned/partially owned companies is exercised through the Company Member Cabinet Committee, which takes executive decisions on shareholder matters and oversees strategic relationships with companies, ensuring that the council’s responsibilities are appropriately discharged. The peer team believe a review of the appetite, purpose and value for money of the council’s companies would be timely, as part of the wider capital strategy and in advance of Local Government Reorganisation (LGR).

Is there a culture of challenge and scrutiny?

The council strengthened its overview and scrutiny arrangements following their last CPC in 2021, with further changes agreed last year through the creation of the Budget and Finance Scrutiny Committee. A review of scrutiny's effectiveness, including how the changes already made are working, was commissioned by the Political Governance Working Group in January 2026. Peers recognise this positive work to date. However, we heard from councillors who believe that overview and scrutiny is still not operating fully as intended. Issues highlighted included the co-ordination of work programmes, the timing of some scrutiny discussions in relation to decision‑making and the approach to the allocation of chairing arrangements. Peers consider the most recent review commissioned by the Political Governance Working Group to be timely, enabling reflection on how past changes are operating in practice and supporting constructive member engagement on the future direction of scrutiny.

This will support councillors to build confidence in their scrutiny role, and ensure scrutiny is fit for purpose in supporting effective decision‑making, accountability and transparency as the council continues its improvement journey.

Staff who met with the peer team fed back positively about a culture of collaboration, respect and support with staff feeling engaged. Staff who met with the peer team said they are proud to work for the council and that it is a happy place to work. We heard “people in Lancashire County Council have a passion to improve people’s lives” and “we are a council passionate about improvement”

The most recent staff survey (2025) shows most respondents agree that they feel part of the council, are treated fairly and feel accepted and able to be themselves at work (scores for this remained the same as last year). However, there are more negative responses than positive ones when staff were asked if they recommend the council as a place to work. We recognise that this is not unexpected during periods of significant change. The council is responding to this feedback, including strengthened approaches to staff engagement (see section 5.5) and this will be essential as LGR progresses.

In addition to the key recommendations made in section three of this report, we also recommend the council progress the following actions:

• Scheme of delegation - building on recent progress/work in support of transparent delegated decision-making, the council should maintain its commitment to review its Key Decision threshold for officers to ensure alignment with comparator organisations. As part of this review, the council could explore delegated decision‑making for individual cabinet members. The aim should be to further strengthen political oversight and clarity of decision-making.
• Member enquiry system - the council should review the councillor enquiry system following its post‑election implementation, with a focus on improving responsiveness, the quality of responses, and opportunities for more direct communication between councillors and officers.
• Wholly owned/partially owned companies – a review of the appetite, purpose and value for money of the council’s wholly owned/partially owned companies would be timely, as part of the wider capital strategy and in advance of Local Government Reorganisation (LGR).

5.4 Financial planning and management

Does the council have a clear understanding of its financial position? 

Lancashire is in a reasonably strong financial position but still faces significant financial risks that have the potential to detrimentally impact this position (referenced below). It is important that the council maintains a laser‑like focus on further developing and delivering the required mitigations relevant to these risks.

The reasonably strong financial position is shown through a balanced three-year medium-term financial plan (MTFP) for 2026/27 and 2027/28 which leads up to vesting day following LGR (when there is a projected deficit of £17.3m in 2028/29). The latest quarter three forecast revenue outturn position (for 2025/26) shows good progress in containing a projected revenue overspend which is largely driven by pressures in adults and children’s social care. This projected overspend stands at £6.1m, a reduction of £4.2m from quarter two and £21.9m from quarter one.

LG Inform data (the LGA’s benchmarking tool for local government), shows the increase in net spend between 2024/25 and 2025/26 was below the average amongst statistical neighbours. Whilst the proportion of spend on high demand social care for both adults and children are above the average, it has fluctuated. General fund balances as a proportion of net spend is around the average. 

CIPFA’s 2024/25 resilience index shows how Lancashire holds a higher level of reserves than its nearest neighbours but has been drawing them down faster than others in recent years. However, for 2025/26 the council has relied on a small use of reserves of £1.544m to balance the initial budget. It has substantial unallocated reserves to support the potential overspend for 2025/26 (reported as £6.2m at Q3) but through the Executive Leadership team a suite of mitigations have been implemented so it is expected that a minimal drawdown of unallocated reserves may be required at year end.

