Westmorland and Furness Council has admitted it must find £40 million in savings and efficiencies over the next three years or face what council officers describe as the inevitable prospect of a Section 114 notice – effectively the local government equivalent of bankruptcy.
The stark warning will be made to members of the councils corporate scrutiny committee meeting in Kendal on Thursday and represents one of the clearest acknowledgements yet of the financial pressures facing the authority.
Council officers state that current spending levels are "unsustainable" and that around £40 million of efficiencies must be identified and delivered over the next three years including an immediate additional £5 million in savings required this year with a warning that a Section 114 this notice will be "inevitable without change".
The admission comes as the council is already attempting to deliver more than £30 million of savings during the current financial year simply to balance its books.
Just three years after the launch of the new unitary authority, council leaders are now pinning their hopes on a major transformation programme designed to overhaul the way services are delivered, reduce costs and improve efficiency across the organisation.
The programme includes restructuring management, redesigning services, increasing the use of digital technology and changing the way residents interact with the council.
The financial challenge facing the authority is being driven by a combination of rising costs and growing demand for services. Council documents highlight significant projected growth in the number of older residents over the coming years, placing increasing pressure on adult social care budgets and other frontline services.
Behind the scenes, officers have also identified the risks should the transformation programme fail. These include widening budget deficits, increasing reliance on short-term financial measures, reduced investment in services, worsening customer satisfaction, pressure on staff and difficulties meeting statutory obligations.
While council leaders insist the transformation programme will create a financially sustainable authority for the future, the figures contained within the documents reveal the scale of the challenge ahead.
For residents across Westmorland and Furness, the message from the council's own papers is difficult to ignore. Unless the authority can successfully deliver around £40 million of savings and efficiencies within the next three years, officers believe it is heading towards the local government equivalent of bankruptcy that will significantly impact front line daily service from adult social care to children’s services, emptying the bins to libraries.
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