Bankrupt Slough could raise council tax by 20% and be forced to sell off assets
Local authority told to offload thousands of assets including council houses in stark report, a year after declaring bankruptcy
A bankrupt local authority could have to raise council tax by 20% a year and will be forced to sell off thousands of homes and other assets under “unprecedented” plans imposed on it after it ran up catastrophic debts amid overspending running into hundreds of millions of pounds.
The scale of the financial and management chaos at Labour-run Slough council is revealed in a stark report by a team of government commissioners sent in to run the authority after it declared effective bankruptcy a year ago.
It calls on ministers to give special powers to commissioners to effectively rebuild “the basics of local government” in an authority it says lacks top-level leadership, faces a major staffing crisis and struggles to deliver what it calls “extremely fragile” services.
The council has been told to offload hundreds of millions of pounds’ worth of assets to fund its recovery programme, including its stock of about 6,700 council houses, and a number of development sites earmarked for housebuilding.
But the report warns council leaders that even a fire sale of assets – everything the authority owns except roads and parks is said to be “on the table” – may not be sufficient and that it may need financial support from government for up to eight more years.
The parlous state of Slough’s finances mean local residents face potential council tax increases of between 12% and 20% in each of the next three years, the report says. Annual council tax increases are normally limited to a maximum of 5%.
Although Slough initially reported a £100m “black hole” in its budgets at the time of its Section 114 bankruptcy notification in July 2021, this ballooned to £480m as auditors went through the books. It also owes £680m borrowed in recent years to finance a series of property developments.
Formally responding to the report, local government minister Paul Scully said the “unprecedented” scale of the financial challenge in Slough meant “radical solutions may be required to ensure best value and sustainable service delivery for the residents of Slough”.
The commissioner’s report describes a council reeling from years of disastrous investment decisions and leadership failures and which now struggles to deliver even basic services as it grapples to recruit and retain staff.
“Even in the best of times, managing such a small unitary authority would be very challenging, requiring the highest-quality political and officer leadership and a degree of luck, hoping nothing much would go wrong. Regrettably, this has not been the case over recent years,” the report says.
The report attributes a series of financial failures in recent years to incompetence and deliberate missteps on the part of officers, including overambitious borrowing, the draining of reserves, and misuse of capital receipts. “What is surprising is that no councillor seemed to notice,” the report says.
It reveals senior executives at the council spent £2.8m on consultants with little local government experience to guide a management restructuring that was supposed to deliver £4m of savings. The ill-fated plan, launched at the height of lockdown, instead ran up costs of £1m and left the council shorn of key staff.
The scheme was “totally unfit for purpose and resulted in the speedy destruction of officer capacity and competence with many remaining individuals now in posts they had no experience in and whole teams being made redundant which were essential to delivery of statutory services”, the report says.
The commissioners’ report says many of the posts that were eliminated under the plan are now having to be re-created. There is just one permanent senior director in place at the council, which is highly dependent on agency staff, not least in children’s services, which has been under special measures for eight years.
The former Slough chief executive Josie Wragg was sacked by the commissioners in March for “gross negligence and reckless behaviour.”
James Swindlehurst, the leader of Slough council, said: “The mistakes which brought us to this position are laid out clearly, but what is also clearer as we move forward is what we need to do to help put things right. We have always accepted the seriousness of our situation and the difficult decisions we have to make in the coming years.”
The scale of the financial and management chaos at Labour-run Slough council is revealed in a stark report by a team of government commissioners sent in to run the authority after it declared effective bankruptcy a year ago.
It calls on ministers to give special powers to commissioners to effectively rebuild “the basics of local government” in an authority it says lacks top-level leadership, faces a major staffing crisis and struggles to deliver what it calls “extremely fragile” services.
The council has been told to offload hundreds of millions of pounds’ worth of assets to fund its recovery programme, including its stock of about 6,700 council houses, and a number of development sites earmarked for housebuilding.
But the report warns council leaders that even a fire sale of assets – everything the authority owns except roads and parks is said to be “on the table” – may not be sufficient and that it may need financial support from government for up to eight more years.
