Blackpool Council says it is safe for now from any risk of bankruptcy as budget pressures ease

Coun Lynn Williams told a meeting of the full council the town hall was now forecast to overspend on its current budget by £1.1m – compared to previous forecasts of £4.9m.

There is also a revised forecast for working balances (money held in reserve) of £5.6m.

It comes after Nottingham City Council became the latest local authority to issue a section 114 notice, effectively declaring itself bankrupt and only able to fund essential services.

However the meeting heard financial challenges remained with spending on children’s social care over budget by £6m, while adult social care is expected to overspend by £3.5m. School transport is set to overspend by £500,000.

But savings of nearly £3m have been made in other services, £2.2m no longer needs to be transferred to reserves and the cost of staff pay rises will be offset by savings on electricity tariffs.

Coun Paul Galley, leader of the Conservative group, said it still felt like a “sticking plaster” was hiding the “real issues”.

He added: “We need to reform what we are doing with children’s services and adult services.”

Coun Williams said the issues Blackpool faced in funding social care reflected challenges all councils were trying to tackle.

She said: “It is incredibly clear to government that both adult and children’s services need additional investment.”

Coun Williams said the government was investing in tax cuts ahead of funding council services properly.

Around 40 councils have been reported as declaring or being about to formally declare financial difficulties.

In response a Levelling Up, Housing and Communities Committee has been set up to investigate the level of financial distress across local authorities with Blackpool Council being invited to present evidence.