Cabinet to Consider Financial Recovery Plan as Tory Financial Failings are laid bare by CIPFA

A challenging recovery plan, to improve the borough’s finances, will be considered by the Royal Borough of Windsor and Maidenhead’s Cabinet at their meeting on Wednesday 30 October.

This follows an expert review on the council’s finances, by the Chartered Institute of Public Finance and Accountancy (CIPFA). The review shows the council is on the brink of effective bankruptcy, due to the financial situation inherited by the new administration last year, the extent of which has only been uncovered now - unless tough decisions are taken, and additional government support is granted.

This is despite significant action taken by the council’s new administration and senior leadership team over the past 18 months to get the financial situation under control - by making savings, transforming services and generating income.

However, a lack of reserves caused by historical decisions, including unsustainably low council tax, and accounting inaccuracies of £16m - combined with rising demand for services, particularly social care and homelessness accommodation - means the council does not have the financial resilience to meet these pressures.

The state of the council’s finances makes clear that the council needs a substantial financial support package from government, alongside a council tax rise above the current cap, in order to set a balanced budget next year and start to build back resilience over the medium-term. Formal discussions with government, on Exceptional Financial Support, have been on-going since May this year.

The Cabinet will consider the review recommendations – alongside the council’s response, detailed in a draft Financial Improvement and Sustainability Plan, setting out actions and decisions needed on priorities, local services, assets and income generation.

Building on work already done, the council’s recovery will be framed around:

• Strengthening governance and financial control – by reviewing the Spending Control Panel and establishing an independent Financial Improvement & Sustainability Board to support the council’s improvement
• Service transformation, efficiency and contract savings – by continuing to transform services and ensure all contracts are value for money
• Optimising income and commercialisation – by maximising income opportunities through fees and charges, asset commercialisation, partnerships, funding from government and private sector opportunities
• Refining our capital programme – by reviewing our capital programme to keep spend to a minimum
• Driving value from our assets – by maximising income from major regeneration opportunities linked to the Council Plan and developing an asset management strategy with a pipeline of sales, as part of plans for reducing debt

The Council Leader, Cllr Simon Werner, said: “The report is clear that, despite all the work that has been done to tackle this largely inherited financial situation, the council will need substantial support from government to avoid effective bankruptcy in the short term.

“Our comprehensive and challenging plan shows the clear action we are already taking and will take, to address the issues and deliver sustainability – however, it will also mean making some difficult decisions to protect vital services for borough residents.”

Cabinet Member for Finance, Cllr Lynne Jones, said: “This report confirms that past decisions were irresponsible and disastrous for the council’s finances – years of cutting council tax alone costs the council £30m a year, which has impacted on our ability to deliver key services to residents.

“This is why, alongside essential support from government, we also need them to consider raising the council tax cap – to allow us to rectify historical issues and, like many other authorities, meet the challenges of the rising demand on services currently outstripping government funding.”

Cabinet will consider both the CIPFA resilience review and the council’s Financial Improvement and Sustainability Plan

If agreed, then the plan will also go to Full Council for consideration and approval in November.