The local government minister has expressed “significant concerns” over the financial strategic direction of Bournemouth, Christchurch and Poole (BCP) Council as he offered the authority “in-principle support” of £20m.
In a letter to the council, dated September 2, Paul Scully said he was “minded to” offer the council £20m of financial support in the form of a capitalisation direction for the financial year 2022/23.
This council made an application in July under the Exceptional Financial Support (EFS) programme for £76m over the next three years, which included £20m for 2022/23. The programme was put in place to help authorities address financial pressures that are considered unmanageable.
I want to reiterate that I continue to have significant concerns about the present financial strategic direction of the council and urge you to consider what action is needed to ensure the council remains in a sustainable position.
Beach hut backlash
The application comes after the authority’s proposal to sell its beach hut portfolio to a subsidiary company was blocked by the government in an amended direction on the flexible use of capital receipts.
Scully stressed that the letter itself does not constitute a capitalisation direction but outlines the government’s current position.
He said: “I want to reiterate that I continue to have significant concerns about the present financial strategic direction of the council and urge you to consider what action is needed to ensure the council remains in a sustainable position.”
Scully said the financial support was subject to the council producing a plan for addressing its budget gap in 2023/24 and beyond by the end of September 2022.
“This plan should seek to utilise all the resources available to the council to close the budget gap, be fully within the spirit and intent of all local government guidance and aim to eliminate any amount of exceptional financial support required going forwards,” Scully added.
External financial review
The EFS is also subject to the council undergoing an external review of its finances and governance arrangements in autumn 2022.
The minister said that the government would not consider the council’s EFS requests for 2023/24 and 2024/25 until after the local government finance settlement has allocated resources to all local authorities. His letter advised the council to make necessary plans and arrangements to secure its short- and medium-term future.
“Going forward, it is essential that the council is able to offer long-term security and reassurance to local residents,” Scully wrote.
A report by Adam Richens, BCP’s director of finance, recommended that the council make no new financial commitments until there is a balanced budget for 2023/24.
Both the letter and report will be discussed by the authority’s cabinet on 7 September.
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