THE financial turmoil at BCP Council has been spelt out in a scathing report from the local authority’s own auditors.

Firm Grant Thornton has warned the council’s ability to set a balanced revenue budget for next year and beyond appears “increasingly fragile”.

They say the current arrangements for financial sustainability “are not good enough”, while concern was raised over the spiraling cost of the local authority’s transformation programme.

The assessments were made as part of the external auditor’s report for 2020/21, which is due to be discussed by BCP Council’s audit and governance committee on Thursday, October 14.

The report, which is dated September 28, said significant weaknesses were found in arrangements to ensure financial sustainability and improving economy, efficiency and effectiveness. Key recommendations were given in both of these areas, while four important recommendations were given for the governance area.

“The council’s current financial plans are predicated on a high risk alternative funding strategy to deliver transformational efficiencies and avoid significant cuts to services,” the report said.

“There is currently an absence of alternative strategies to balance the books into the medium term should this high risk strategy not be deliverable.”

The cost of the transformation programme has increased from £29.5million in November 2019 to £67.9million in February of this year.

The report described the now scrapped beach hut commercialisation proposal, which was going to cover a large chunk of the transformation finances, was “innovative but high risk”.

It says the capitalisation direction for borrowing £75million from government beyond the “in-principle” £20million for the current year is not guaranteed.

“Both the initial and revised proposal would attract strict conditions (which have weight heavily on other councils in a similar predicament) and are normally reliant on asset disposals that the council may struggle to realise,” the report said.

It added: “The timetable for the transformation programme has already slipped and if the current full funding proposal for transformation totaling £75m is not forthcoming the council will have no alternative other than to deliver significant savings as well as cuts to services to remain financially viable.”

Grant Thornton warns that the full capitalisation direction request could result in an acceleration of selling assets, which might not result in the best value for money outcome.

BCP Council leader Cllr Drew Mellor said: “BCP Council is facing the same pressures as all other local authorities as we deal with the rise in the cost of living. We have been doing a great deal of work to proactively manage these issues and help mitigate against the unprecedented financial challenges.

"Since the auditor’s report was published, we have made strides towards delivering a balanced budget for this year and next.

"A budget report will be published on Monday.”