A GOVERNMENT minister has told BCP Council’s leader he still has “significant concerns” over the financial strategic direction of the local authority.

Cllr Drew Mellor has been urged to assess “what action is needed to ensure the council remains in a sustainable position”.

The warning comes in the latest correspondence sent by Minister of State at the Department for Levelling Up, Housing and Communities Paul Scully MP.

In the letter, which is dated Friday, September 2, Mr Scully said he is minded to offer the council “in-principle support” of up to £20million of borrowing in the current financial year through a capitalisation directions.

He stresses while the letter outlines the Government’s current position, not the capitalisation direction itself, which are often sought by local authorities in financial difficulty.

BCP Council chiefs have requested permission to borrow £76million over the next three years to fund its transformation programme.

However, Mr Scully has said government will not consider requests for support in 2023/24 and 2024/25 at this stage.

The Conservative minister’s letter said: “I want to reiterate that I continue to have significant concerns about the present financial strategic direction of the Council and urge you to consider what action is needed to ensure the Council remains in a sustainable position.”

Mr Scully’s letter, which comes ahead of a scrutiny meeting on council finances, says the principle support is subject to the authority agreeing to a series of conditions, including producing a full plan to address the budget gap in 2023/24 and beyond, which needs to be shared with the government by the end of the month.

It also requires the council to undergo an external assurance review of its finances and governance arrangements this autumn.

The politician has warned that further conditions might apply to a capitalisation direction for 2022/23, should it be confirmed.

Any borrowing from the Public Works Loans Board for the capitalisation direction could be at an interest rate of one per cent more than the usual level.

Any final decision on the exceptional financial support will only be made after the competition of the external assurance review.

Mr Scully’s letter concluded: “It is my view that the Council should now be making the necessary plans and arrangements to secure its short- and medium-term future.

“Going forward, it is essential that the Council is able to offer long term security and reassurance to local residents.

“My officials and I look forward to continuing to work with you and your officers.”