Liverpool City Council has drawn up an action plan with the district auditor, after a damning Audit Commission finance report. The document revealed the council had just £7.5m in available revenue balances, with no other reserves available to support ongoing or unforeseen additional expenditure. This sum also fell short of the £11m the council identified as being the minimum level of balances it should maintain. Other funding pressures facing the council included a collection fund deficit, which had changed from £1.6m in surplus in 2003/04 to £24.5m in deficit at 31 March 2007, and funding commitments for the Capital of Culture.There was currently an anticipated ‘gap' of more than £20m to meet commitments for 2008/09. A council spokesman said: ‘The financial challenges we are facing are historic. The district auditor has made a number of recommendations and the council has drawn up an action plan to implement them.' Recommendations include planning for the medium to long-term future to avoid a short-term ‘piecemeal' solution; ensuring the collection fund is restored to balance; and, ensuring a prudent budget is set for 2008/09, ideally with cross-party support.