Copeland Council calls for government financial support to avert financial crisis

COUNCIL chiefs were told this week they must accept the findings of a government report into its finances and seek £1.5m backstop to avoid the equivalent of the local authority going bankrupt .

Copeland Borough Council’s financial situation was badly affected for a number of years by a heavy appeal over Sellafield’s commercial tariffs, a cyberattack and the withdrawal of UK government financial support.

A special session of the borough council was held Thursday to discuss a report commissioned by the government and carried out by CIPFA, on the financial situation of the council.

The 39-page report revealed the “significant risk” of Copeland’s financial situation which could include a Section 114 notice – the equivalent of bankruptcy counsel.

Councilors met this week to agree their response to the government, which MP for Leveling Minister Kemi Badenoch has requested within 30 days.

Chief Financial Officer Steven Brown has recommended that the board seek an immediate funding directive of £1.5m from the Government, this is part of the £5m of borrowing already accrued by Copeland and would give just the legal permission to use it.

Mr Brown said: ‘As you know our reserves are going down but a £1.5million funding guideline means our reserves are a bit more protected, it means we don’t need use the reserves as much.

“It gives us resilience in the final year of the board and I think Copeland is ending well.

“As you know, reserves are there for booked events and one-time events. The more reserves we have, the greater our resilience to any risks that may arise.

In a letter accompanying the CIPFA report, Ms Badenoch asked the Copeland Council to accept its findings and outline what support the government would need.

Mr. Brown recommended that the board agree to respond and explain how it intends to balance the budget in the short term.

Mr Brown said: ‘Unfortunately, when they released this report, they also came close to putting the budget together.

“As you know we need to present the report to the board in February, seek to budget for 2022/23, we need to know where we are with this capitalization directive.

“My recommendation is that we accept in general terms all the recommendations of this report. There are some nuances in this report that I think don’t quite reflect where we are, but I don’t think that deters us from accepting this report.

Executive Member, Cllr Steven Morgan said: “This is a very important topic, we shouldn’t make it political, we shouldn’t make it personal.

“I would like to highlight the importance of Mr. Brown as a professional financial officer above the other. Are you saying that if your proposal is approved, in the short term we won’t fall into a section 114 situation, are we?

Mr. Brown said, “Yes, Councillor, that is correct.”

The members agreed to accept the report and delegate authority to the finance officers to respond to it.

Advisors have heard of the growing pressures facing the coffers of authority as financial support dwindles.

The income support grant, which is given to local authorities by the government, was £3.3million for Copeland in 2013/14, but in 2018/19 it had fallen to £0.4million pound sterling. In 2019/2020 it was completely retired.

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