No, Lancashire County Council is not on the brink of bankruptcy
PLUS: Lancashire man in court after Pontins incident in Somerset
Hello and welcome to The Lancashire Lead.
If you are a new subscriber who has joined because you will be attending our hustings this evening - welcome! We’re glad to be doing a small part to get people to engage with politics. It might feel like a low stakes set of elections - given LCC will likely not exist reasonably soon - but they are still important.
Today we focus on claims from Nigel Farage that Lancashire County Council is on the brink of bankruptcy.
He was, of course, likely exaggerating for effect but there is a reason that many councils carry debts. That’s not to say other models for funding improvements wouldn’t work - or that the spending has been effective. Readers can make their own judgements on those things.
He has also not actually put forward any suggestions for what improvements Reform UK would make - nor have we heard them from local candidates just yet, though that may change at our debate this evening. And it misses the context that council funding from government has fallen by 46% in real terms since 2010.
Also in today’s issue - a Lancashire man will be in court in connection with the death of a woman at Pontins in 2019.
Lancashire County Council’s debts ‘essential’ to provide services that they don’t receive funding for
By Paul Faulkner
The deputy leader of Lancashire County Council has defended the authority’s debt levels after Nigel Farage claimed it was on the brink of “bankruptcy”.
Alan Vincent said the borrowed money was being used to fund key projects and assets that benefit residents – and insisted County Hall’s finances were sound.
The Reform UK leader made the allegation during a campaign visit to West Lancashire on Wednesday, ahead of next month’s local elections. He said that it was costing the county council £135,000 a day in interest payments to service its borrowing needs.
The actual figure is around £100,000, but Farage’s broader point was that the ruling Conservative group had got the authority it has controlled for the last eight years into what he described as “the most awful mess”.
He said residents were paying the price for a county council that was “hugely in debt [and] frankly on the verge of bankruptcy”.
However, County Cllr Vincent – who is also the cabinet member for resources – has hit back at that characterisation and justified how much debt the authority holds. Budget papers reveal that during 2025/26, it will need financing to the tune of £1.2bn.
County Cllr Vincent said: “Our debt equates to less than £1,000 per head of our population – a figure much less than many much smaller authorities than ours across the North and Midlands.
“It builds essential schools, adds SEND [special educational needs and disabilities] units to benefit our most vulnerable children and buys a fleet of buses to take our kids to school.
“It builds and acquires care homes in Lancashire for children unfortunate enough to need them and… it does all of that whilst, at the same time, frequently actually cuts our costs – thus saving money.
“Mr. Farage seems to think Lancashire County Council empties bins and is on the brink of bankruptcy – neither of these things are remotely true.
“The public need to think carefully about whether the lack of even a basic knowledge of how local government works makes Reform a party they could put in charge of their hard-earned cash,” he added.
Lancashire County Council’s borrowing covers what is known as ‘capital’ spending on infrastructure, as opposed to the cost of day-to-day services, which are paid for by a combination of council tax, government grants and other sources of income. It plans to spend £299m on capital projects this year and £169m the next.
At its budget meeting in February, the authority acknowledged it will need to save £103m within the next two years – £51m of which is cost-cutting planned for, but not delivered, during 2024/25.
It is also facing demand pressures of £42m and inflationary costs of £33m in the 12 months ahead.
The county council will need to use £1.5m from its reserves to bridge a financial gap in the current year, but expects to to set a balanced budget for 2026/27. Its transitional reserve pot – currently standing at £125m – has been deemed sufficient to enable the authority to continue to operate as “a going concern”.
A spokesperson for the authority said: “It is incorrect to say that Lancashire County Council is on the brink of bankruptcy.
“In February the council set its annual budget which demonstrated that the council can fund all the services that it plans to deliver, with additional reserves of £250m available.
“The council also has assets of £3.5bn, including a wide range of land and buildings such as schools, waste processing sites, libraries, care homes, highways and other local infrastructure.
“The council has over many years borrowed at competitive rates to own and maintain these as we don’t generally receive funding for that.
“Like a domestic mortgage, the council evaluates whether it can afford to borrow to own and use these assets.
“Currently the council pays interest of around £100k a day for this borrowing, which enables us to continue to have these priority resources available to our communities.”
The authority said earlier this year it was attempting to “minimise” its new borrowing – expected to total £693m during 2025/26 – until interest rates had stabilised.
We’re delighted to say Cosy Homes in Lancashire is supporting independent, in-depth journalism in Lancashire by sponsoring The Lancashire Lead. Discover how they can help you improve energy efficiency in your home and keep it warmer.
Recommended reads this week
💩 Reach plc’s data unit have put together an interactive map that lets you see the 16,000 sewage spills into rivers and streams across Lancashire in 2024. That’s featured on LancsLive here.
🚢 Peel Ports Group, which owns Heysham Port, has appointed a host of contractors into its new construction framework, covering a major programme of construction works across its UK and Ireland sites, worth up to £750 million. Michelle at the Lancaster Guardian has the latest.
🐢 Turtle Bay has issued a statement after closing its Blackburn site following eight years of business. It’s a troubled time for hospitality - with chains especially badly hit at the moment. Sarah at the LT has an update.
Leyland man charged in relation to death of holiday maker at Pontins
By Jamie Lopez
A South Ribble man has been charged alongside the owners of Pontins in relation to the death of a holiday maker.
Keep reading with a 7-day free trial
Subscribe to The Lancashire Lead to keep reading this post and get 7 days of free access to the full post archives.