05:16PM, Thursday 28 July 2022
The level of financial support required to solve Slough Borough Council’s financial crisis is ‘unprecedented’, according to one commissioner appointed to help save the struggling local authority.
It is the first update to the Government by commissioners who were appointed in December 2021, revealing the ‘magnitude of the scale of financial disaster’ that was not clear when they first arrived.
The council will require at least £670million of capitalisation support over the coming years, with asset disposals of £600million as it attempts to clear its debts.
In a report to the Government, commissioners said they were required ‘to take a more hands-on role than would be normal’ after arriving at the council.
Some of the crippling decisions which led to Slough’s bankruptcy ‘was down to a lack of competence by a range of officers, some by more deliberate action’, whilst ‘a poor leadership culture, remnants [of which] still exist today’, made it ‘difficult to speak truth to power’ across the council.
Staff recruitment and retention continues to plague a council which has appointed four statutory directors of children’s services in 18 months.
“It is not possible to formulate or deliver any plan in such circumstances,” said the report.
SBC’s financial budget, set after the Government approved capitalisation directions in March, is still not being met, with the council seeking to take £20million per annum out of the base budget for each year.
“At present SBC is therefore spending some 78 per cent above its funding ability so significant changes are required to bring this back into balance,” wrote commissioners.
“However, in general, services are not being funded in an excessive way so each proposal will require a significant reduction in provision.
“Irrespective of the external environment, which will provide additional pressure due to energy costs, inflation and increasing social care demand, commissioners do not believe this is achievable and a goal of £10million per annum is more realistic.”
Under current forecasts, the council will need continued financial support for at least six to eight years. Under assumptions on levels of support and external factors, this would require ‘significant council tax increases’ in the range of 12 to 20 per cent.
Lead commissioner Max Caller CBE told the Express that the figures in the report ‘explain to ministers the scale of the financial problem’, and that any decision to increase council tax beyond the current cap would be a ‘ministerial decision’.
The Government has responded to the report, and added that it will be inviting representations on a new Direction to give commissioners more power at the struggling council. Click here to see a response from Ministers.
The leader of the council has also reacted to the news. For his full response, click here.