Copeland council chiefs were told this week that they must accept the findings of a Government report into its finances and request £1.5 million in support to avoid the local authority equivalent of bankruptcy.
Copeland Borough Council’s financial position has been severely impacted in recent years by a hefty business rates appeal from Sellafield, a cyber attack and the withdrawal of government funding.
A special meeting of the borough council took place on Thursday to discuss a report commissioned by Government, and carried out by the Chartered Institute of Public Finance and Accountancy (CIPFA), on the council’s financial situation.
The report revealed the significant risk of Copeland’s financial situation which could include a Section 114 notice – the council equivalent of bankruptcy.
Councillors met this week to agree their response to Government, requested by minister Kemi Badenoch MP.
Chief finance officer Steven Brown recommended that the council ask for an immediate capitalisation directive of £1.5 million from Government. This is a portion of the £5 million in borrowing already accrued by Copeland and would simply give the legal authority to use it.
Mr Brown said: “Our reserves are reducing but a capitalisation directive of £1.5 million means we don’t need to use the reserves as much. It provides us resilience in the final year of the council and I believe ensures that Copeland finishes well.
In a letter accompanying the CIPFA report, Ms Badenoch asked the council to accept its findings and set out what support would be needed.
Mr Brown said: “We need to take the report to council in February [and] seek to set a budget for 2022/23.
“My recommendation is that we are in broad terms accepting all the recommendations in this report. There are some nuances in this report that I don’t think quite reflect where we are but I don’t think that deters from us accepting this report.”
Executive member, Cllr Steven Morgan asked Mr Brown: “Are you saying that if your proposal is approved, in the near term we won’t fall into a Section 114 situation, is that correct?
Mr Brown said: “Yes councillor, that’s correct.”
Councillors heard of the increasing pressures facing the authority’s coffers whilst financial support dwindles. The Revenue Support Grant, which is given to local authorities by
Government, stood at £3.3 million for Copeland in 2013/14 but by 2018/19 it had reduced to £0.4 million. In 2019/2020 it was completely withdrawn.
Members agreed to accept the report and delegate authority to finance officers to respond.
