Cumberland Council: External Assurance Review

The council should ensure that there are service plans in place for the start of the 2024/25 financial year and should institute formal performance reporting at least quarterly to the Executive.

The council should also refocus its budget in the areas where costs are above average against its nearest neighbours or where significant pressures are being observed with the aim of generating savings that can address the budget deficit or be re-invested in the areas of Education, Adult and Childrens Social Care and Public Health.

The council should undertake an overview of the needs of the area to fully inform its council Plan

The council should introduce a budget recovery plan with oversight from a Recovery Board and immediately freeze all non-essential revenue and capital spending. The plan needs to be supported by external expertise.

The council's budget consultation exercise should focus on seeking the public's view on how a balanced budget for 2024/25 should be achieved and recognise that any improvement in service delivery will have to be deferred until a balanced budget has been delivered.

The council should suspend its Transformation programme until it is confident of achieving a balanced budget unless any current transformation projects definitively assist in that. This should form part of the Budget Recovery plan.

The Budget Recovery Plan should include a review of Sales, Fees and Charges with the aim of increasing the yield the council achieves to at least the Unitary council average.

The council should call a special emergency Council Meeting or ensure a full briefing at forthcoming Executive or Full Council to provide the opportunity for the Chief Executive to lay out the full implications of the council's financial situation for all Members and set the scope for the Budget recovery Plan.

The council should plan to maximise its Council Tax income over the medium term.

The Audit Committee should ensure it has the arrangements in place to challenge the Executive and there should be a strong independent presence on the Committee.

The position of finance and the statutory officers should be strengthened and the 'golden triangle' of statutory officers created to ensure a full role in corporate leadership on the issue.

There should be a review of the roles of the statutory officers and the capacity of the finance function to ensure it can deliver the financial support the council needs in a timely way and identify appropriate investment in the team where necessary.

Performance management should be reviewed for its relevance and value in decision making. The focus of and reporting to the Executive should be standardised and regularised.

We would strongly recommend that the council completes its review of the capital programme and the need for additional borrowing before it sets its revenue budget for 2024/25 with a focus on reducing the future burden on the revenue budget.

The review of the capital programme should include reviewing the management of the programme and the need for investment in capacity.

Work on the matching of the existing loans portfolio to the council's borrowing needs to be completed in the short term; also determining the appropriate MRP calculation.

The council should not take on any further borrowing until it can demonstrate that it can balance its budget over the medium term period.

The council should ensure it robustly reviews its earmarked reserves and investments to increase the General Balance reserves and address pressures.

The council should recognise that its 2024/25 budget is unlikely to be balanced given the lack of confidence in delivering savings, the limited reserves to cover any shortfall and other uncertainties the council must make provision for. If the council seeks further use of Exceptional Financial Support, it should ensure this is managed by an adequately experienced and resourced Recovery Board.

The council should prepare an asset disposal plan to generate capital receipts in the short term.