11:29AM, Friday 02 July 2021
Financial struggles have prompted the council to call for urgent government help to fill a £10m black hole in funds.
The authority has been named among eight other councils with major financial concerns in an announcement yesterday (Thursday).
Slough Borough Council has asked for up to £15.2 million in a ‘capitalisation directive’, effectively giving them greater flexibility to use capital funds for day-to-day spending.
An independent reviewer, Jim Taylor, who was the chief executive of Salford City Council has been brought in by the government to dig through the council’s finances in order to help the Ministry of Housing, Communities, and Local Government decide whether or not to approve this request.
If given the go-ahead, this means the council will have permission to sell off some of their £100 million-worth assets to fill a £10 million black hole in their finances caused by two one-off payments.
One of those one-off payments includes a tribunal ordering the council to repay a business in the borough that wasn’t issued a valuation certificate correctly in 2010 £5.3 million.
Another hefty payment was the £5.5 million deficit in the Slough Children’s Services Trust as Slough Council took control of the independent company earlier this year.
As part of an agreement with the government, the council will allow Mr Taylor to dig through “any document or information” at the council to give MHCLG assurance the local authority can deliver a balanced budget without further financial support.
CIPFA (Chartered Institute of Public Finance Accountability), a professional body for people in public finance, will also be appointed to scrutinise the council’s financial pressures and the ability to manage it without additional borrowing.
Earlier this year, the council got a major scolding from external auditors Grant Thornton LLP when two damning reports were released on their 2018/19 accounts.
In its highly critical reports, it found the council had insufficient capacity and skills within the finance department, inadequate preparation of financial statements, inadequate general and earmarked revenue reserves, and inadequate governance, monitoring, and controls over outside groups and companies.
Speaking at a full council meeting in May, Julie Masci, Grant Thornton’s associate director, revealed the council’s general fund reserves had fallen by more than £7.5 million to a mere £500,000 at the end of 2018/19.
Mr Taylor has been told by MHCLG to investigate if the council has taken 'adequate steps' is confronting these issues and are working to rectify the financial problems.
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