Slough will need to make cuts “to a degree not seen anywhere else”

The authority, which issued a section 114 – freezing all non-essential spending – in July, is facing a financial deficit of £223.1m for this current financial year and a further £84.1m in 2022/23, totalling £307m.

As part of the 2022/23 budget, the council is has set its revenue spending, money used for day-to-day spending such as adult social care, at £107.6m. The budget requirement is 78 per cent, or £84.1m, greater than sources of funding.

No complete or accurate financial accounts for five years, no proper management of past budgets, poor financial systems, poor governance of companies, and effectively no general reserves led to this situation.

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The lack of leadership, professional financial standards at all levels, corporate and financial ownership, taking evidence-based decisions, and the council not understanding of and transparency about its true financial position contributed as well.

In a section 25 report, a statement made by the chief finance officer Steven Mair, he said the town will need £479m in “unprecedented” government support but could potentially rise if £20m-worth of savings are not found each year for the next years.

Steven Mair, the council's chief finance officer

In order to place itself an even keel, the council will need to request to government if it could sell up to £600m of its £1.2bn-worth of assets to plug this gap, known as a capitalisation directive. It will also need to achieve £20m of savings this year.

Mr Mair wrote: “It is only with confirmation of significant financial support for the Council from the Department for Levelling Up, Communities and Housing that I can provide members with some assurance on the robustness of the budget estimates and the adequacy of reserves.”

It is not known which assets are to go but the council has applied for the capitalisation directive. The £223m is required to tackle historic issues whereas the £84m is to set and deliver a legally balanced budget for this year.

The council-owned Odeon in Basingstoke could be one of the many assets to go (Image: Google Maps)

A further £172m capitalisation directive will be needed until 2028/29.

Mr Mair also said £20m savings each year needed are “to a degree not seen anywhere else” as the council’s basic net revenue funding is £107m, of which £32m of this fund, or 30 per cent, is made of up debt charges.

The changes needed to organisational financial management culture and process that got Slough into this situation will take an estimated four years to achieve, Mr Mair said.

The council’s minimum revenue provision, money set aside to pay off debt, has been “inadequate” and incorrectly accounted for. This will take a large portion of the capitalisation directive.

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From 2008 to 2021, the minimum revenue provision has totalled £70m. A further £29m is needed to pay off this in 2022/23.

Slough Borough Council is facing £760m in borrowing debt, the third-highest per head of population amongst all unitary councils, where the capitalisation directive is also seeking to reduce in line with other local authority’s debt levels.

The commissioners, who have been sent in by government for a three-year period to assist the council to fix its financial woes, said the set of budget reports “exposed the recklessness” in the way the local authority has managed its affairs over the years.

Councillors are set to debate and vote on the 2022/23 budget next week. Slough taxpayers could see their council tax bill rise by nearly three per cent and a reduction in services as part of the authority’s bid to fill its financial woes and make that £20m saving.