THERE is ‘grave concern’ the council looks to be heading towards a ‘financial emergency’, according to its director of finance.

BCP Council will be technically insolvent from March 31, 2026, as reported, after a statutory override ends on education funding.

The council’s education deficit on its dedicated schools grant is forecast to be £116.5million by this date, with a predicted net position for council finances of a deficit of £63.2million.

This forecast position, due to overspend on the high needs block within the DSG, is ‘causing grave concern within the council’.

But the local authority may be headed for financial disaster before this is addressed due to a 'severe' lack of cash.

Adam Richens, BCP Council’s finance chief, has written to Nico Heslop, the director of local government finance in the department for levelling up, housing and communities, outlining his concerns.

Mr Richens told Mr Heslop the council’s DSG deficit was at £64m in March, compared to its reserves of £65m, and this is expected to rise to £92m next March, with the total reserves dropping to £64m.

This means the council will be ‘technically insolvent’ when the statutory override on DSG deficits finishes in March 2026.

The finance director said the discussions with the Department for Education over the Safety Valve programme have ‘stalled because of the size of our financial challenge’.

The letter, dated May 22 during the pre-election period, said: “In addition to this accumulated deficit potentially crystallising from 1 April 2026, we are also facing a severe shortage of cash, which looks likely to create a financial emergency for the council before the statutory override finishes.”

He said this could be resolved by either the DfE or DLUHC providing cash to fund the accumulated deficit until an alternative solution is found.

“I am therefore writing, to draw these figures to your attention and to request that you give urgent consideration to the support that government can give BCP Council to manage this shortfall in funding and to consider solutions that would prevent the cashflow crisis that I have outlined above,” Mr Richens said.

“Without government support it is currently my judgement that BCP Council will be unable to continue to support either the accumulated or growing annual deficit on its DSG and will be unable to set a legally balanced budget for 2025/26 because of the forecast cash shortage.

“In such circumstances I am legally required to consider the necessity for statutory intervention.”