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COUNCIL CONSIDERS URGENT ACTION TO TACKLE SURPRISE£1M OVERSPEND BY CUMBRIA CARE

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Cumbria CC's cabinet on 9 July will receive a report from the council's chief executive, Louis Victory, recommendin...
Cumbria CC's cabinet on 9 July will receive a report from the council's chief executive, Louis Victory, recommending major changes to how budgets are managed by the authority. This follows in the wake of a shock announcement that the council's Cumbria Care Business - which provides Residential and Home Care for older people and those with disabilities - overspent its budget by nearly£1m last year (see LGCnet).

The chief executive recommends putting Cumbria Contract Services into 'special measures' with a new independent finance director from outside the council working with the authority's treasurer, to implement a Change and Improvement Programme. Progress will be directly reported to councillors.

His report further recommends other strong measures to get improved financial management systems in place. Mr Victory says:

'Some years ago the responsibilities of managing much of our budget were passed to individual departments and our treasurer lost the ability to control from the centre much of our accountancy work'.

Mr Victory adds that he is not prepared to see this risky situation continue, and he is recommending to councillors a reversal of this policy so that in future the Treasurer can exercise strict central control and take full managerial responsibility for financial performance.

Council leader Rex Toft says:

'The council's cabinet was advised only some three weeks ago that there was a large and unbudgeted overspend in Cumbria Care. No prior warning was given to cabinet of the developing crisis. The situation is unacceptable. We will be studying closely the report from the chief executive, which has been produced quickly and as a matter of urgency. The report raises a number of issues in relation to members of staff. Until such time as these issues have been fully and properly considered, it is not appropriate for the council to make any further statement'.

Deputy leader Mike Ash, who chairs the budget review sub-committee comments:

'This has been an appalling saga, following on from an overspend in Cumbria Contract Services revealed to the new administration shortly after it came into office. It seems that the origins of the problem lie not only in managerial issues but also in long established policies. We are determined to tackle them courageously to secure better management of public money'.

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