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Councils at risk of financial collapse ; SW councils risk financial meltdown, report warns [Western Morning News (England)]
[January 21, 2014]

Councils at risk of financial collapse ; SW councils risk financial meltdown, report warns [Western Morning News (England)]

(Western Morning News (England) Via Acquire Media NewsEdge) Some councils in the South West risk collapse following deep cuts to Government services, a leading auditor has war ned.

A financial "health check" carried by Grant Thornton accountants has found the region's authorities are the most "at risk" in England.

As it warned councils face a "tipping point" from 2016 - which could mean failing to deliver basic services including rubbish collection - MPs from Devon and Cornwall threatened to rebel against the Gover nment.

Grant Thornton's analysis appears to chime with concern among shires MPs backing the Rural Fair Share campaign, which argues urban councils receive 50% more funding per head than rural authorities. One of those, Devon Tory MP Neil Parish, said he wanted "my troops to be ready and rebel if we need too" if ministers ignored their pleas.

Grant Thornton, which did not name councils, found the South West had the lowest rating for both financial performance and financial con-trol, and the second lowest ranking for both strategic financial planning and financial gover nance. John Golding, head of public sector assurance at Grant Thornton in the South West, said: "As funding reductions start to bite harder and deeper after 2015, councils will be faced with a great challenge. "More tough decisions will be needed on whether optional services can still be provided and how more income can be raised. Even after all of this, the public will need to understand that service quantity will need to be reduced and may never return to its pre-2010 levels'." In December, Local Government Minister Brandon Lewis announced an average 2.9% cut in the "spending power" for local authorities from April 2014, and the same again for the following year. Sparse are councils will receive a share of a Pounds 9.5 million grant in recognition of underfunding and incurring extra transport costs.

The Rural Fair Share campaign feels this is not enough to save some councils from peril. On BBC's Sunday Politics South West, Mr Parish, MP for Tiverton and Honiton, indicated he was willing to vote against the financial settlement - a dramatic step for an MP from a governing party. Mr Parish said they are "getting somewhere" with ministers, but "whether we will have enough, I don't know". He added: "That's why I want my troops to be ready and rebel if we need too. The Government needs to take it seriously. That we mean business in the Westcountry." Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said he will be "thinking very carefully whether to support the Government".

"Rural services are really suffering," he said. Councillor Philip Collins, independent leader of Torridge Council in Devon, said: "We are a very poor area, lowest waged in the UK, we don't get the same funding you do in some of the urban areas - it's 50% less yet we've probably got three times more distance to travel down here when we collect refuge and do all the services we do." Councillor Alex Folkes, Liberal Democrat cabinet member for finance on Cornwall Council, said the economies of scale of a large council, together with the efficiencies that it has already put in place, means that Cornwall is "not one of the authorities said to be at risk of financial collapse" in the report. But he added cuts could be eased if the Government "moved to allocate funding on a fairer basis, treating rural and urban councils on a level playing field.

'Service quantity will need to be cut and may never return to pre- 2010 levels' John Golding, Grant Thornton (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.

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