CITY council bosses have instructed officers to find a funding source for £1.6 million - their contribution to the local government reform process.

Carlisle City Council's executive met at the Civic Centre on Monday, receiving reports about budgeting and finances.

Executive members were told by deputy leader Gareth Ellis that a £1.6 million contribution will be required from the city council as its share of the County Wide Implementation Reserve.

The existing Local Authorities will cease to exist by 2023 when they are replaced by two unitary authorities, Cumberland Council and Westmorland & Furness Council.

All seven existing Cumbrian authorities are required to contribute to a county-wide reserve which will be used to cover the £18 million estimated cost of implementing the two new councils.

Councillor Ellis pointed out that local government reorganisation potentially makes savings in the long-run between £19.1 and £31.6 million annually.

He said that this can be achieved by reducing bureaucracy and unnecessary posts, redirecting funds to improvement of services like health and social care and bin collections.

Cllr Ellis told executive members: "We were always aware that this would involve costs, we've been asked to contribute £1.6 million to the County Wide Implementation Reserve.

"What's important if you look at the consequences of this, is that the proposed unitary authorities are anticipated to save between £19m and £31 million a year.

"That's money that's spent on better administration and on better services which is what we're here for."

He said that in contrast, the implementation costs are a one-off.

Leader of the council John Mallinson seconded Cllr Ellis' motion.

He said: "Just to endorse what Cllr Ellis has said, there is an upfront cost to the LGR process and Government had been quite clear that cost should fall to the participating authorities and of course the benefits will be in the disposal of the two unitary authorities. As an investment project it's really money well spent."

The unanimous vote, means that councillors will instruct the Corporate Director of Finance and Resources to seek a funding source for the contribution, dipping into the council's £3.2 million of reserves.

Cllr Ellis said: "What's important when we spend this money is that we do it properly. We're spending money and it's upfront but it's going to save in the long term."

A Revenue Budget report was also presented to the executive. In a rundown of significant items on the council's balance sheet it was revealed that loans were responsible for £13.30 million in March which fell to £13.06 million in September.

The debtors system was responsible for £1.38 million in March and £1.24 million in September. The report said: "There may be a significant impact on the cash flow of the council if outstanding debts are not received.

"The level of outstanding debt has increased during the pandemic and although a 'soft' debt recovery process was initially agreed whereby letters were issued asking debtors to contact the council to discuss flexible repayment terms, and a signpost to the CTRS scheme for council tax payers, more formal debt recovery procedures are now in place in order to safeguard the council's cash position."