The Medium Term Financial Plan (MTFP) shows no projected use of unallocated (non-earmarked) reserves, with current levels of general fund earmarked reserve at £66.3m which is slightly above the agreed MTFP principle of holding five per cent of net revenue expenditure in the general fund reserve. This is an improvement from the start of the 2024/25 year when these balances were 2.1 per cent  of net expenditure. By the end of 2024/25 the general fund balances had significantly increased to be closer to the 5 per cent target.

Does the council have a strategy and plan to address its financial challenges?

While the council had previously built up a reasonable level of reserves through their successful treasury management strategy, some very long-term investment decisions taken over recent years (from 2021-2023), through the Very Long-Term Investment portfolio, have the potential to more than reverse these gains. The VLTI involved a £519m investment in government and commercial bonds with maturities of up to 92 years. Although these investments generate annual income of over £10m, their market value has fallen significantly, and a number of short-term loans have been required to maintain the working capital position.

Recognising that there is a potential material loss on disposal if the investments were to be sold a number of steps are being taken to manage the position. A Working Capital Enhancement Reserve (WCER) has been established as part of the 2026/27 budget process. This will be built up, over the long term, to try and manage the impact of the previous decisions and reduce the net cost of short-term loans currently needed to maintain effective levels of working capital. The 2026-2029 MTFP clearly states that contributions of up to £57.5m should be made over the next three financial years to this reserve. It also shows that, where possible, this should be increased further through other actions including disposal of surplus property and any windfall receipts. Planned contributions should lead to a balance of £115.6m by 31st March 2029, which will grow if capital receipts and other windfalls are added.

In addition, the council is working with external treasury advisors to develop a framework for disposing of part or all the VLTI portfolio as and when market conditions support that decision.

Peers saw how the council has been transparent within its financial planning about the scale of this risk and the need for a clear strategy to manage it. Peers welcomed this transparency which has also included an internal audit review focused on the transparency, accountability and governance of the original investment decisions.  The subsequent report, published in January 2026, identifies several actions to strengthen transparency, accountability and effectiveness of member oversight which are being implemented.

Given the significance of the potential material losses, it is recommended that regular and transparent monitoring of the value of the risk, how the mitigations are progressing - including value of the WCER - and any asset disposals used to boost the WCER , should be reported six monthly to audit committee.

Like many upper‑tier councils, Lancashire also faces significant demand‑led cost pressures, particularly from SEND, including a growing Dedicated Schools Grant (DSG) high needs deficit, with an overspend forecast to exceed £75.9m in 2026/27 and a total projected deficit of £171.4m.

While leaders welcomed the government’s recent commitment (subject to conditions) to fund 90 per cent of 2025/26 DSG high needs deficits for councils, it is positive that they remain alert to the ongoing risks associated with the unfunded element, risks associated with the potential removal of the statutory override in future years, and future SEND pressures. The council should continue to continue its focus on SEND and on delivering improvements through reforms. In addition, again like many upper tier councils, the council faces wider financial risks from rising demand and costs in adult social care and children’s social care and home to school transport pressures. These risks are driven by an ageing population, increasing complexity of need, placement costs, and the interaction with SEND pressures.

Peers could see a clear alignment between the MTFP and 2026/27 budget, the council plan, the ‘Our Areas of Focus’ plan and Improvement Plan. This includes investment to address the risks highlighted alongside wider transformation, improvement and resilience activity.

As part of the 2026/27 budget, a 3.8 per cent council tax increase was agreed, below the referendum threshold. Budget papers say this reflects Lancashire’s commitment to limit the impact of council tax increases on local communities. The papers outline the arrangements in place to ensure this can be sustained which is important in the context of the ongoing sector‑wide financial pressures and risks outlined above.

The peer team saw a planned and phased approach to efficiency reviews as part of the council’s response to financial pressures. Phase one has focused on benchmarking and comparative analysis of directorate revenue budgets, alongside cross‑cutting work on contracts, assets and digital enhancements. This has led to the identification of around £22m (over the next three years) of largely recurring savings. Savings proposals from this phase have been built into the 2026/27 budget, with £6.6m expected to be delivered in that year. Together with previously agreed measures, this results in planned savings of £62m in 2026/27, equivalent to around five per cent of the council’s net budget.

We heard how phase two of the efficiency review aims to build on this work and increase savings in future years, and it is positive that work is already progressing on this phase. This includes the creation of a new corporate landlord function, review of the council’s property portfolio, increase the use of digitalisation and AI and proposals to refocus the approach to procurement. The council should maintain a strong focus on identifying further costed savings in response to the demand‑led risks outlined above. This is likely to require difficult decisions, but will be necessary to enable reinvestment in improvement activity and priority areas of focus.

