MONEY troubles at Slough Borough Council has prompted the chief executive to apologise to residents for years of financial mismanagement.

After months of speculation, the Labour-run council caved in and issued a section 114 notice, effectively declaring bankruptcy and banning any non-essential spending while they restore financial stability.

Historic accounting errors, huge one-off payments, and borrowing quadrupling over the years to a whopping £760 million played major parts in depleting the council’s accounts.

Councillors have been warned by the new chief finance officer that they could see a £159 million black hole by 2025 if further government support is not granted.

Slough has become the third local authority to declare an s114, following the footsteps of Northamptonshire County Council in 2018, and Croydon Council last year.

READ MORE: Slough Council issues section 114 notice following mounting money troubles

In an exclusive interview with the local democracy reporting service (LDRS), Josie Wragg, chief executive of the council, has apologised to residents for this financial catastrophe – but pledged to “turn around the council on a secure footing”.

Ms Wragg said: “This is not a good situation to be in. This is a very serious situation and I, of course, apologise to the residents of Slough.

“This is a situation we had not wanted to see or find ourselves in, and it’s something we are going to work extremely hard to get ourselves out of to ensure financial sustainability going forward.”

However, she declined to comment on calls for her and the leader of the council, councillor James Swindlehurst (Labour) to resign.

But she did defend Cllr Swindlehurst's leadership, describing him as a “good leader”.

Slough Observer: Cllr James SwindlehurstCllr James Swindlehurst

She added: “The administration that I work with is an administration that understands the exceptional situation we are in.

“The leader is a good leader and is leading through and forensically understanding some of that [the financial issues].”

The chief executive reiterated essential services such as adult social care, children’s services, libraries, etc. will not be affected by cuts that may have to happen.

But didn’t rule out reviewing job vacancies and posts at the council.

She explained the way they want to bridge this financial gap is to work with government and be able to sell off some of their assets by way of a capitalisation directive of up to £15.2 million, which will effectively give the council greater flexibility to use capital funds in order to fill their financial black hole.

The council has made a number of purchases, such as an Odeon Cinema in Basingstoke, a Waitrose supermarket in Gosport, and owning two hotels in the town in a joint venture with Marriott.

Josie Wragg said: “That way [capitalisation directive] we minimise the impact on service delivery.

“Now, there’s no getting away from the fact that we will still need to be making some realignment to services and reducing some services as part of the process – but we will, going forward, be working with our colleagues and our members, and we will be taking view to residents.”

READ MORE: Slough: What is a section 114 notice?

However, the chief executive could not reveal to the LDRS what assets are in danger of being sold off – but revealed confirmation of the up to £15.2m capitalisation directive could be confirmed after August.

For years, the council has been aspiring to become a “world-class organisation” – but was left red-faced when it was revealed a major accounting error two years ago, drained the council’s reserves by £7.5 million – around 90 per cent.

However, Ms Wragg said they have put in an “A-team” of financial experts in order to rectify this – but their chief financial officer’s report stated that a large portion of the team compromises interim and temporary staff.

This is because staff with the essential organisational knowledge left the council.

Slough Observer: Josie Wragg described the council's financial team as the "A-team"Josie Wragg described the council's financial team as the "A-team"

Josie Wragg said she was “confident” with the team’s experience as they worked with local authorities to bring this council to financial stability.

Following Labour’s landslide victory at this year’s local elections, many questioned the timing of the two damning audit reports that highlighted the financial mismanagement at the council as they were released a few days after the election.

Ms Wragg dismissed these claims as “assumptions” and said the external auditor’s Grant Thornton timetabled the two reports after the election where the council had no say in the matter.