Council leader 'cannot rule out' adjustments to services in the long-term

Shay Bottomley

Slough Borough Council leader James Swindlehurst says ‘emergency steps’ will need to be taken after an accounting issue ‘effectively wiped out reserves’.

Speaking to the Express yesterday (Thursday) the Labour leader said once auditors identified the issue adjustments had to be made which removed £7million from its reserves.

He added that ‘adjustments in the long-term to the way we do things’ could not be ruled out, although there will be no changes in the ‘short-term’ to core services.

“We are not very well bolstered against risk until we restore money into our reserves, and the other thing it’s identified are future provisions that we now have to put back into the budget to bolster ourselves against the risks of endeavours and undertakings that we have on the go,” said Cllr Swindlehurst.

“Those require some quite big sums of money to put back into our forward financial plans which again disrupts the set budget as we now have to make provisions for tens of millions of pounds in future years to correct.

“One is the issue of how the risks of our borrowing are treated, which is a thing called the minimum revenue provision – we don’t have enough, we need to bolster that sum of money from the revenue side for all capital borrowing that we’re undertaking.”

He added that a loss of income ‘partly rising from COVID’ contributed to lower revenue, namely reductions in council tax income, collection rates and business rates.

“The big immediate challenge is to restore our reserves and then we’ll be making future provisions in ongoing budgets to try and get back to a safe set of accounts,” he continued.

“The identified budget will not last the year, and we need to take emergency steps to create new financial plans for the authority.”

The leader has faced calls to resign over the ‘financial catastrophe’ following a petition with hundreds of signatures. Cllr Swindlehurst said he offered his resignation to the Labour group, but it was not accepted. 

He also received criticism over the timing of the announcement, with the initial audit reports being published just days after the local elections.

In response, Cllr Swindlehurst said: “The auditors’ draft report was published in March, which identified there’d been a mistake that needed to be corrected.

“The auditors then didn’t publish their next report until May 10 – I don’t know if they are subject to rules as to why they could not produce the report a bit sooner but obviously they’d asked for more information before their final report was published.

“Until that was published to us, it did not confirm the positions in the draft report, so it was at that point that we knew the scale of the adjustments.”

He highlighted that a third of the council is elected every year, adding: “There is no ability to conceal things from the electorate, even if somebody wanted to, and that’s certainly not what’s happened here.”

Cllr Swindlehurst said that a new corporate structure had been implemented based on the financial position, and that there were ‘no plans at the moment’ to make redundancies although new vacancies would be frozen.

There have been calls for an inquiry into the financial situation, although Cllr Swindlehurst said that reviews by government were on-going after initially for ‘about £15million of capitalisation’ in the budget.

“We’ve subsequently asked the government for a further £10million to restore our reserves now that they’ve been depleted,” he added.

“We’re in discussions with the Ministry for Housing, Communities and Local Government (MHCLG) about asking for more freedoms to use capital asset sales to pay for some of the pressures and the restoration of provisions in the budget on the revenue side.

“Depending on the scale of capitalisation that we seek, that is a fairly immediate way of restoring some of the council’s finances.

“As part of asking government for the freedom to use the other side of your balance sheet to deal with things, the government set up reviews, because they’re allowing you to use other bits of your money you wouldn’t normally be able to access.”

A CIPFA review was required after the original capitalisation request, and that an additional review from the MHCLG would form part of external inquiries into the financial situation.

“There are a range of official process going on, and the CIPFA and government reviews are external processes already designed to offer government the satisfaction that the actions we are taking are correct,” said the leader of the council.

With non-essential spending banned, there have been concerns over the impact on services to residents.

“In the short-term, there is no change to services we legally have to provide day-to-day to residents,” said Cllr Swindlehurst.

“People who use social services, children’s protections, most of the services we provide to schools, bins being emptied, all of those things carry on: they are part of a core offer that the council has an obligation to deliver.

“We’ve stopped non-urgent spending whilst we review our financial arrangements and see what steps we need to take to redress the issues we’re facing in future financial planning.

“We will go through a process over the coming months to make sure we’re stripping out excess costs from the council and maybe trying to raise our income a little further.

“In the short-term, there will be no changes to residents’ services unless they’re being offered a service beyond the core package that everybody enjoys.

“In the longer-term, I cannot rule out some adjustments to the way we do things, but I think the day-to-day services which residents should mostly remain intact even after this process.

“We will certainly be seeking to make the first round of additional savings as back-office ones, we might increase some of the charges that we provide for services going forward, but that will be benchmarked against other councils to make sure that we’re still being reasonable.

“Certainly, in this immediate period where we are subject to the notice and review, the standard package of services that every resident enjoys will be provided.”

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