A report about Copeland Council’s financial position reveals that caution will be needed to avoid significant consequences for the financial sustainability of its successor.
An update on Copeland Borough Council’s finances has been published by Grant Thornton, making a number of recommendations to amend historic governance issues.
A document produced by the firm makes mandatory recommendations to council. It said: “Copeland Borough Council’s 2018/19 and 2019/20 and 2020/21 financial statements and value for money conclusions have not yet been completed.
“The council has produced a draft set of financial statements for 2019/20, which will be updated on completion of the 2018/19 to take account of the audit changes made.”
In February 2021, the council was asked to introduce robust arrangements for the production of the late reports.
In its latest report, Grant Thornton said: “We acknowledge that, the council has made some progress on these statutory recommendations but further work is required, especially to bring the council back into line with financial statement statutory reporting deadlines to support fully informed decision making.”
The council has produced a balanced budget seven consecutive times.
But Grant Thornton revealed that the council’s historic issues with financial governance could create issues going into local government reorganisation.
By 2023, the process will see Cumbria County Council, Carlisle City Council and the borough councils abolished, and replaced by one unitary authority in the west: Cumberland Council.
Each council was required to make a financial contribution to the reorganisation process with Copeland paying £1.6 million into the collective pot.
The report said: “We find this leaves the council in a financially challenging position, especially in the context of the numerous financial budgeting and reporting governance weaknesses, highlighted by both of us as the appointed auditor and the Department for Levelling-Up Housing and Communities review issued on December 2021.”
Setting its final budget in February, the council set out a legacy of investment over three years.
Grant Thornton said: “Given the precarious revenue position the council is currently in, it has to be extremely careful not to overcommit on its capital ambitions.”
A series of recommendations came with the report, which was produced in March 2021 and signed off last week.
It said that the position described represented a failure of governance with risks of overcommitting on the council’s capital ambitions especially in the context of local government reorganisation and any legacy decisions, which may have significant consequences for the financial sustainability of the new Cumberland unitary authority.
There was also a call for immediate action to strengthen the council’s internal audit service and audit and governance committee.
