A Labour MP has accused Cornwall Council of a “litany of financial mismanagement”.

Noah Law’s comments come as it was announced last week that the local authority is now around £1.3-billion in debt.

The MP for St Austell and Newquay questioned some of the “over-ambitious” projects undertaken by the council, which he believes have been to the detriment of basic services.

Mr Law spoke out after he and Lib Dem MP for North Cornwall Ben Maguire accused the council of “smoke and mirrors” accounting and a “cover-up culture” as it tries to find a private funding partner to run and develop the Newquay Airport estate.

The council has spent £1.7m of taxpayers’ money on paying outside consultants on the stalled airport scheme, which would have seen the council joining forces with a private American equity company. It has also been criticised for spending £11.6m on upgrading Lys Kernow / County Hall when it is making 100 staff redundant to help meet almost £50m in savings.

Other projects which have led to controversy in recent years include the agreement to spend £12m on Spaceport Cornwall and a £19m scheme to create the Saints Trail cycle path, which went over budget to the tune of £25m and only saw two of its four trails completed … and one of those was reduced in length. An external review found the project had been undeliverable from the start.

The council has also been criticised for taking its eye off a previously agreed £28m project to bring a Marriott hotel and conference centre to the airport estate. Then there’s its £1m purchase of the General Wolfe pub in St Austell to redevelop into accommodation for homeless and vulnerable people. Years on, it’s still empty.

Mr Law said: “It is a litany of financial mismanagement. My concern is that Cornwall Council has been over-ambitious on a number of occasions, such that it’s compromised its ability to deliver basic public services, which are affected by the losses of some of these projects, like the Spaceport and the huge consultancy fees that are being paid out.”

Last week the Government announced as part of its Final Local Government Funding Settlement that Cornwall would receive a core increase of £40.7m for 2025/26. The council’s Conservative administration has been very vocal that neither the current Labour government nor its Tory predecessor have awarded fair enough funding to Cornwall, which has a larger ageing population than most areas and other severe social care and housing issues.

David Harris, the council’s deputy leader and head of resources, vented his anger in December that the funding still leaves a £5.1 million shortfall from Westminster. He commented that he hoped the Prime Minister’s Christmas turkey would come out of the oven burnt and destroyed. He was also annoyed Cornwall wouldn’t be receiving a Rural Services Delivery Grant from the Government.

“The council is saying it’s in record levels of debt and the Government’s cut its funding by £5m,” said Mr Law, “the reality is the Government gave a generous funding settlement to Cornwall Council quite recently so I very much dispute David Harris’ comments over Keir Starmer’s turkey should be burnt.

“Perhaps he wasn’t aware that the Local Government Funding Settlement was coming and to the extent it was for Cornwall. It just shows they are penny wise in some cases and pounds stupid and willing to throw millions of pounds into white elephant schemes, [often after] getting advice from other people.”

The council’s cabinet will consider this year’s draft budget at a meeting on Wednesday (February 12), which includes a 4.99 per cent increase in council tax rates, incorporating a two per cent levy to be used for adult social care. Cllr Harris said: “This really has been the most difficult budget to put together. It is clear that Government has not listened.

“There is absolutely no recognition that our rurality has been taken into account. In fact, you might be forgiven for thinking that they are actively favouring urban over rural areas, especially as the Rural Services Grant has been scrapped in its entirety.

“When the Government finally confirmed the settlement this week, it confirmed that we have been left £5.1 million short of what we were entitled to expect. Not only that, but when the Chancellor announced her new changes to National Insurance contributions from businesses, she gave unreserved assurance that councils would be compensated, yet we have been left £500,000 short, which we have had to find.”

However, Mr Law has stressed that he believes the council is not handling its finances well enough. He adds: “The council are often outsourcing problems they feel they can’t deliver. That outsourcing is a by-product of the way in which public services and local authorities have had their budgets run down over the last 14 years by the Tory government which has chronically underfunded them. Their hand has almost been forced into having to outsource a bunch of these decisions with very costly consultants.

“Sometimes they have to resource the problem they need to solve, whether it’s working with a hotel developer to get investment into the airport site, in a much more incremental way. The trouble is if you employ CBRE [a commercial real estate agent] or try to bring in a big US private equity fund, they are always going to have big ideas and try and win the beauty pageant for the council. But that’s not what we need.

“We need sensible smaller scale decision-making sometimes. The council needs to learn to do due diligence on these kind of investments they’re making as well. The fact that Cornwall Council is indebted by £1.3bn is quite worrying.

“I think there needs to be an overhaul of governance. Far too many decisions are being delegated to officers and away from the politicians. We need professionalisation of council operations in terms of accountability back to councillors at the end of the day.”

The draft budget for 2025/26 includes an increase of £22-million in the council’s net spending on care for adults and children. Capital investments include £173-million to create new school places and repair school buildings, investments in appliance replacements for Cornwall Fire and Rescue, continuing to invest in new technology to create modern, low-carbon ways of working, and £1.5-billion on projects to support economic growth, maintain the transport network and create homes and jobs for local people.

Cllr Harris added: “We have avoided making further cuts and hitting services by redistributing some ring-fenced grant funding and by increasing some fees and charges. These are difficult choices we are having to make, but I am confident we are delivering a budget that will protect our frontline services and continue to invest in Cornwall’s future.

“I will continue to urge the Government to end this cycle of endless cuts and savings, and to deliver fairer funding for local government as they have promised to do.”