Grant Thornton has raised “serious concerns” about the continued financial viability of Bournemouth, Christchurch and Poole Council.
In an auditor report for 2021/22 and 2022/23 published on 31 August, Grant Thornton highlighted the council’s “high-risk alternative funding strategy”. Bournemouth, Christchurch and Poole (BCP) has not achieved the “desired outcomes” in delivering transformational efficiencies or avoiding significant cuts to services, the report explained.
Grant Thornton said the council’s “high-risk approach” was “reliant on the use of reserves to support the budgets” and has “resulted in the further depletion of revenue reserves as expected efficiencies from the transformation programme are not realised in accordance with the original timetable and are pushed back into later years”.
The Grant Thornton report comes on the heels of the Department for Levelling Up, Housing and Communities (DLUHC) issuing the authority with a Best Value Notice – a non-statutory but formal notification that raises concerns about governance, culture and finance – in early August.
DLUHC categorised BCP Council’s Medium Term Financial Plan and budget as “unrealistic” and based on “the delivery of an overly ambitious transformation programme both in terms of levels of savings and timescales for delivery”.
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Grant Thornton’s report also raised concerns over the council’s ability to set a “credible” Medium Term Financial Strategy “that properly reflects the spending power at its disposal”. The auditor added that BCP’s medium-term plans for its General Fund Balances and Earmarked reserves showed “significant weaknesses”. The level of earmarked reserves continues to fall, Grant Thornton said.
The report therefore recommended an urgent review and said a realistic plan must be produced to replenish reserves and balance the budget gap.
BCP’s transformation programme is also “not progressing at sufficient pace” and is “increasing rapidly in costs”, Grant Thornton’s report said. An urgent review of the transformation programme should be conducted, the report recommended. Costs of the programme are rising and there has been a “lack of transparency” as to the factors driving this.
The Best Value Notice issued by DLUHC – which also called for a “reset” in BCP’s culture – will remain in place for 12 months, but can be reissued, withdrawn or escalated. As part of the process, BCP is expected to engage with the Local Government Association and DLUHC during the period of the notice.
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