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Lancashire CC rejects ‘unsustainable’ four-year settlement

Lancashire County Council has turned down the government’s offer of a four-year funding settlement because it would leave the local authority “financially unstable” within the near future.

The settlements were introduced by then communities and local government secretary Greg Clark last year to help councils plan ahead in light of the unprecedented funding pressures on local government.

However, Lancashire County Council, which is facing a £79m in-year deficit by 2020-21, said that even with the certainty of a four-year funding settlement it would not be able to balance its budget in the near future.

Cllr David Borrow, the council’s deputy leader, said: “The projected level of funding in the four-year settlement is simply not enough for us to be able to deliver balanced budgets.

“We would like nothing more than to have the certainty of a four-year settlement but we cannot sign up to a deal that would leave us financially unsustainable within the next couple of years.  We are working hard to persuade central government that they need to rethink how they support local government, which provides so many of the essential services that people rely on every day.”

Lancashire County Council recently approved a plan to close services, including libraries and children’s services, at more than 100 sites in a bid to achieve the needed savings.

The Department for Culture, Media and Sport has now said it will investigate the cuts to see if they constitute a breach of the council’s statutory duty.

An independent review by accounting firm PwC warned that even with the cuts central government could take over the council’s finances if it cannot achieve sustainability by 2020-21.

Separately, Surrey County Council also said it was rejecting its offer. A spokesperson for the council said that the four-year settlement did not “constitute a fair deal”.

“Government funding for Surrey services dropped by nearly half this year – the biggest drop anywhere in the country – when demand for and the cost of providing services, particularly in adult and children’s services, is rising,” they said.

“Not only will our core government grant disappear before the end of the decade but ministers are also expecting the county to refund them £17m – the equivalent of around a 3% increase in council tax for Surrey residents to fund services elsewhere in the country – and this would be paid back annually.

“Surrey residents already contribute more than anyone else outside London to the national exchequer and this additional ‘tax’ is a step too far.”

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