A CASH-DRAINED authority takes one step closer to agreeing to a large council tax increase and make over £22m savings this year as it still faces major challenges.
Senior Slough Borough councillors have agreed to hike up council tax by 9.99 per cent and make £22.4m of cuts and savings to ease its financial woes as part of the 2023/24 budget. It will now go to full council next for approval.
The government allowed the council as well as cash-strapped Thurrock to increase council tax by an additional five per cent without holding a local vote.
This will pump an additional £3.2m into Slough Borough Council’s budget, offsetting the need to make extra savings. Cllr Rob Anderson (Lab: Britwell & Northborough), lead member for financial oversight, previously said the local authority would not be sustainable without this hike.
The council effectively declared bankruptcy in 2021 after it racked up a £760m borrowing debt and £357 deficit. Along with the council tax increase, it also plans to sell up to £600m of assets.
While council tax is on the up, the local authority has to make £22.4m in savings to be stable for 2023/24.
The biggest cut is £7.5m within the finance and commercial directorate followed by a £5.6m savings target in adult social care. The council-wholly-owned Slough Children First company, which has historically overspent its budgets, has to make a saving of over £1m.
Although a contingency fund has been set up in the event the savings cannot be delivered or delayed, officers have been told they cannot dip their hands into this pot unless there’s no other way to absorb that pressure.
Speaking at Monday’s cabinet meeting, lead commissioner Max Caller, who was sent in by the government to oversee the council’s recovery, warned the local authority has to live within its means and cannot overstep its budget without any mitigations in place.
He said: “There a number of things that are at risk. Service directors have got to live within their means and in the past, they have not done so or have not come up with mitigated savings in-year.
“So, that’s going to be a challenge and that’s the cultural change I think members need to understand.”
Mr Caller also said if this 9.99 per cent council tax increase was not forthcoming, the council would have set a “significantly higher” savings target where no such proposals “are not on the table,” causing doubt if the budget figures are genuine.
READ MORE: Cash-strapped Slough Council 'not sustainable' without huge tax hike
Chief finance officer Steven Mair said in his report that the council’s recovery strategy is “starting to come to fruition” but a great deal of work needs to be done and risks are to be managed before stability can be achieved in five years’ time.
The council has also chugged £21m into reserves, which were at £550,000 in 2021, to offset any unforeseen shock to its finances. However, officers believe this is not enough given how colossal the local authority’s situation is and there are no funds in the earmark reserves to ease off any specific parts of the general fund.
Cllr Anderson said they will have to guard their reserves “very jealously”.
At the same time, nearly £10m has been made available to fund pay and contract increases due to inflation and an additional £2m in adult social care as the town’s population continue to grow.
READ MORE: Government denied Slough Council's requests to ease financial crisis
The council is assuming it will potentially face nearly £13m in annual savings from next year until 2028/29 as opposed to £20m annual savings. If it pays off its £51.1m part in the Berkshire Pension Fund deficit, this could net the local authority about £5.5m in annual savings for the next 12 years.
Cllr Anderson said if this budget goes as planned, the council could complete balancing the 2024/25 budget by this June.
This will give the local authority an “absolute flying start” and some leverage to transform the council to the ‘right size’ without the need to continually worry about setting next year’s finances.
If things go according to plan, the council could balance its books in five years’ time without the need to use money from asset sales to plug its financial woes.
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