Slough Council has "long way to go" to restore finances

The commissioners, who were appointed by ministers to oversee the struggling council’s recovery, released their first report on the authority, warning council tax rises of up to 20 per cent in each of the next three years may be needed as “the problems can’t just be solved by asset sales”.

SBC is needing a £670m bailout over the coming years, which will require the sale of £600m worth of its properties and land after facing borrowing debt of £680m and a £479m blackhole.

Lead commissioner Max Caller said no other local authority has ever run up this level of debt before and is a “completely unique” situation.

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Initially, the council was needing to make savings of £20m a year until 2029. But commissioners say that is “not realistic” as the council does not have the high-quality people to implement the savings. They believe £10m savings a year are more appropriate.

The council declared bankruptcy in July 2021 where it was then facing a £100m blackhole but has since then increased to £479m after top finance officers unearthed more historic accounting errors.

Mr Caller said they were not clear about the magnitude of Slough’s financial disaster when they first came to the town in December and won’t know the full picture until the 2018/19 accounts and the later years’ books are fully signed off by external auditors.

He also said SBC is “still failing in its duty to deliver best value” as it is still spending about 80 per cent more than its £110m budget. “Until the council can set its budget, it cannot claim it’s in a good place,” he said.

Observatory House (Image: Google Maps)

Even with the current support the council is getting now, it will only reduce its budget overspends to 20 to 30 per cent.

Local government minister Paul Scully said the “unprecedented” scale of Slough’s financial disaster will require “radical solutions”.

A long way to go

Mr Caller said: “Slough has got a long way to go, and the problems can’t just be solved by asset sales.”

Given Slough’s colossal challenges, Mr Caller said the town will either need further government support for up to eight years or ministers will need to grant the council the power to raise council tax above the 1.99 per cent cap without going to a referendum.

He said the intervention may need to be increased than the initial three years as there’s “too much to do”.

READ MORE: Slough Council "very close" to selling off properties

Mr Caller predicted council tax may have to be raised between 12 per cent and 20 per cent in each of the next three years if government refuses further support. However, he said this is a ministers decision only and does not mean huge council tax increases are inevitable.

He said: “Council tax is but one of the solutions and we’re a long way off that decision.”