Commissioner expects Slough's financial position 'to get worse before it improves'

Local Democracy Reporter James Bagley

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Slough's troubling situation “will get worse before it gets better,” said the man helping to fix the cash-strapped council.

Slough Borough Council (SBC) currently has the biggest deficit in the country, standing at a whopping £308m, and has accumulated £760m in borrowing debt.

Most of its troubles were unearthed in external auditor Grant Thornton’s findings in the yet unfinished 2018/19 accounts. The council’s interim chief finance officer Steven Mair and his team also found further issues resulting in the council freezing all non-essential spending.

The external auditors have refused to sign off previous years’ accounts because of errors, mistakes, and misstatements.

To get its finances on an even keel, the council could sell up to £600million worth of its assets and ‘downsize’ the organisation by cutting services and reducing its staffing via restructures.

On December 1, the government officially announced lead commissioner Max Caller and finance commissioner Margaret Lee to oversee the council’s recovery until 2024.

The commissioners officially arrived in Slough a day after the government’s announcement. The LDRS sat down exclusively with Mr Caller to find out his views on the council one month into his role.

What were your initial thoughts on the council when you were first appointed?

The lead commissioner said: “Most people would say, if your external auditor tells you they are not going to sign off the accounts, this is a really big thing.

“This should have rung alarm bells right through the organisation. We shouldn’t have arrived here. Normally, in my experience, external auditors don’t start by issuing statutory recommendations and telling you they’re not going to do things, they try to come in and say to the officer and member team running the place ‘if you go on like this, it’s not going to work out’.

“I don’t know whether they did or didn’t do that, but once you get to a situation where an auditor is sending you those sorts of messages, everywhere else in good local government would say, ‘We need to stop. What’s going here? What do we need to change?’

“If you don’t do that, you’re on the slope and it’s going down.”

Is this the most dysfunctional council you have come across?

Mr Caller didn’t want to put Slough in a “rank order” with the other local authorities that have required intervention, such as Liverpool City Council, Croydon, and more, as each council has had different problems.

He said: “Clearly here, the basics of local government have been let slip and some of that is due to organisational issues and taking decisions without having the proper evidence in front of members.”

How has the SBC and its senior leadership responded to your appointments? And should the council leader still be in his position?

Since arriving in Slough in December, Mr Caller said council leader James Swindlehurst and his cabinet were “determined” to get the authority out of its mess and want to “get it right”.

He also said Cllr Swindlehurst and his team have responded “very positively” to everything he has asked them to do, such as giving the financial oversight portfolio to another cabinet councillor.

This was originally the responsibility of the council leader, but the commissioners believed it was “too much” for a leader to carry. Cllr Rob Anderson was appointed to that role and is “getting to grips” with it.

Despite some blaming the council leader and having called for him to resign, he has remained in power and is working with his administration and officers to get the council out of this mess.

Mr Caller could not comment on whether or not it was right for Cllr Swindlehurst to remain in post, nor could he comment on Slough’s chief executive Josie Wragg, who has been away from post since September.

But he said SBC is “coming to grips” with the size of the hard challenge it is facing and how long it’s going to be.

Particular praise was showered on to Steven Mair as a “top-class” operator and feels people can be assured he and his team are getting the finances right.

What will the council’s structure look like in the years ahead?

While SBC’s finances will mean it will have to downsize and live within its means, new structures will have to be created in order for the local authority to get the basics of local government right and in a stable, disciplined manner.

The council will also have to rebuild its democratic core, get scrutiny right, and have a programme management office that can manage the challenge of all the changes that are going to happen in the next few years.

Mr Caller said things will “inevitably” be different and foresees structural changes both up and down the local authority.

SBC’s Our Futures programme, which sought to modernise its service delivery model and undertook a council-wide restructuring of staff, was “executed poorly”, resulting in the authority operating at a “sub-optimal level,” according to the government’s report.

While structural changes within SBC will be needed, the lead commissioner believed a “grand slam” like Our Futures is not the right thing to do as each element of the council should be looked at “bit by bit” to make sure it is fit for purpose.

He said: “Our Futures started and it’s in a sort of state of suspended animation. Lots of people are gone or are not in post. We’ve got to create a structure that’s stable and I believe that you can’t do anything until you get basics right and this authority needs to be sure it can do basics.

“When it’s confident it can do basics absolutely right, then you can start thinking about interesting structures which might be able to do dramatic things. We are not there. We’re going to do local government as it’s supposed to be done and we’re going to do it absolutely right.

“Officers are going to give good advice, members are going to consider that advise and take decisions, and then we’re going to do what we were asked to do by members, which is what local government is supposed to be.”

A new structure will see more permanent workers in place and will depend less on temporary workers and agency staff.

The lead commissioner added: “Staffing costs will go down but also it will engender a better loyalty of Slough.

“The people of Slough wants a council that’s stable and delivers. You get that best by having a core of people who are committed to working for here and we need to devise strategies for the short and long term which encourage a pipeline of people to work for Slough because they believe in Slough, the place, and the people.

“That’s how local government works. It requires the people to know that people here believe in the place and the people. You can’t do that with agency and temporary [staff].”

How bad is Slough’s position going to get?

When the council official issued a section 114 in July, Mr Mair predicted that the financial gap by 2025 would be £174m. However, that figure has shot up to £308m after new issues were found.

With the external auditors refusing to sign off previous years’ accounts because of errors, mistakes, and misstatements, Mr Caller suspects more things will come out that will have a knock-on effect on the council.

However, he could not pinpoint exactly how bad the situation could get for the borough.

He said: “I have no doubt – because in my experience when things are like this, you don’t find everything in the first round – there will be other things that will come out where, as we work through all things that have happened here, other stuff will just appear.”

The lead commissioner added: “At this minute, they [SBC] have a huge amount to do, and it is a struggle for them. Things will get worse before they get better.”

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