A ‘fire sale’ of property could be costing the council money auditors have warned – amid realisations that the sell-off isn’t raising as much as was hoped.

Slough Borough Council is selling off some of its properties in a bid to raise hundreds of millions it hopes will pay off its debts. But it warned earlier this year the properties weren’t being sold for as much as they hoped – and that a target of £600 million to be raised is now ‘unrealistic’.

Now a new report into the state of the council’s finances by accountancy firm Grant Thornton says it is concerned the property sell-off is ‘functioning as a fire sale’ that is costing the council money.

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The report says: “We are concerned that the council’s disposal plan is functioning as a ‘fire sale’ as there appear to be many transactions where the council is losing money on the sale.”

It adds that this is a problem because the council can only sell its properties once ‘and the council will eventually run out of assets to dispose of’.

The new warning comes after the bankrupt council said it could have to make ‘difficult decisions’ about its services if property sales don’t raise enough money.

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At one point the council had hoped that it could raise some £600 million from selling off properties. But council officials now say their goal of reaching this target by 2027 is ‘unrealistic’.

Council officers say they only recommend that properties be sold if they are no longer needed, or if they are costing the council money to keep.

But auditors from Grant Thornton have said the council could be making a loss on ‘many’ of the sales. They also say they can’t be sure the council has fully considered the financial effects the sales would have.

They say that the cash-stricken council’s financial position means it ‘has no choice but to make the loss’. But they warn that this ‘raises significant concerns’ about the property-sale plan.

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Auditors also note that apparent early success of the plan in was based on the sale of the former Akzo Nobel site in November 2022. The council bought the site on Wexham Road for £40.9 million in 2020 with hopes to build 1,000 new homes there.

But it dropped this plan after going effectively bankrupt in 2021, with a report warning the council had no ‘clear idea’ how it would fund the £250 million the development needed.

The council then sold the site for £144 million in November 2022 – making a profit of £104 million. But Grant Thornton says it has ‘concerns about the size of the surplus and the short timeframe between the acquisition and the sale’.

Grant Thornton has told the council it needs to review its property sales programme – which the council says it has already begun to do.

The report is set to be discussed by councillors at an audit committee meeting on Thursday October 31.