Slough Borough Council bankrupt
Discussion
Slough Borough Council has issued a section 114 notice after "discovering a £100m hole" in its finances and can no longer meet its legal obligations with regards to running costs.
https://www.theguardian.com/society/2021/jul/02/sl...
https://www.theguardian.com/society/2021/jul/02/sl...
This just beggars belief and surely can only be attributed to mismanagement and nothing else.
"These shortcomings included weak management and oversight of a number of companies partly or wholly owned by the council, exposing it to “significant financial risk”. The council has borrowed £580m since 2016, and the cost of servicing these loans added to the pressures on its budget."
"An audit revealed in May that the council’s reserves – thought to be £7.5m – were only £500,000 after it emerged they had been drained to correct an accounting error made two years previously that had overestimated the council’s income from a commercial joint-venture, Slough Urban Renewal."
"These shortcomings included weak management and oversight of a number of companies partly or wholly owned by the council, exposing it to “significant financial risk”. The council has borrowed £580m since 2016, and the cost of servicing these loans added to the pressures on its budget."
"An audit revealed in May that the council’s reserves – thought to be £7.5m – were only £500,000 after it emerged they had been drained to correct an accounting error made two years previously that had overestimated the council’s income from a commercial joint-venture, Slough Urban Renewal."
Rotten Boroughs in Private Eye is a real eye-opener with regards to just how useless and corrupt local government can be. WonkeyDonkey is spot on, people at that level seem to get rewarded for failure with huge golden handshakes when they leave one authority before taking up a position in a different one.
TonyRPH said:
This just beggars belief and surely can only be attributed to mismanagement and nothing else.
"These shortcomings included weak management and oversight of a number of companies partly or wholly owned by the council, exposing it to “significant financial risk”. The council has borrowed £580m since 2016, and the cost of servicing these loans added to the pressures on its budget."
"An audit revealed in May that the council’s reserves – thought to be £7.5m – were only £500,000 after it emerged they had been drained to correct an accounting error made two years previously that had overestimated the council’s income from a commercial joint-venture, Slough Urban Renewal."
Sounds exactly like Nottingham City Council. Setting up and running energy companies that ended up £50m in debt. "These shortcomings included weak management and oversight of a number of companies partly or wholly owned by the council, exposing it to “significant financial risk”. The council has borrowed £580m since 2016, and the cost of servicing these loans added to the pressures on its budget."
"An audit revealed in May that the council’s reserves – thought to be £7.5m – were only £500,000 after it emerged they had been drained to correct an accounting error made two years previously that had overestimated the council’s income from a commercial joint-venture, Slough Urban Renewal."
CobolMan said:
Rotten Boroughs in Private Eye is a real eye-opener with regards to just how useless and corrupt local government can be. WonkeyDonkey is spot on, people at that level seem to get rewarded for failure with huge golden handshakes when they leave one authority before taking up a position in a different one.
I used to work for South Hams District Council and our Chief Exec at the time (Ruth Bagley) went to work for Slough for a very substantial pay rise and everything else.She was pretty well thought of at SHDC but, for whatever reason, it didn't seem to work out at Slough and I think she left under something of a cloud.
Countdown said:
I think the Treasurer (CFO) was previously in charge at Oldham Borough Council, another LA financial basket-case. However he was supposedly head-hunted to move down south.....
The CFO hailed from Oldham, where he implemented changes to be the fastest council to publish accounts.He was headhunted to Westminster, where he did the same.
He's now at Slough, leading the turnaround. He very much wasn't the CFO who presided over this situation, and frankly is their best hope at recovery.
More info here on their section 114 notice:
https://www.slough.gov.uk/downloads/file/2040/slou...
CoolHands said:
They’ll blame it on cost of social care etc
Social care costs (and the wider issue of demographics) are rising, and plays a part in any financial analysis.But I think questions can rightly be asked of this when other councils are managing sufficiently. The funding system is by no means a level playing field though.
When austerity hit, councils were expected to be more commercial, and take more risks, as well as deliver transformational savings.
Some achieved this. Some started from better positions.
Some though had ambition that wasn't matched by ability or leadership.
If only the government had been clearer that risks should only be taken that weren't actually risky, but that's kinda the point.
Problems set in for Slough a few years ago I think, but for whatever "leadership" reasons the truth wasn't spoken to power.
Other checks and balances didn't work, though worth noting their 18/19 accounts have not yet been signed off, which is a red flag.
There is a revolving door to a certain point, but I think typically any council that goes bankrupt is career ending for the very senior officers (and politicans).
Northamptonshire was broken up, but Slough is already a part of Berks, so what they going to do? Put it back together?
My council over-extended themselves, or do I meant the taxpayers, on a promise of M&S setting up in town. They demoslished the library and the meeting hall, spending over their estimate because there was aspbestos in the ceilings, and then M&S said they were going elsewhere. Lidl pulled out, leaving massive blocks of retail stores empty. All meetings were behind closed doors. The local MP, who had an interest in the move, said he couldn't intervene.
We are left with a large area that's been cleared of useful buildings, including offices. It's a wasteland.
It'll be covid blamed for sure. 'How could we have known?' Perhaps by using proper financial processes?
We are left with a large area that's been cleared of useful buildings, including offices. It's a wasteland.
It'll be covid blamed for sure. 'How could we have known?' Perhaps by using proper financial processes?
Derek Smith said:
The local MP, who had an interest in the move, said he couldn't intervene.
He can’t intervene; that’s a matter of law. What were you expecting him to do exactly; hold a coup?By all means criticise whatever political decisions he might have been sympathetic to as a matter of ideology, but please refrain from heaping opprobrium at his door for something that is entirely ringfenced from any ability he lawfully has to act on and change.
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