Calls for Copeland Council to begiven £1.5 million to help it tackle its financial issues has polarised its political groups.
The council met last week to set out a response to the UK Government following a report on the ‘considerable’ financial challenges ahead.
Levelling-Up minister Kemi Badenoch requested that Copeland Council includes in its response the immediate financial support needed and long-term plans to avoid a Section 114 notice – the council equivalent of bankruptcy.
The council unanimously agreed with the recommendation of chief finance officer Steven Brown to request a £1.5 million capitalisation directive from Government. This is a portion of the £5 million already borrowed by the previous administration.
Labour has criticised the current leadership for Copeland Council’s financial situation.
Cllr Joseph Ghayouba said: “Thursday’s emergency meeting was not just about the CIPFA report into Copeland’s finances but it was also an appraisal of Mike Starkie’s reign as mayor and it was extremely damning, which probably explains why he opted to sit quietly and hide behind his officers.
“According to the presentation by the finance officer, Copeland’s costs have gone up, government funding has gone down and this has not really been replaced adequately with other sources of revenue, which absolutely blows a hole in the mayor’s promise to bring in all this extra revenue for the council with his business expertise.
“Now, as a member of Copeland Council I was being told we need to borrow from our capital reserves to balance our budget and ensure job security! So much for levelling-up.
“The cyber attack was used as a mitigating factor. However, the mayor can’t really use this as an excuse for his poor record because it happened on his watch. According to the council’s auditor the weaknesses in the structures and systems that Copeland had in place ‘may have exacerbated the impacts of the cyber attack’.”
Cllr Ghayouba added: “Copeland hasn’t published a set of accounts on time for a number of years which has led the auditor to express concerns in their report that the council (and councillors) cannot make informed decisions.”
Mayor of Copeland Mike Starkie said: “What I wanted to do was take the politics out of the meeting completely and have the Section 151 officer (Mr Brown) present the facts.”
But the mayor lays the blame at Labour’s door. Mr Starkie says he inherited bad finances from the previous administration.
“We will set yet another balanced budget for the seventh consecutive year, we have very low debt, of just £5 million which in Cumbria is only bettered by Eden.
“The £5 million was borrowed by Labour in 2002 to pay a VAT bill that they thought they would have to pay on the housing stock transfer which turned out to have no VAT liability so they
had lumbered CBC with a £5 million interest-only loan at 7 per cent for 40 years. It has been sat in reserves for 20 years earning about 1 per cent, it will cost the council £15 million in interest payments over the term.”
Mr Starkie said: “We have gone to Government to get permission to use some of that £5 million to support the revenue budget.”
The Conservative mayor has also said that the previous Labour administration did not prepare for a £30 million business rates appeal in 2015.
“We know we spent six years cleaning their mess up.”
