TERSE and frank exchanges over the state of BCP Council’s finances descended into a fractious and tense atmosphere as councillors sought to get clear answers over the budget and defunct beach huts scheme from the local authority’s leadership.

With a “material funding gap” facing the authority for next year thanks to the failed proposal to sell-off the council’s beach huts to fund £50million worth of transformation, members of the overview and scrutiny committee asked probing questions of BCP Council’s leader Drew Mellor during two often chaotic and disruptive meetings.

The council’s “innovative” plans were torpedoed by the government in a dramatic and highly-critical intervention earlier this month. Following this, it was confirmed the council had asked the government for £76million over three years, including £20million in the current year, to mainly fund transformation.

Read more: What is happening with BCP Council budget after failed beach huts

Bournemouth Echo: Government minister Paul ScullyGovernment minister Paul Scully

Just hours before the meeting on Friday, the council published a letter from Government minister Paul Scully to Cllr Mellor, who said while saying he was minded to offer BCP Council £20million, “I want to reiterate that I continue to have significant concerns about the present financial strategic direction of the Council and urge you to consider what action is needed to ensure the Council remains in a sustainable position.”

No decisions will be made over funding for 2023/24 and 2024/25 at this stage, it added.

A report to the scrutiny committee from the authority’s chief finance officer Adam Richens recommended no new financial commitments should be made until the local authority can deliver a balanced budget for next year.

The authority also needs to agree to an external assurance review of its finances and governance arrangements this autumn.

And it looks almost certain residents will face a council tax increase in 2023/24 and by the full amount based on current officer forecasts as well as an increase in fees and charges for all services.

Read more: How serious are financial challenges facing BCP Council

During the meeting it was stated ‘further commercialisation’ could mean exploring more opportunities including increasing fees and charges in some areas, the in-house proposals on beach huts and seafront services income.

Liberal Democrat, Cllr Vikki Slade, former council leader and opposition group leader asked Cllr Mellor if he regretted the fact the situation had caused “this council huge embarrassment, for the whole of the local government family to now know BCP Council is known for dodgy deals and the risk it has put on whether this council will be able to secure future funding.”

“Is he going to resign?”, she added.

Watch the beach huts meeting here

Cllr Mellor said: “I am not embarrassed about standing up and delivering small state low tax for our residents.

“When we look at what we have delivered without selling our assets…I am proud of our record, and we are one of the only councils to deliver back-to-back council tax freezes.”

Cllr Mohan Iyengar, from Poole Local Group said this was not the time for “quickfire back and forth” questions: “This is meant to be a searching inquiry.

“There is something serious to repair here in our relationship with Government. There was something in the budget paper at the start of the year which should have been super clear but there was ambiguity.

“There is something, given the seriousness of what’s happened now, that should have been made emphatically clear when we were really relying on it to balance the budget. And it wasn’t there.

“What has compounded this issue is the lack of disclosure around it. The ability to engage in this subject has been minimal. This has not served this council well.”

Cllr Mellor replied: “I do not agree there was ambiguity in the budget paper. The ambiguity is that the government have changed the rules.

Watch the finance meeting here

“We were very transparent about what we were trying to do.

“Today we received a letter from the minister who absolutely supported in principle our ability to fund transformation. He is going to deliver for us something this council has been wanting to do…it is entirely positive for this area. It means we can borrow and spread the cost. We aren’t trying to do something normal. If we are going to break some eggs doing that, I’m happy with that.”

Cllr Iyengar replied: “That is a stance that will not serve this council well going forward. My feeling is that they did not change the rules.

Read more: BCP Council finances a 'complete mess' and 'on life support'

“This was a situation that rules get tested by behaviours at the margins and those behaviours are not welcomed. That is something we need good acuity about.”

During the second meeting, Cllr Mellor said “we have significant pressures around cost of living”.

Cllr Mike Cox asked if BCP Council must increase council tax by the maximum permitted, to which Mr Richens referred him back to the 22/23 budget report where he “went to the unusual step of suggesting the council looks an alternative budget which including taking the opportunity to raise council tax.”

He said he would be advising council to protect their unearmarked reserves, particularly as we move to a time of uncertainty.

Cllr Mellor said several times it was his ambition to be a “small state, low tax” authority but there was “more challenge to that” now.

In talking about energy costs and the impact on the council, Mr Richens said the operations area was where the council had significant energy costs and the council were assuming costs would double.

“The reality is of total uncertainty. Our procurement team is monitoring prices daily, it is a very dynamic situation. The only thing I can guarantee is total uncertainty.”

Members also recommended ‘increasing scrutiny’ during the budget issues to which all members are invited to attend.

A number of recommendations will be passed to cabinet who meet on Wednesday.