Slough Borough Council has announced fundamental changes to its financial management as part of its transformation programme.
Josie Wragg, chief executive, said: “Put simply, our financial management has not been the quality we want and, though this has not directly affected the services we provide to residents, it is vital we make improvements and swiftly so our communities can be clear what we are spending their money on.
“We are undertaking a massive transformation journey within the council, one which we knew would expose, and bring to the fore, areas which needed improvement, so we could better serve the residents of our town.
“This journey, alongside work on the accounts for 2018/19 and related matters, has brought the fragility of our financial systems front and centre and we are taking robust action to bring about wholescale and sustainable improvements in the service.”
The announcement also follows two heavily critical audit reports released today (Monday 10 May).
The statutory recommendations report, by auditors Grant Thornton UK LLP, lays out four recommendations after finding the council had:
- insufficient capacity and skills within the finance department,
- inadequate preparation of financial statements,
- inadequate general and earmarked revenue reserves,
- inadequate governance, monitoring and controls over our outside groups and companies
The second report also makes 17 recommendations; all of which the council are implementing.
Councillor James Swindlehurst, leader of the council, said: “The reports were disappointing but not surprising as our work to date on the transformation programme had exposed some of the fragility in our finance and support services, and the draft report from our external auditors which went to the audit committee in March had already set out some of the recommended actions we needed to take to improve our financial management and make it fit for the future.
“We already have in place a new financial leadership team providing more robust structures and processes, bringing in the highest quality standards and many of the actions recommended in the reports are already being seen in practise.
“We will be boosting our levels of reserves, are changing our governance of our group companies and putting in place a wholescale training and development programme for our finance staff as well as prioritising the search for support for the existing team.
“The transformation of the council was designed to put us in the best position for the future and to expose and prioritise areas we needed to improve; this is an internal service but one that is vital for the sustainability of the council and all the services our town relies on.”
The audit reports come as the council, as part of its budget planning, is working on closing a budget gap of £16 million in the current financial year (2021/22) and £18 million in the following financial year (2022/23) of a total addressable finances of around £400million.
In February, the council requested exceptional financial support from the government, known as a capitalisation directive. As part of considering this directive, the Ministry of Housing, Communities and Local Government (MHCLG) will be undertaking an assurance review later this year. This review may pick up further issues which will be incorporated into the council’s improvement plans.
Councillor Swindlehurst said: “Budget gaps are a fact of life in any local authority and have been for many years, especially in Slough where our funding has been greatly reduced and has consistently failed to keep pace with the needs of our residents.
“However, as a leadership, as members along with officers, we are putting plans in place to meet the gaps in our budget and we will continue to prioritise funding to frontline services, vital to our residents.”
The audit reports and the council’s financial improvement programme will be discussed at the council’s Audit and Corporate Governance Committee on 18 May 2021 and is expected to also be discussed at Annual Council on 20 May 2021
The council’s total addressable finances of £400million above does not include money provided to the council which is to passport directly on to other organisations or services – for example the dedicated schools grant, housing revenue account and housing benefits.