County Council's cash crisis revealed in new report

Lancashire County Council is heading for financial disaster with its reserves set to run out by 2018/19. an independent report has found.

Tuesday, 27th September 2016, 1:36 pm
Updated Tuesday, 4th October 2016, 1:58 pm
Photo Ian Robinson Preston landmarks County Hall

Expert accountants have predicted the Government could be called in to run essential services if the council can no longer afford to do so.

The report by financial boffins PwC was commissioned by the council in a bid to bolster its case for more cash.

In 70 pages it reveals just how empty the council’s coffers will soon become.

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The Council’s deputy leader Coun David Borrow now plans to use the report to pressure the Government to rethink how councils are funded.

Even if Lancashire scales back its services dramatically it would still face a spending gap of £79m in 2020/21 with an overall shortfall of £227m PwC concluded.

Coun Borrow said the report showed the Council needs to make savings of £148m in 2020/21, even if it raised council tax by 3.99% every year for the next four years: “This independent confirmation that our finances, like those of many other councils, are clearly not sustainable will help us to make the case to Government that they need to rethink how they support councils.”

But critics have asked why the council has spent money to find out what it already knew, with Tory leader Coun Geoff Driver accusing the ruling Labour of wasting millions of pounds on the report, which will be considered by councillors next week at scrutiny and cabinet meetings.

PwC revealed one possible factor in the county’s plight - Lancashire has the third lowest income from Council Tax of any county council in the country, which it says reflects both the type of housing here and lower prosperity.

Coun. Borrow, who is the council’s finance spokesman, said PwC had been asked to assess how much the council would need to provide those services it is legally obliged to provide, including caring for elderly and vulnerable, safeguarding children and highways maintenance.

He added the report ”sets out in stark relief the scale of the challenge we face...It forecasts that the council’s reserves, which we are currently using to balance our budget, will run out in 2018/19.”