Peers saw evidence of improved grip and corporate accountability for budget setting and monitoring. The council’s budget setting process for 2026/27 was collaborative and comprehensive. The council expanded the consultation process for the 2026/27 budget, with revised web content, budget simulations and engagement with stakeholders. This was a recommendation of external audit, given response rates to previous budget consultations. It also included work through the new Budget and Finance Scrutiny Committee to strengthen scrutiny of the 2026/27 budget proposals. We found senior directors understand and own their budgets including the agreed savings required, with corporate tracking of delivery. It is due to the collaborative nature of the budget process that this ownership has been achieved.

The council has implemented a new Enterprise Resource Planning (ERP) finance system to support core financial processes, including budget management and forecasting. Officers recognised that further work is required to realise its full benefits, particularly in enabling budget holders to access timely financial information. Peers therefore recommend that the council continues to develop use of the ERP system to improve the timeliness of performance, risk and financial data, including demand trajectories, to support effective budget monitoring and timely in‑year mitigations. Having timely service data to support the financial data will be required if accurate forecasting and modelling of pressures is to be improved. This presents an opportunity to strengthen business partnering through improved automated reporting from systems to enable more focus on strategic advice and support.

The council has agreed a capital programme of £292m in 2026/27, funded largely by government grants, prudential borrowing and other contributions. The Capital Strategy 2026/31 was included as part of the finance papers for budget council, totalling over £1 billion over the next 5 years. This is an ambitious capital programme which will require robust monitoring of project delivery especially in respect of the time restricted requirements of some grants and the cost risks that sit with the council linked to the funding requirements of the schemes. Alongside the revenue budget, it is recommended that a laser focus on monitoring capital expenditure and impact is maintained to ensure that business case expectations are delivered. The MTFP 2026-2029 sets out guiding principles for the capital programme designed to continue to strengthen the decision making around inclusion of new and additional schemes - compliance with those principles should be monitored and maintained.

One final area of note is the investment that the council has made into the financial investigations team which now includes fraud specialists and accredited financial investigators. The team acts both as a deterrent but also shows a proactive approach to preventing, identifying and investigating fraud with six-monthly reports shared with the audit committee. This is an exemplary approach that could be shared with others.

In addition to the key recommendations made in section three of this report, we also recommend the council progress the following actions:

• Efficiency review – deliver phase two of the efficiency review to secure further costed savings, mitigate demand‑driven financial risks and support delivery of agreed priorities.
• ERP system - further develop and harness the ERP system to improve the timeliness of financial, performance, risk and demand data to support budget monitoring and timely in year mitigations. Strengthen the business partnering model through improved automated reporting.
• VLTI - given the significance of the potential material losses, ensure six‑monthly reporting to the Audit, Risk and Governance Committee on the value of the risk, the progress of mitigations (including the WCER), and any actions taken under the disposals framework.

5.5 Capacity for improvement

Is the organisation able to bring about the improvements it needs, including delivering on locally identified priorities?

The council has strengthened its capacity for improvement through the reshaped corporate core which brings together key corporate functions covering financial planning, procurement, business intelligence, corporate strategy and policy, digital, transformation, corporate landlord function and people services.

Senior officers and staff spoke positively about the difference this is making in supporting improvement through digital, data, workforce and financial planning activity. There was a particular recognition of the benefits of the increased shift towards business‑partnering models to support change, particularly across digital, finance and people services. This has helped to create of culture of collaboration and support across council. Peers heard how the council is enhancing the business partnering model to include all corporate functions. Officers described the council’s approach to improvement as comprehensive, with growing cross‑council leadership and clear focus on service improvements. Both the senior political and managerial leadership are viewed as supporting high change and high challenge against agreed priorities.

Through discussions with the peer team, there is recognition there is more to do to continue to strengthen the corporate core to build capacity behind the agreed priorities. Peers heard “we know we have more to do”. This includes continuing to ensure capacity for transformation, further strengthening the approach to data and analytics, growing the use of artificial intelligence (AI) and preparing for future LGR.

