No more "huge surprises" to be found in Slough Council's accounts

Finance officers are continuing to go through the council’s books from 2018/19 to 2021/22 after external auditors found SBC has not completed or kept accurate records of its financial accounts for five years.

The council had no proper management of past budgets, poor financial systems, poor governance of companies, and effectively no general reserves, as well as lacking leadership, professional standards at all levels, corporate and financial ownership, and SBC not understanding of and transparency about its true financial position.

Whilst going through the accounts, chief finance officer Steven Mair and his team have so far unearthed a £479m black hole and SBC being £760m in borrowing debt, resulting in the council having to sell up to £600m of its assets and make £20m-worth of savings a year until 2028/29.

READ MORE: Basingstoke Odeon Cinema will be sold off by Slough Council

This caused the council to effectively declare bankruptcy and freeze all non-essential spending by issuing a section 114 in July. At that point, it was predicted the financial black hole was £174m by 2025.

The Department for Levelling up, Housing, and Communities confirmed yesterday it is “minded” to approve the council’s £307m capitalisation up to March 2023, which will effectively allow the council to use capital funds from asset sales to pay off borrowing over a 20-year period.

However, this doesn’t give the SBC the final go-ahead to do this as it has to complete the outstanding accounts first, which it hopes to complete sometime in the summer, and be signed off by external auditors.

Normally, local authorities would have one set of accounts signed off a year, but SBC has tasked themselves to sign off four.

READ MORE: Look inside the cheapest property in Slough

Despite this, council leader James Swindlehurst (Lab: Cippenham Green) said more problems will be unearthed from the financial teams’ examination of the accounts but does not believe there will be “huge surprises”.

He said: “They may vary a small amount depending on circumstances or changes to one bit of maths somewhere, but we think we now know the ballpark of our problem and, therefore, we know what we’re trying to service through capitalisation, and we will be looking at a programme of sales to deal with that.”

Cllr Swindlehurst added all the accounts have the same problems they are trying to address, saying: “By fixing them and addressing them, they effectively roll them all out like dominoes.”

Mr Mair added once the accounts are closed, they will be able to calculate a final figure for the deficit and submit further capitalisation directions to the government with more accurate figures.

Cllr Rob Anderson

In the 2022/23 budget, SBC is proposing to raise council tax by nearly three per cent. Cllr Rob Anderson (Lab: Britwell & Northborough) confirmed over the years, the council will be setting council tax to the maximum permitted.

However, he said they will not be seeking to raise it past cap either through referendum or asking government for special dispensation.

The council tax support scheme, in which low-income residents can get 80 per cent off their bill, will remain the same.

Cllr Anderson said: “Whilst it is a significant cost to us, we don’t think there is any mileage in reducing that because we’ll just be asking people to pay council tax who couldn’t afford to do it anyway and we’ll spend a lot of time chasing it and not getting it anyway.

READ MORE: Windsor Girls' School submits sixth form building plans

“So, we might as well keep the scheme we got and uprate that by 3.1 per cent, which is in line with the housing benefit increase.”

Croydon Council was on the verge of effectively declaring bankruptcy for a second time this month if it wasn’t for a government bailout.

Mr Mair confirmed Slough is “not in that place” of declaring bankruptcy or issuing a section 114 for a second time.