Slough Council's financial black hole spikes to £308m

The council is currently undergoing changes, cuts, and soon selling off about half of its £1.2bn-worth of assets in order to address its deficit.

The deficit is currently the biggest in the country.

In July, when the council effectively declared bankruptcy, the financial black hole was estimated to be £174m by 2025.

Steven Mair (right)

However, chief finance officer Steven Mair and his team have found further issues and now predict it to be £308m.

Speaking at an audit and corporate governance committee, he said: “The figure will not be a firm figure for several years because as we identify things, the number changes and we have to estimate certain things.”

He also said the council should invest more into the finance team and introduce trainee as well as training programmes to make sure this £308m shortfall does not show up again.

Earlier this month, the government appointed two independent commissioners to supervise and assist the council for three years to relieve its financial burdens. They have also been given powers to intervene if they are not satisfied with the council’s recovery work.

READ MORE: Government officials will oversee Slough Council's recovery

Max Caller, lead commissioner and former chief executive of the London Boroughs of Hackney and Barnet, and Margaret Lee, finance commissioner, retired executive director for corporate and customer services from Essex County Council, came to Slough last Thursday.

During their time in the town, they could be paid up to £1m a year.

Speaking at the meeting on Thursday, December 9, Max Caller said: “Although the secretary of state has taken powers from this council and given them to commissioners, it is our intention to work with the council.

“It is much better that the elected members, that the people of this borough put in place, take the right decisions and we will help you get there.

“I would hate it to be a situation where we had to impose our will against the wishes of this council.”

Cllr Wayne Strutton

He also said for the “fragile” council to recover from the £308m black hole, it will require “determined efforts” from all councillors and officers.

Councillor Wayne Strutton (Haymill & Lynch Hill), leader of the opposing Conservatives, said it would be “interesting to know” how much the “failed” major restructure and transformation of the council has cost the local authority.

He said: “This council will be faced with difficult decisions over the next year and coming up to the next budget, and we need to be able to explain properly to residents where this money has gone.

“Yes, we’re making changes to put it right but how much of this money has been a self-inflicted pain on us.”

Mr Caller said this “wasn’t the most important thing to do” and members should focus on fixing the council first, adding the organisation has “such a big challenge in getting it right”.

READ MORE: Slough Borough Council could see new auditors appointed

The council’s chief finance officer admitted the restructure resulted in a “number of consequences,” adding officers will be undertaking another restructure on a departmental or sectional level rather than one large scale change like previous to secure permanent staff.

Elsewhere in the meeting, the lead commissioner said this committee will play a “fundamental part” in plugging the council’s “significant” holes.

He recommended a number of constitutional proposals, such as adopting the CIPFA model code, audit committee members to undertake training, the chair to report to full council and be questioned by councillors annually, and for committee members to report on their effectiveness both individually and collectively.

He also said members should challenge the annual internal audit and proposed plan for the year.

Mr Caller suggested making standards a sub-committee of the audit body to look at declaration of interests, complaints, and codes of conduct. He added standards “doesn’t meet very often”.