COUNTY finance bosses will still beface a funding black hole of nearly £80million even after closing libraries and museums and being forced to make more key cuts, says an auditor’s report.

Independent auditor PriceWaterhouseCooper has also warned the county council it could run the risk of an intervention by the communities secretary if it fails to deliver statutory services.

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Two key questions have been posed by the auditor - the first asking whether the current local government funding formula is fair for Lancashire - and whether ‘more radical’ cuts options need to be considered in future.

Cllr David Borrow, the council’s deputy leader, has insisted that the authority’s own reserves will run out in 2018-19.

He said: “This sets out in stark relief the scale of the challenge we face. The report has identified that the council will need to make savings of £148million in 2020/21, even allowing for council tax increases of 3.99 per cent every year for the next four years.”

This would be the position even if the council achieved all of its saving targets over the next four years and reduced spending to the lowest levels, he added.

Cllr Borrow said: “This independent confirmation that our finances, like those of many other councils, are clearly not sustainable will help us to make the case to Government that it needs to rethink how it supports councils.”

In comparison to other county councils, Lancashire also recoups the third lowest amount of council tax and also has the third lowest bills for the charge.

County Cllr Paul White, who represents Pendle Central division for the Conservatives, said the report alone cost £6million, typifying the “waste” at County Hall.

He said: “This is a Labour Party-commissioned report, so I don’t think I’m particularly surprised by the findings of fear in it.

“What it does show though is that the county council needs some good financial management at the top, because so far the administration is missing even its own targets.

Cllr White also criticised the council for still retaining £300million in reserves at the start of the year.

He said: “They paid £6million for a report. How can anybody justify that as good value to the taxpayers of Lancashire? Do the public not elect councillors to make decisions for them?”