Peterborough City Council warned by minister over finances

A review of Peterborough City Council finances found the challenges were significant

A council has been given a warning from the local government minister because of the state of its finances.

The review of Peterborough City Council's accounts by an external team found the financial challenges were "significant and urgent".

Kemi Badenoch, Minister for Levelling Up Communities, said she was concerned the council had not "fully grasped" its financial problems.

The council said it was already working on recommendations in the report.

Peterborough was one of four councils in England that the government agreed could be given emergency funding because they were unable to balance their books.

The then communities secretary, Robert Jenrick, said the authorities would be subject to "rigorous reviews" of their finances.

A report by the Chartered Institute of Public Finance and Accountancy (CIPFA) found Peterborough City Council had "continued to increase its net service spend and spend on capital projects".

Kemi Badenoch became the Minister for Levelling Up Communities in the September reshuffle

"None of the political parties has overall control of the council and the political uncertainty is exacerbated by holding elections in thirds, which means that the main parties are always focussed on the next election," the report said.

But CIPFA said providing the council with the emergency funding would "provide financial resilience".

Among the report's recommendations was that the council should immediately halt any capital spend funded by borrowing and look at alternative uses of retail assets.

• The remarkable rise of the independents

• Bin collection delays linked to driver shortage

• English councils battling financial ruin

In her letter to the council's leader, Ms Badenoch said: "I am... concerned that the scale of financial challenge facing the council is not yet fully grasped and that further steps can be taken by the council to remedy the situation.

"I trust that the findings will help you to focus your council on activity that will lead to sustainable change."

Wayne Fitzgerald, leader of Peterborough City Council, said "very difficult choices are ahead" for the authority

The Conservative minister said the council should set out the steps it would take "in the immediate and longer term" to respond to concerns about its finances.

"Any faltering in this area would be of considerable concern and could lead to a reconsideration as to whether a different approach might be appropriate to secure the improvements that are necessary," she said.

Wayne Fitzgerald, leader of Peterborough City Council, said: "This is a serious report with some important recommendations for us to consider.

"We have already been actively working on many of the areas that the recommendations cover."

He said work already undertaken by the council meant it would not be seeking any further exceptional financial support in this financial year.

Conservative Mr Fitzgerald said he would work with the government, CIPFA, and the council's new improvement board to "get the council to a position of financial sustainability as quickly as possible".