The parlous state of Slough’s finances mean local residents face potential council tax increases of between 12% and 20% in each of the next three years, the report says. Annual council tax increases are normally limited to a maximum of 5%.
Although Slough initially reported a £100m “black hole” in its budgets at the time of its Section 114 bankruptcy notification in July 2021, this ballooned to £480m as auditors went through the books. It also owes £680m borrowed in recent years to finance a series of property developments.
Formally responding to the report, local government minister Paul Scully said the “unprecedented” scale of the financial challenge in Slough meant “radical solutions may be required to ensure best value and sustainable service delivery for the residents of Slough”.
The commissioner’s report describes a council reeling from years of disastrous investment decisions and leadership failures and which now struggles to deliver even basic services as it grapples to recruit and retain staff.
“Even in the best of times, managing such a small unitary authority would be very challenging, requiring the highest-quality political and officer leadership and a degree of luck, hoping nothing much would go wrong. Regrettably, this has not been the case over recent years,” the report says.
The report attributes a series of financial failures in recent years to incompetence and deliberate missteps on the part of officers, including overambitious borrowing, the draining of reserves, and misuse of capital receipts. “What is surprising is that no councillor seemed to notice,” the report says.
It reveals senior executives at the council spent £2.8m on consultants with little local government experience to guide a management restructuring that was supposed to deliver £4m of savings. The ill-fated plan, launched at the height of lockdown, instead ran up costs of £1m and left the council shorn of key staff.
The scheme was “totally unfit for purpose and resulted in the speedy destruction of officer capacity and competence with many remaining individuals now in posts they had no experience in and whole teams being made redundant which were essential to delivery of statutory services”, the report says.
The commissioners’ report says many of the posts that were eliminated under the plan are now having to be re-created. There is just one permanent senior director in place at the council, which is highly dependent on agency staff, not least in children’s services, which has been under special measures for eight years.
The former Slough chief executive Josie Wragg was sacked by the commissioners in March for “gross negligence and reckless behaviour.”
James Swindlehurst, the leader of Slough council, said: “The mistakes which brought us to this position are laid out clearly, but what is also clearer as we move forward is what we need to do to help put things right. We have always accepted the seriousness of our situation and the difficult decisions we have to make in the coming years.”
In my recent experience dealing with the management of Housing Benefit team, there still appears to be a serious lack of understanding of procedural requirements, as well as insufficient training in assessing and verifying documents submitted by supported accommodation providers. These providers deliver stable, affordable, and safe accommodation with 24/7 support for vulnerable adults who would otherwise be at risk of returning to the streets.
Instead of supporting these schemes properly, the council’s significant delays, procedural failings, and incorrect handling of claims are actively increasing the risk of homelessness. Where eligible Housing Benefit payments are delayed or wrongly refused, providers are left unable to continue covering lease obligations, operational costs, and utilities indefinitely.
The safeguarding response times are also deeply concerning. Safeguarding matters involving vulnerable adults should be treated with urgency and responded to immediately, yet responses often take far too long, placing already vulnerable individuals at even greater risk.
In addition, the council’s mishandling of cases creates unnecessary duplication of work, repeated requests, and reconsideration processes. This is effectively the same work being done multiple times due to initial errors and poor decision-making. This inefficiency significantly increases the operational cost burden on the council.
Had these cases been processed correctly and in a timely manner from the outset, substantial time and financial resources could be saved. These savings could then be reinvested into more constructive and revenue-generating initiatives for the council, rather than being consumed by avoidable administrative repetition and corrections.
If landlords begin possession proceedings because of ongoing non-payment of eligible housing costs, vulnerable tenants will face immediate homelessness. The result is that the same individuals may then need to be rehoused by the council in far more expensive emergency accommodation such as hotels and B&Bs on nightly rates.
This is a cycle entirely of the council’s own making. By failing to process claims correctly and efficiently the first time, the council is increasing homelessness while simultaneously creating far greater long-term costs for taxpayers and placing further strain on already stretched temporary accommodation services.
Unfortunately, I do not believe the council has genuinely learned from past failings or improved its overall behavioural and operational approach in dealing with vulnerable residents and supported accommodation providers.
Thank you for this opportunity to comment.
Greater London Living CIC