THE £10 million funding black hole would’ve left Slough Council with ‘very, very low’ reserves if the government didn’t step in, the leader said.
Last week, the Observer reported the council was in talks with the Ministry of Housing, Communities, and Local Government to seek permission for a ‘capitalisation directive’ – effectively giving them greater flexibility to use capital funds for day-to-day services.
This could mean Slough Borough Council (SBC) may need to sell off some its £100 million-worth of assets in order to fill that £10 million gap in their 2021/22 budget caused by Covid-19 pressures and two one-off repayments.
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.
READ MORE: Slough Council is short on funds (and may need to sell several properties)
Another danger was the £5.5 million deficit in the Slough Children’s Services Trust if they swap to a different operating model next year.
At an overview and scrutiny meeting on February 18 (Thursday), the leader of SBC, councillor James Swindlehurst (Lab: Cippenham Green) said it was ‘likely’ they will get £12.2 million of capital directive from the government to fill that gap.
The council leader revealed they could’ve used their funds to ease off those pressures and still be able to set a balanced budget – but it would bring SBC’s reserves to a ‘very, very low level’.
Cllr Swindlehurst said: “We don’t believe, given the scale of Covid issues going on, that is a sensible thing to do.
“We don’t want to be in the bare minimum of acceptable reserves and the capitalisation directive moves those one-off pressures off to the capital-side of our budget and allows us to carry on unfettered by those things with the revenue budget.”
On owing a business £5.3 million, the leader of the opposing Conservatives, councillor Wayne Strutton (Haymill & Lynch Hill), feared ‘if there’s one, there are others’ and asked if the council is double-checking to make sure another ‘unexpected’ outstanding rebate doesn’t pop up.
Neil Wilcox, executive director corporate services, said he was ‘comfortable’ this won’t happen again and reassured Cllr Strutton they are double-checking with inspectors from the revenues and benefits department that this problem won’t arise again.
Mr Wilcox added he first became aware of the rebate in January 2020 via email – but did not highlight the £5.3 million until September/October time.
Cabinet members will vote on the budget on Monday (February 22).
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