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UK: Labour-run Slough council declares bankruptcy after failed commercial deals Labour Party-run Slough borough council has become the third English local authority, after Northamptonshire and Croydon, to declare itself bankrupt.
It has issued a Section 114 notice under the 1988 Local Government Finance Act, required if councils do not have sufficient financial resources to function, and announced an immediate “pausing [of] non-essential spending.”
Slough Town Hall (credit: Wikimedia Commons)
The notice followed discovery of a projected £96 million deficit in the council’s budget, and revelations that its reserves had fallen from £7.5 million to £500,000. If not addressed, the budget deficit could rise to an estimated £150 million by 2024.
and Wexham Court Parish Council. Councillors on the planning committee unanimously approved plans for the third time on Wednesday, May 26, after a lengthy battle between the councils. Plans include 10 two-beds and 14 three-bedroom homes with gardens and garages to be built on land north of Norway Drive in Wexham Lea. The proposal, which was put forward by Slough Urban Renewal, a joint partnership between the borough council and Morgan Sindall Investments, was originally approved in 2018. However, Wexham Court Parish Council, who is the leaseholder of the land, sought to terminate the contract when it became controlled by the Independents to uphold their manifesto pledge of protecting open space land.
Grant Thornton recently issued statutory recommendations to Slough Council after finding that: the finance team had insufficient skills or capacity to produce financial statements or working papers of a reasonable quality; reserves had fallen to an unsustainably low level; and, the council had inadequate governance arrangements over subsidiary and joint venture companies.
Section 24 of the Local Audit and Accountability Act gives local authority auditors the power to issue written recommendations, which must be published and considered at a public meeting within one month from the date of issue. Slough Council held its public meeting on 18 May and has accepted the recommendations.
Auditors have warned councillors further findings could be found in the 2019/20 and 2020/21 accounts
FLAWS found in Slough Council’s financial governance in 2018/19 accounts could be the tip of the iceberg, warn auditors. Councillors met at an annual full council meeting on Thursday, May 20, to discuss the external auditors, Grant Thornton UK LLP, two damning reports on the council’s financial governance. In their highly critical reports, they 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.