COUNCIL chiefs were told this week that they must accept the findings of a Government report into its finances and request £1.5 million in support to avoid the local authority equivalent of bankruptcy.

Copeland Borough Council’s financial position has been severely impacted for a number of years by a hefty business rates appeal from Sellafield, a cyber attack and the withdrawal of financial support from the UK Government.

A special meeting of the borough council took place on Thursday to discuss a report commissioned by Government and carried out by CIPFA, on the council’s financial situation.

The 39 page report revealed the “significant risk” of Copeland’s financial situation which could include a Section 114 notice – the council equivalent of bankruptcy.

Councillors met this week to agree their response to Government, which Minister for Levelling-Up Kemi Badenoch MP asked for within 30 days.

Chief Finance Officer Steven Brown recommended that the council request an immediate capitalisation directive of £1.5 million from Government, this is a portion of the £5 million in borrowing already accrued by Copeland and would simply give the legal authority to use it.

Mr Brown said: “As you’re aware, our reserves are reducing but a capitalisation directive of £1.5 million means our reserves are protected a little bit more, it means we don’t need to use the reserves as much.

“It provides us resilience in the final year of the council and I believe ensures that Copeland finishes well.

“As you know reserves are there for earmarked events and one-off events. The more reserves we have, the greater our resilience against any risks that might occur.”

In a letter accompanying the CIPFA report, Ms Badenoch asked Copeland Council to accept its findings and set out what support would be needed from Government.

Mr Brown recommended that the council agrees to response and explain how they intend to balance the budget in the short term.

Mr Brown said: “Unfortunately when they issued that report that came very close to setting the budget as well.

“As you know, we need to take the report to council in February, seek to set a budget for 2022/23, we need to know where we are with that capitalisation directive.

“My recommendation is that we are in broad terms accepting all the recommendations in this report. There is some nuances in this report that I don’t think quite reflect where we are but I don’t think that deters from us accepting this report.”

Executive member, Cllr Steven Morgan said: “This is a very important topic, we shouldn’t make it political, we shouldn’t make it personal.

“I’d like to make a point to Mr Brown as one senior professional financial officer to another. Are you saying that if your proposal is approved, in the near term we won’t fall into a Section 114 situation, is that correct?

Mr Brown said: “Yes councillor that’s correct.”

Members agreed to accept the report and delegate authority to finance officers to respond.

Councillors heard of the increasing pressures facing the authority’s coffers whilst financial support dwindles.

The Revenue Support Grant, which is given to Local Authorities by Government, stood at £3.3 million for Copeland in 2013/14 but by 2018/19 it had reduced to £0.4 million. In 2019/2020 it was completely withdrawn.