Windsor and Maidenhead council says it has been forced to seek ‘exceptional financial support’ from central government to rescue it from its perilous situation.
The council’s financial challenges are ‘due in large part to historical local and national decisions’ going back many years.
Year-on-year reductions to council tax for a period of six years from 2010 have left the council’s budget £30million lower than if council tax had risen in line with average increases across the country.
At the same time, the council’s debt increased from £58.7million in 2014 to £204million by March 2023, during the time when Government funding to local authorities was cut by 30 per cent.
Reserves in April 2023 were at an unaudited £10m – the lowest known reserves of any unitary authority.
Cabinet member for finance, Councillor Lynne Jones, once again laid out the bleak reality of RBWM’s finance at a cabinet meeting last night (Wednesday, May 22).
“[We are] finding errors of a magnitude that throw the opening reserves balance of £10million into question,” she said.
RBWM has an ‘unbelievable backlog’ of accounting queries, she said, and it is undertaking a ‘full reconciliation’ of bank accounts and balance sheet accounts, that ‘have not taken place for multiple years.’
“We’re working towards a position where the true financial position of the council at the point we became the administration of RBWM will be known,” Cllr Jones said.
“Exceptional Financial Support [EFS] from Government – sometimes called a ‘capitalisation direction’ – is effectively short-term support which is paid back over the medium term by capital receipts.
“This funding will provide the council with the time and the revenue needed in the medium term to deliver the plans that are already in place to become financially stable.”
The hope is that, by this mechanism, RBWM will be able to ‘reverse the decay’ of the past many years.
Stephen Evans, Chief Executive at RBWM, added that the council has ‘extremely weak’ financial resilience.
“It’s now so weak that we do need to seek support from Government,” he said.
Nineteen other councils in the UK have also had to do it this year, he said – and there ‘will be more’ because ‘this is the only mechanism available’ to local authorities at the moment.
“Scrutiny will be on us more so than now,” said Mr Evans. “The importance of strong governance, financial controls and decision-making is now even greater.”
“But we continue to have confidence in our plans and the ability of our colleagues and councillors to deliver those plans.”
The Royal Borough has begun talks with the Department for Levelling Up, Housing and Communities about this financial support package.
