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Fears Lancashire 'can't balance budget' in 2020-21

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The leader of Lancashire CC has accused his opposition counterpart of “scaremongering” following accusations the council may not produce a balanced budget in 2020-21.

Geoff Driver (Con) said his administration is “sorting out the mess” created by the last Labour-led administration and had reduced the council’s deficit by a quarter.

Lancashire’s medium term financial strategy (MTFS) has warned the county council is “forecast to face an in year funding gap of £157.786m” by 2021. The MTFS, published in January, set out plans to meet funding gaps of £48.9m and £69.9m in 2018-19 and 2019-20 respectively through reserves. At the start of the year, the county council had reserves totalling £123m. Plugging funding gaps in this way would leave the county council with just £4m reserves in 2020-21, the MTFS said.

Opposition Labour group leader Azhar Ali told LGC he “was not scaremongering” and said: “The last financial report shows that our reserves will be finished in 2020 - we would not be able to set a legal budget in 18 months time. Coming up to budget end of this year and the year after would be the last year we could set a legal budget.”

Cllr Ali said cuts to services were hitting the county’s poorest residents hardest.

“Children’s services are already at breaking point and schools are bursting at the seams,” he said. “There’s not enough money to build more schools or expand existing schools in old buildings. Food bank use is increasing and Lancashire is entering a vicious circle of poverty.”

Cllr Driver told LGC: “Cllr Ali knows all about the financial problems facing Lancashire [County] Council because he was part of the Labour administration that sat idly by and did nothing to address them.

“This Conservative administration has already reduced the £200m deficit in the medium term budget left by Labour [in 2017] by over 25% and, somewhat obviously, we have presented a balanced budget for 2018-2019 which Labour predicted would not be possible. Cllr Ali should stop scaremongering and leave those of us who know what we are doing to get on with sorting out the mess he helped create.”

Interim chief executive Angie Ridgwell told LGC in March how her “top priority” was to move the county council into a more sustainable financial position. She said she intended to do this by tackling the council’s culture and compiling customer information in “excruciating detail” to better understand why people are using the council’s services.

The council’s impact assessment of impending additional cuts to certain services between 2018-19 and 2020-21, submitted to cabinet in January, warned some of the proposed cuts are likely to prove counter-productive.

According to the report “there is the possibility of low level crime and disorder escalating into more serious criminal activity” if £265,000 funding for police community support officer posts is removed by the end of 2019-20.

The report also cites fears the council “may not be able to fulfil its statutory functions” if offending rates increase following £336,000 cuts to the county’s youth offending team this financial year.

Noteable effects of cuts totalling £450,000 in support for carers of looked after children include a “possible increase in placement breakdowns” and “costs of future placements increase”.

Reorganisation

Meanwhile, discussions over reorganisation in the east of Lancashire are underway - something Blackburn with Darwen BC  leader Mohammed Khan (Lab) called the “nuclear solution” to the region’s financial problems.

Lancashire CC resolved at full council on 24 May to “await the outcome of these discussions and any firm proposals” over a new unitary authority for Pennine Lancashire. This would cover Blackburn with Darwen, Burnley, Hyndburn, Pendle, Ribble Valley, and Rossendale BCs.

While Pendle BC leader Paul White (Con) said it was something his council is “committed to looking at”, Ribble Valley leader Ken Hind (Con) said his group had “decided not to join a East Lancs unitary” as “our fear is that we would be dominated and swallowed by the larger towns and be the main housing development area for the new unitary”. Cllr Hind said he was “content to remain in a two-tier system of local government” but added: “If we are pressed to form a unitary we will look to the rural authorities on our borders with whom we have community of interest as partners.”

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