Councils in Devon and Cornwall 'may struggle to balance books'
Councils in the Westcountry have escaped the worst of the funding cuts under the Government's austerity drive – but some authorities are still poorer by around £100 per head of population.
The Audit Commission has warned that more than a third of local authorities may struggle to balance their books over the coming years as they adjust to funding cuts.
It raised concerns that the financial health of 12% of councils presented an "ongoing risk" which meant they were not well-placed to deliver their plans in 2012/13 or in the medium-term.
A further 25% were well-placed to stick to their plans for the current financial year but "less so" for the rest of their medium-term plans, the spending watchdog said.
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In a report – entitled Tough Times 2012 – it also described how the most deprived areas had suffered the biggest cuts since 2010, although they still received more per resident than in more affluent areas.
The commission crunched figures for the Western Morning News on the impact felt by the four upper tier authorities in Devon and Cornwall, but warned the bleak figures did not necessarily mean they were struggling.
Cornwall Council has seen a drop in government income of 9% over two years to 2012/13, or £97 per capita. Torbay Council was down by 8.9%, or £98 per head less, and Plymouth City Council was down 8%, or £79 per capita fall. Devon County Council's Whitehall support was cut 5%, or £40 less. By contrast, the cut was 21% in the North East compared, or the equivalent of a £159 per person drop.
Yet the South West on average receives £282 per person, while inner London gets £902 per person and the North East £598 per person.
The Audit Commission stressed that the majority of councils had coped well with their reduced settlements and many had even put additional money into their reserves – a total of £1.3 billion in 2011/12.
But a "significant minority" had been forced to find additional funding, restructure their savings programmes or find extra cuts in order to meet their plans, it said.
Jeremy Newman, chairman of the Audit Commission, said: "On the whole, councils have worked hard to cope with reductions in funding, and have reserves available for future challenges, including further funding changes in 2013.
"However, auditors expressed concerns about a number of councils that have already shown signs of stress."