Waiting game on if BCP Council needs to borrow government money

It has been confirmed that if a final decision is needed on taking the financial support, it will be made by the new administration after the local elections on Thursday, May 4.

Last month officers appeared confident that money generated from selling assets above expected values would ensure BCP Council avoided taking up the capitalisation direction.

Councillors signed off on the plan to sell sites, including Wessex Trade Centre in Poole and Airfield Industrial Estate in Christchurch, several months ago.

This was deemed necessary to plug an £18million hole in the 2022/23 transformation programme budget following the collapse of the beach hut sell off plan last summer.

As reported, the assets sold “ahead of their valuation targets”.

However, the council is still not been able to confirm that it had been able to avoid borrowing money from government.

In a statement issued to the Daily Echo, a BCP Council spokesperson said: “We’re currently working to close down the council’s end-of-year accounts and, while we are in a better financial position following some recent successful asset sales, we won’t be able to confirm whether we need to call on the capitalisation direction until that work is completed.

“Any final decision would be a matter for the new administration after May’s elections.”

• Read more: Councillor responsible for finance says borrowing from government looks unlikely

In July last year, then council leader Cllr Drew Mellor first revealed the prospect of borrowing from government to fund transformation after ministers stepped in to block the plan to sell thousands of beach huts to a company wholly or majority owned by the local authority.

Cllr Drew Mellor (Image: BCP Council)

At the time, Cllr Mellor said the Department for Levelling Up, Housing & Communities was allowing BCP Council “to be an exemplar of local government reorganisation as a success story”.

Several months later, the Conservative administration brought forward plans to sell assets in favour of borrowing from government.

During a cabinet meeting in January, Cllr Philip Broadhead, then deputy leader and now leader of the council, said the yearly costs of accepting the capitalisation direction would be “far greater” than the income from asset sales and council tax would have to be raised by the “maximum amount” if it took up the offer from government.

Despite taking the course to try to avoid borrowing, residents’ core council tax for 2023/24 was raised by the highest level available without requiring a referendum.