Will Lancashire County Council go bust?

The council says it is looking to identify more savings
The council says it is looking to identify more savings
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Will the Government be called in to run Lancashire County Council?

That’s the question being asked this week as councillors meet to consider a crisis report on council finances.

READ MORE: Government announces £100m funding boost for Lancashire's road

They will be told that 47 schools went over budget last year and other services overspent by millions of pounds.

Despite repeated multi million pound cuts to council services in recent years, a budget deficit of £118m is predicted for 2021.

The alarming report, which will be presented to cabinet tomorrow, reveals that despite an underspend of £21m on services in 2017/8, had the council not dipped into reserves by nearly £59m its total overspend in the last financial year, would have been £38m.

The council says it is looking to identify “more savings” and reduce its planned use of reserves in 2019/20 and beyond by “achieving a financially sustainable position” no longer reliant on reserve funding.

Earlier this year Northampton County Council was forced to call in the government after it effectively went bust.

Now some fear that Lancashire could be going the same way.

Unison spokesman Elaine Cotterell, whose union represents 10,000 council employees, said: “It could happen here if there isn’t a way for the council to meet savings.

“I don’t know how Lancashire county council is going to provide services to the citizens of Lancashire.

“Lancashire, along with a lot of other authorities are using their reserves up. We’ve got to provide the services for adult and children’s social care.

“I think what has happened in Northamptonshire is going to be replicated in other councils the length and breadth of the country.”

County Coun Azhar Ali, leader of the council’s Labour opposition group said: “We are heading towards a complete meltdown in service provision while council tax is rising year on year.

Lancashire County Council is on the same track as Northamptonshire. There are serious issues in local government finance. It’s a complete shambles. Buckinghamshire and some of the some of the larger county councils in the country could go bust in a few years.”

He claimed that locally: “The Conservatives are in denial and not putting the case to Government for serious additional money.“They’ve taken their eye off the ball and are heading towards the buffers.”

Meanwhile County Coun David Whipp, leader of the Liberal Democrat group on the council accused the council of “a new twist on highway robbery” and complained of “a massive £30m road improvement failure.”

He continued: “Our streets have gone from bad to worse. They specifically promised to invest an extra £5m on road repairs, but failed to spend £4.8m of that. Overall the £30m failure is made up of hundreds of repair and improvement schemes across the county - vital work that could and should have been carried out in a timely way to help end the misery on our highways.”

He continued: “The county council story is a sorry saga of slippage adding up to tens of millions worth of work deferred, cancelled or not delivered. It’s a scandal.

He said while the county was a patchwork of potholes and bodged pothole repairs bosses sat on a mountain of money referred to as underspends.: “It’s a new twist on ‘highway robbery’. They shouldn’t be allowed to get away with it.”

• The Council has a forecast funding gap of £68m in 2019/20. This year it received additional one off income of £6.54in a settlement re. its discontinued Waste PFI (private finance initiative.)