Slough Borough Council facing £96 million deficit this year, Section 114 notice reveals

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The perilous state of Slough Borough Council’s finances has been revealed with the council predicted to have a £159 million deficit by 2024/25 if drastic action is not taken.

The local authority announced yesterday that it has issued a Section 114 Notice which means all non-essential spending has been banned until July 22 at the earliest.

A report by the local authority’s new chief finance officer, Steven Mair, has warned ‘there are no straightforward remedies’ to the council’s financial position other than seeking further Government support.

The council has already been in discussions with the Ministry of Housing, Communities and Local Government about securing a £15.2 million capitalisation directive which would allow it to sell off some assets to plug a multi-million pound hole in its budget for 2021/22.

But even if this was approved, Slough’s general fund reserve deficit is still estimated to be £96 million by the end of the current financial year.

Mr Mair has told councillors in his Section 114 report that Slough’s financial problems are down to the leadership, financial decision-making and quality assurance over a ‘number of years’.

A review of the local authority’s finances by the council’s new finance team has found:

  • The council has been incorrectly calculating Minimum Revenue Provision, the amount that must be charged to a local authority’s revenue account each year to finance capital expenditure, since 2016-2017
  • Borrowing has quadrupled from £180 million to £760 million over the same period
  • There is effectively no unallocated general reserves
  • Estimates of local council tax income have not been accurate in recent years
  • Spending on transformation projects has not been closely monitored

Mr Mair added that since the council's budget for 2021/22 was approved in March, a 'growing number' of financial issues have been uncovered which mean the local authority will not be able to balance its budget for the current year without additional Government support.

A number of finance staff have left the organisation in recent months with the current financial team made up entirely of temporary staff, the report added. 

Spending controls are expected to remain in place for the rest of the financial year. 

Mr Mair warned the council is at risk of not being able to set a legal budget for 2022/23 if it does not find additional savings and receive further financial support from Government in the form of an increased capitalisation directive. 

Speaking today, MP for Slough Tan Dhesi said: "Following news that Slough Borough Council finds itself in a very challenging financial situation, I have had several meetings with senior councillors and officers to ensure that my Slough constituents do not experience any loss of essential services.

"I have been assured that will not be the case and that they are working to resolve the situation, including examining sale of the considerable assets amassed over recent years by the council.

"I will continue to monitor the situation very closely, doing whatever I can to help them."

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