A STARK warning Surrey County Council faces a financial shortfall of £94m by March 2021 has been delivered by money experts following an independent review.

Surrey CC has just published a report it commissioned from the Chartered Institute of Public Finance and Accountancy (CIPFA), which warned: “There are no plans currently in place to resolve the data uncertainties in the estimates for 2018-19 and no ‘plan B’ to deal with unanticipated demand increases or the possible failure to deliver some of the proposed savings.

“Surrey is in a difficult financial position.

“Despite repeated cost reductions, the expected increase in service pressures means that, as things stand, the council will not have sufficient reserves to meet its expected budget gap in 2019-20 unless it acts now.”

CIPFA has urged the council to fundamentally reform how it ‘provides services’ in order to make the necessary savings.

The report noted a series of ‘transformative projects’ currently being developed which are due to be considered in October 2018.

It acknowledges some of these initiatives will necessitate ‘difficult decisions,’ but recommends the potential costs and benefits are ‘specified clearly and that implementation is not deferred.’

CIPFA found Surrey’s gross expenditure is expected to increase by 6.5 per cent from £1.68billion in 2017-18 to £1.79billion in 2020-21, while gross funding is expected to increase by only 2.4 per cent from £1.66billion to £1.7billion over the same period.

That would result in a funding gap of £36million in 2018-19, rising to £86million by March 2020, and to £94million by March 2021.

The report concluded it was ‘crucial that Surrey delivered the efficiency savings in the current financial year, but considered the finance team lacked ‘sufficient drive and initiative to tackle the issues.’

Northamptonshire became the first local authority to run out of money earlier this year forcing Whitehall to send in civil servants to run its council.

In order to tacke its own financial difficulties, Surrey has been advised to restructure its finance team so it has a more dynamic, central role in driving change across the organisation.

It needs to build a ‘more robust approach’ to business management so any changes can be sustained.

Surrey’s Tory leader David Hodge said: “It’s well-known local government budgets across the country are under severe pressure. However we have a duty to ensure the council remains as financially sound as possible in these unprecedented times and that’s why we asked CIPFA to do this review.

“While we have achieved a balanced budget or small underspend in the past eight years we actively wanted our financial situation to be independently challenged.

“We know there is much more to do to make our finances sustainable and able to withstand the huge pressures in adult and children’s services that we’ll continue to face into the future.

“But with a new senior team leading the council, including an interim director of finance, we’re taking all the right steps to achieve this. That includes work to transform services around residents’ needs, bolstering skills and capacity in the finance team and a review of our Orbis partnership looking at how things can be done better.

“It’s critical we discharge our responsibility to residents and ensure every penny of council tax is spent as effectively as possible.”