Council finance chiefs have been left extremely uncertain over how services will be funded in future because of the Brexit stalemate.

A meeting of South Lakeland District Council was told that planning its financial budgets for the next five years had been mired in guesswork.

Councillor Andrew Jarvis, the cabinet member for finance, said it had left them making assumptions about how much cash the council could have.

It follows a Government delay in revealing how town halls will be funded over the next decade, he said.

A comprehensive spending review was intended to settle the matter with councils expecting to find out at Christmas what they would receive over the next four years.

But the review had not taken place following the failure to get a Brexit deal through Parliament. 

It had also cast doubt over a Treasury stockpile of £26 billion which would be needed if Britain crashes out of the EU without a deal, the meeting heard.

Addressing a cross-party committee of councillors which scrutinises SLDC’s work, Coun Jarvis said: “The key issue we face at this moment is the very high level of uncertainty.

"This uncertainty has a far greater impact on the council’s financial position in both the short and long term.

“A no deal outcome will have a very severe short-term impact on the economy and will make it smaller in the long term. That means less tax revenue, less Government spending and probably lower finances for local Government.”

The council has forecast a deficit of £625,000 for 2020-21, growing to just under £2 million by 2023-24, which it now planned to address.

Coun Jarvis, the Liberal Democrat member for Windermere, said: “Over the next four months I will be working with cabinet and the senior leadership of the council to focus on options for closing the projected deficit in the short term and identifying a programme of actions to potentially deliver significant savings and move us closer to a balanced budget for the long term.

“Throughout all this, our focus will remain on delivering high-quality services, while ensuring we act to protect the long-term financial health of this council.”

Committee member Coun Doug Rathbone said town halls faced a climate of uncertainty.

“I don’t see what else we can do apart from planning for as many contingencies as possible,” said Coun Rathbone, the Liberal Democrat member for Kendal Town and Rural.