MAJOR schemes proposed by the council could have to come ‘under the microscope’ as it faces a £40 million funding shortfall.

The Labour-run authority continues to call on the Government to reimburse it fully for coronavirus-related costs and loss of income.

Of the Government’s emergency £3.2 billion for local authorities, Warrington was allocated around £11.1 million.

However, it expects its costs and loss of income due to Covid-19 to total around £51.5 million.

Council leader Cllr Russ Bowden discussed the prospect of planned schemes not going ahead.

He said: “Anything which isn’t invest to save or income-generating would obviously come under the microscope.

“Anything which is additional capital investment by the council would have to come under the microscope and be properly scrutinised but hopefully it won’t come to that.”

A finance update report – which will come before the cabinet next Monday – says the council currently faces a shortfall of £40.4 million.

It said there has been no further direct clarity on the specific level and nature of support for increased costs and lost income.

“The council’s section 151 officer and his finance team continue to assess the risks to the council’s financial resilience in light of Covid-19,” it added.

“Potential risks to the setting of a balanced budget for 2021-22 will be critically assessed.

“The statutory requirement, where an unstable financial position is forecast, is for the section 151 officer to issue a section 114 notice.

“However, CIPFA has warned against this as this course of action was not designed to respond to emergency situations and it would have the effect of freezing expenditure in the midst of a global crisis.

“A more detailed report on the budget will be presented to July cabinet.”

If issued by a council, a section 114 notice bans all non-essential expenditure.

It is a formal admission that an authority cannot meet its current expenditure – and would stop all spending apart from on statutory services, such as social services.

Last month, Conservative Warrington South MP Andy Carter said the settlement for all councils this year was the ‘most generous’ of the last decade.