The people services function, sitting within corporate core, is helping to strengthen approaches to recruitment, retention, training and development. Recent leadership approaches have clearly had significant positive impact on recruitment, retention, organisational and leadership development which is valued by staff and managers.   The People Strategy (2023/28) sets out six strategic outcomes to ensure a creative, high performing valued/supported, productive, inclusive and resilient workforce. Officers are particularly proud of the drive to recruit social workers, occupational therapists and support officers which has contributed to a reduction in agency spend as well as the leadership development programmes which are valued.

The ‘Leading Lancashire Framework’, is the leadership development framework for managers, heads of service and senior leaders. It is designed to strengthen a consistent approach to leadership expectations and development, supported by regular 360° feedback to contribute to a more reflective and learning‑focused leadership culture. Peers believe this framework provides a strong platform from which the council can embed its emphasis on civic pride and place‑based leadership.

Aligned to the People Strategy, a Fairness, Equality and Inclusion Workforce Framework was adopted in October 2025. This aims to set out a structured approach to promoting fairness and inclusion through equitable pay and progression, fair recruitment, stronger staff voice, leadership accountability, clear metrics and practical tools to support consistent practice.

The council has a range of employee networks and staff voice arrangements in place to support engagement and equality across the organisation, including four established equality focused networks, a staff savings suggestion scheme and a ‘Change Influencer Network’. Peers were told that the latter exists to capture the experience of change at the council, providing leadership with a real-time pulse on employee sentiment. The role of Change Influencers is to help the organisation understand how change feels for employees and act as organisational listeners within their teams and services to gather feedback, share insights, and ensure staff voices shape decision-making. A new Staff Panel has also been established (its first meeting was in December 2025) to provide a platform for meaningful dialogue between senior leadership and operational staff from across the council. Staff spoke positively about these approaches in helping to create direct and meaningful dialogue between senior leadership and operational colleagues.

Staff shared impressive examples of how their directorates bring colleagues together to consult, share learning and celebrate success. Peers noted that there may be an opportunity to build on this by sharing practice across directorates. Peers also heard that the equality networks (referenced above) would benefit from clearer senior leadership sponsorship and greater consistency in training and support across the council.

The council’s Improvement Plan outlines the key programmes that will drive transformation in support of agreed priorities. This builds on the existing transformation portfolio, which was re-shaped in 2024, as well as the outcomes from the efficiency review (referenced in section 5.4). Transformation programmes span key priority areas including adult social care, children’s social care and SEND, home to school transport, highways, waste, digital, contracts and assets. Governance and transparency arrangements have been reviewed through the formation of the Delivery Board and Compliance and Assurance Board (referenced in 5.3). Building on this, section two of this report recommends that the council should now refresh the governance of the adult social care improvement programme to strengthen how it works alongside the corporate core in developing the new performance framework. 

A redesign of digital services, in support of organisational priorities, has been completed. Work is progressing to improve data maturity to support data analysis, predictive analytics, forecasting and insights. This should continue to ensure a greater consistency of the use of dashboards across services and automating data wherever possible. There is also the opportunity to develop work on predictive analytics to target services around areas of highest demand. As referenced earlier, this work may benefit from a dedicated member champion to help drive improvement.

Building on this, the council is developing approaches to the use of AI enabled transformation which is impressive. We heard positive examples of where services have adopted innovative uses of AI to help drive efficiencies, particularly within social care and highways. In social care, peers heard how the growing use of AI is creating more opportunities for staff to spend more time with children, adults and families by reducing time spent on report writing.

The council is clearly growing and testing innovative solutions which is being embraced by service areas and with an understanding of the ethical considerations which is important. This work is helping to shape and inform a clearer programme of AI‑enabled transformation. Leaders appreciate the cultural shift required to deliver this change, articulated by one leader as “We have to help staff to edit reports (through AI) instead of writing reports”. It will be important to ensure the council continues to review their risk appetite in relation to the use of AI, learn from these approaches, share learning across directorates and balance innovation with risk management and ethical considerations as this work progresses.

As referenced throughout this report, Lancashire is working proactively with partners across the county to prepare for LGR. This includes joint work to establish shared and jointly funded programme governance and service baselining. Internally, this is being supported through dedicated provision within the MTFP, on-going communications with staff and councillors, and a clear focus on ensuring the council can transition effectively while continuing to deliver improvement.

As this work progresses, peers emphasised the importance of continuing to support both the workforce and wider councillors in ensuring staff they feel informed, engaged and equipped to manage change, ensuring it does not detract from the delivery of agreed priorities and improvements. It is also important to recognise the importance of continued working with both the voluntary, community and faith sector and parish and town councils. As referenced in section 5.2, the council should continue to drive place-based working/civic pride as unifying platform ahead of LGR.

