The way Staffordshire County Council achieved a £6.7m underspend has been questioned after reserves were used to help two service areas break even.

The financial outturn for 2025/26 was described as an "excellent achievement" in a report presented to the Reform UK cabinet.

The party took control of the authority in May 2025 and national leader Nigel Farage said Reform would look to make major savings at the county council. He spoke about Reform UK's plans to send a team of software engineers, data analysts and forensic auditors to comb through the county council's finances in order to identify savings when he visited Stafford's County Buildings the following month.

Speaking shortly after his election to the county council, Sean Bagguley – now cabinet member for finance and resources – said: "I'm a great fan of going through the council and auditing them – we need an audit."

At the latest Corporate Overview and Scrutiny Committee meeting, which considered the final financial outturn for 2025/25, Cllr Bagguley said: "We delivered a £753m budget with a small surplus in the face of rising costs for fuel, materials, wages and a very stubborn CPI (consumer price index).

"This delivered an outturn underspend of £6.696m, whilst at the same time ensuring that our obligations were met.

"It included a £330m spend on adult social care, £223m on services for vulnerable children and families and also investments of £74m in highways and £29m in new and improved schools."

Cllr Craig Humphreyson said: "The £6.696m underspend is very commendable, especially with it being the first year that we've been in charge.

"However, some of it does seem to be one-off benefits or being dependent on the reserves that are being used.

"Of the underspend, how much of it is genuine, sustainable savings?

"And what are the plans for areas like children and families that have been reliant on reserves as they can't be used in the long run?"

The meeting was told the use of reserves in health and care was a planned use as part of the Medium Term Financial Strategy (MTFS) setting process.

And during the life of the MTFS the ongoing use of the reserve was set to reduce to zero.

For children and families, where reserves were also used to offset cost pressures, the underlying overspend was around £4.5m on children's placements.

This was continuing into the current year, but there was a financial recovery plan in place, the committee was told.

Cllr Philip White said: "The good news is, as an authority we've been really well-run in terms of our finances for many years.

"We have a strong financial position that many authorities would give their left arm to have.

"However this underspend, there is a very small element that is genuinely what we would call a bankable saving.

"I don't think there's any recurring savings here.

"I think the majority of it is down to lower energy costs we accounted for when we were setting the MTFS because energy prices haven't been as high, it's lower wage inflation, less money spent on concessionary fares for bus travel and a variety of other one-off underspends where we simply haven't used the budget as allocated.

"At the same time, we've got £6.7m of reserve for health and care that's been used – that was planned – but we need to be clear that is slightly more than the reported underspend on its own.

"The point I really wanted to focus on was the overspend in children and families; we need to provide what our children need and if we have vulnerable children who require services from the council or be taken into our care we need to find the money for that.

"But we've got an overspend there of £4.5m that's come from reserves and from my understanding that's not likely to be a one-off.

"It's distasteful talking about children in statistical terms, but the fact is a child who enters our care tends to remain in our care for quite a number of years on average.

"I think it would be useful to have a bit of understanding in terms of what our thinking is on that and how we're planning to account for that because in terms of our financial system, that is something that has come in during our MTFS period and is not something we planned for."

Cllr Bagguley responded: "It's something we're paying a lot of attention to because at the moment it requires a structural change.

"You can't continue to have such high impact expenditures on a recurring basis because it's just not sustainable.

"A large part has been brought about by sudden increase, which wasn't included in the original business plans of children in care.

"There's only variables as far as that's concerned and that's the cost of the care or the number of children going into care.

"The cost of care will play a large part in what we're looking at in terms of cost recoveries and sorting this out.

"But the number in care – if you look at the projections on graphs going back a couple of years it was all steady then suddenly a huge increase we've got to take care of now – it's up something like 200-ish children going into care which has caused this huge pressure we're facing now.

"Suffice to say, we are dealing with it and I am liaising with the team to sort it out; we're setting up monthly feedback in terms of where we're up to and cost recovery."

Cllr Ian Cooper said: "We are the custodians of other people's money.

"We have to define what we should do as a council and what we shouldn't do – what is discretionary, what is statutory.

"Within those parameters we have to be mindful of our own internal cost controls as well – are we keeping a lid on our internal cost of doing business to run the council itself?

"Are there areas we could look at to ease and alleviate those costs which could then be transferred to areas such as children's and other needy services?"

Cllr Bagguley responded: "We have been doing a lot of work on efficiency.

"A large bit of work was done on limiting agency spend on areas where that was possible to do.

"We should be doing everything in the most efficient manner possible.

"However we do need to be mindful of the fact we have the LGR (local government reorganisation) work we have to do down the line as well."