Report says council's cash to last two years 2018
Lancashire County Council is heading for financial disaster with its reserves set to run out by 2018/19, an independent report has found.
Expert accountants have predicted the Government could be called in to run essential services if the council can no longer afford to do so.
The report by financial experts at PwC (Pricewaterhouse Coopers) was commissioned by the council in a bid to bolster its case for more cash.
In 70 pages it reveals just how empty the council’s coffers will soon become.
The council’s deputy leader Coun David Borrow now plans to use the report to pressure the Government to rethink how councils are funded – but some have criticised the council for spending money on the report to find out what they already knew.
PwC concluded even if Lancashire scales back its services dramatically it would still face a spending gap of £79m in 2020/21 with an overall shortfall of £227m.
Coun Borrow said:“This independent confirmation that our finances, like those of many other councils, are clearly not sustainable will help us to make the case to Government that they need to rethink how they support councils.”
He added the report showed the council needs to make savings of £148m in 2020/21 even if it raised council tax by 3.99 per cent every year for the next four years.
But Tory leader Coun Geoff Driver accused the ruling Labour group of wasting money on the report, which will be considered by councillors next week at scrutiny and cabinet meetings.
He said: “A pound to a pinch of snuff the report won’t tell them anything they don’t already know. It’s got pretty pictures, pretty graphs but it will say absolutely nothing they don’t know.”
PwC revealed one possible factor in the county’s plight – Lancashire has the third lowest income from council tax of any county council in the country, which it says reflects both the type of housing here and lower prosperity.
Coun Borrow, who is the council’s finance spokesman, said PwC had been asked to assess how much the council would need to provide those services it is legally obliged to provide, including caring for the elderly and vulnerable, safeguarding children and highways maintenance.
He added: “The report sets out in stark relief the scale of the challenge we face... it forecasts that the council’s reserves, which we are currently using to balance our budget, will run out in 2018/19.”
The cost of the report has not been revealed.