In addition to the key recommendations made in section three of this report, we also recommend the council progress the following actions:

• Staff networks – further strengthen the impact of staff equality networks by establishing clearly identified senior officer sponsors for each network.
• Digital transformation and Artificial Intelligence (AI)  - develop AI‑enabled transformation in a coordinated way, ensuring innovation is balanced with robust risk management, ethical oversight and organisational learning.
• LGR - ensure councillors and the workforce are actively supported and engaged throughout LGR, with clear communication and leadership that enables change without detracting from agreed improvement priorities.

The senior political and managerial leadership of the council should review and reflect on the findings and recommendations from this CPC.

To promote the principle of transparency, it is a requirement of the CPC that the final report is published in-full within three months of the review being completed. In this instance, this requires the report to be published no later than 20 June 2026. 

There is a requirement for Lancashire County Council to develop and publish an action plan within five-months of the peer team being onsite, no later than 20 August 2026. This action plan should provide clarity on the activity, milestones, and timelines that the council will work to in responding to the team’s findings. 

The action plan will also be central to the peer team’s re-engagement with Lancashire County Council through a progress review which is due to be completed and published by 20 March 2027.

The Ministry for Housing, Communities and Local Government (MHCLG) have published the Best Value Standards for authorities. These standards expect every council to engage in a CPC or Finance Peer Challenge at least every five-years. 

Dan Archer is LGA’s regional lead for the North West and is the council’s main contact with the Local Government Association. As outlined above, Dan Archer is available to discuss any further support you require and can be contacted via email as follows: [email protected] 

Further information, support, and resources on LGR/Devolution, can be found on the LGA’s devolution and LGR Hub website.

CPC is a valued improvement and assurance tool that is delivered by the sector for the sector. It involves a team of senior local government councillors and officer peers undertaking a comprehensive review of key information and spending three days at the council to provide robust, strategic, and credible challenge and support.

CPC forms a key part of the improvement and assurance framework for local government. It is underpinned by the principles of Sector-led Improvement (SLI) put in place by councils and the LGA to support continuous improvement and assurance across the sector. These principles state that councils are responsible for their own performance; accountable locally, not nationally; share a collective responsibility for the performance of the sector; and rely on the LGA to provide the tools to support them. CPC is also key to councils in meeting their Best Value duty. UK Government expect all councils to have a CPC at least every five years. 

Scope and focus

The peer team considered the following five areas which form the core components of all CPCs. These are critical to councils’ performance and improvement.

1. Local priorities and outcomes - are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities? Is there an organisational-wide approach to continuous improvement, with frequent monitoring, reporting on and updating of performance and improvement plans?
2. Organisational and place leadership - does the council provide effective local leadership? Are there good relationships with partner organisations and local communities?
3. Governance and culture - Are there clear and robust governance arrangements? Is there a culture of challenge and scrutiny?
4. Financial planning and management - Does the council have a grip on its current financial position? Does the council have a strategy and a plan to address its financial challenges? What is the relative financial resilience of the council?
5. Capacity for improvement - Is the organisation able to bring about the improvements it needs, including delivering on locally identified priorities? Does the council have the capacity to improve?

As part of the five core areas outlined above, every CPC has a strong focus on financial sustainability, performance, governance, and assurance.

In addition to these core areas, the peer team were asked to place additional focus on implementation of the council’s Improvement Plan. The team were also asked to place additional focus on the council’s shift towards a place-based focus and in the context of LGR.

The peer challenge process

Peer challenges are designed to support improvement, not inspection. They are not intended to provide a detailed or technical assessment of plans and proposals. Instead, the peer team uses its experience and knowledge of local government to reflect on the information shared with them, the things they observe, and the material they review.

To prepare, the peer team looks at a range of documents and information to understand the council and the challenges it is facing. This includes a position statement prepared by the council before the visit, which sets out the local context and highlights areas for the team to focus on. The preparation also involves reviewing an LGA Finance briefing (based on public reports from the council’s website) and an LGA performance report that shows benchmarking data across a range of measures. The performance report is produced using the LGA’s local area benchmarking tool, LG Inform.

The peer team then spends three or four days at the council. During this time, they gather evidence, information, and views by meeting with council staff, councillors, and external stakeholders. This helps them build a rounded picture of the council’s strengths and areas for improvement.