EXTERNAL auditors have found some “significant weaknesses” remain at BCP Council one year on from a highly critical report. 

Grant Thornton UK LLP has re-expressed concern at the local authority’s medium-term financial plan, but said just one concern remains open and the others have been resolved. 

On financial sustainability, the report noted “good progress” since the last inspection, but the budget could be improved by “returning to a more conventional and traditional budget setting process”. 

The report identified two new “significant” weaknesses, including the dedicated schools grant deficit of £63.2m.

BCP Council has been unable to secure an agreement with the government to lessen this which could lead to insolvency by 2026. 

And the second weakness the report found is “primarily driven by the DSG deficit” and it’s the council’s “severe cash shortage”. 

Auditors warned it is “set to create a financial emergency before the current statutory override expiry date of March 31, 2026”. 

However, the auditor has found some improvements since the inspection 12 months ago: “significant” progress has been made on decision-making processes as well as the efficiency and effectiveness within the authority. 

Nigel Stannard, BCP’s head of audit and management assurance, said: “Three key recommendations were made to address significant weaknesses (two covering financial sustainability and one covering improving economy, efficiency and effectiveness)."

A further three improvement recommendations were made, and 31 previous recommendations from 2020/21, 2021/22 and 2022/23 were followed up (23 implemented and remaining eight being addressed).  

“The council has provided the external auditor with management responses to all the recommendations. 

“Grant Thornton anticipate concluding their opinion on the financial statements by the end of October 2024.” 

Last year, Grant Thornton’s view was that the council had continued to adopt “a high-risk alternative funding strategy” to deliver transformation efficiencies, minimise council tax increases and avoid significant cuts to services in the past two years. 

But since then, there has been a five per cent council tax increase and made numerous cuts to council services to save 94 per cent of £34m in this year’s budget. 

Cabinet member for finance Mike Cox said: “Although we have balanced the budget for this year and the next few years, we have zero resilience reserves left to fall back on.  

“The financial position of the council, while being stabilised is still in a weak position and we cannot relax, [but need to] keep a firm grip on the finances.”