BCP Council set to avoid need to borrow money from Government

The local authority has sold assets “ahead of their valuation targets” to plug the £18million in current year’s transformation programme budget.

This financial predicament came to the fore last summer when a Government minister changed legislation and blocked the council’s plans to sell thousands of beach huts to a company it would majority or wholly own.

Following this, BCP Council obtained a £20million ‘mind to’ capitalisation direction from Government before senior councillors changed tack and explored the sale of assets in favour of borrowing.

A paper to yesterday’s cabinet meeting, which was dated March 7, said the current forecast receipt from Wessex Trade Centre in Poole and 13 of the 16 lots at Airfield Industrial Estate in Christchurch was £21.1million.

The three remaining Airfield Industrial Estate lots will likely be sold in the next financial year.

As reported, the council had assumed £1.92million spent on children’s services transformation could only be covered through the borrowing option.

However, officers are carrying out “additional assurance work” to consider if it could be covered via an alternative stream, namely any further increase in the “surplus” from the 2022/23 forecast outturn, which currently stands at £10.6million, or flexible use of capital receipts.

• Read more BCP Council budget plans attract warning from Government

In a letter to minister for local government Lee Rowley MP dated March 3, BCP Council leader Cllr Philip Broadhead wrote he could give assurance that the “welcome backup of financial support from Government should not be needed” following the asset sales.

Cllr Philip Broadhead (Image: BCP Council)

Cllr Broadhead said it was likely around £6million in asset sales will be needed for the 2023/24 transformation programme and there were “ample assets” available to achieve this.

“I am therefore confident that no further government support or capitalisation direction will be needed in this regard next year as well,” Cllr Broadhead’s letter said.

Cllr Broadhead told the Daily Echo: “The summary from us is we have tackled the inflationary environment this year head on leaving us with a £10million surplus and we acted very quickly when the Government changed the legislation last year (after the beach hut proposal).

“I think it is a really strong, positive statement to be making that it is looking very likely that we do not have to take them up on that ‘mind to’ offer any help not just this year but hopefully next year as well.

“It is a testament to the hard work of the team.”