A gap in finances amounting to £34 million looms for the two new Cumbrian councils set to take over the running of the county.
Information seen by the Local Democracy Reporting Service suggest that Cumberland Council and Westmorland & Furness Council are projected a £34 million gap in finances by 2025.
The new unitary councils will govern two new authority areas after local government reorganisation. Cumberland Council will take over in Carlisle, Allerdale and Copeland. Westmorland & Furness Council will take over in Eden, South Lakeland and Barrow-in-Furness.
Existing Cumbrian council- including the county council – will be abolished from 2023 and their assets including buildings and land, will become the property of the new authorities.
Cumbria County Council is said to be responsible for 65 per cent of the projected budget gap.
With £386.75 million in borrowing, the county’s share of the debt inherited by the new councils amounts to 82 per cent but it will contribute 48 per cent of the reserves.
In comparison Carlisle City Council currently has £13.29 million in borrowing set to be inherited by the new councils and £12.940 million in reserves.
Leader of Cumbria County Council Stewart Young pointed to the pressures on children’s services and adult social care as responsible for the projected budget gap and council borrowing.
Deputy leader and finance boss Peter Thornton said: “All councils have budget gaps looking to the future. The county council has a record of always delivering a balanced budget.”
Mayor of Copeland Mike Starkie, who is the co-author of the east-west split, believes the financial picture shows why local government reorganisation is necessary.
He said: “Across the county in 2025 there’s a projected budget gap of £34 million. The funding model for local government doesn’t work.
“Local government reorganisation is potentially going to save between £19 million and £30 million in itself. That will address some of the budget gaps when this comes together.
“It will drive efficiencies, the whole point of local government reorganisation is not about saving money it’s about resilience.”
Allerdale Borough Council has accrued £16.56 million in debt with £6.99 million in reserves. Eden District Council’s debt is zero with £12.9 million in reserves.
