The Royal Borough of Windsor and Maidenhead is requesting financial support from the government to “reduce the risk” of having to issue a section 114 notice.
Discussions with the Department for Levelling Up, Housing and Communities (DLUHC) have begun over receiving exceptional financial support (EFS) in the form of a capitalisation direction, which would be paid back over the medium term via capital receipts. EFS arrangements are already in place for 19 other councils in 2024/25.
Windsor and Maidenhead said the support was needed to give it “breathing space” to deliver its planned transformation programme and achieve financial stability in the medium term.
Without the financial support package, the council said current levels of reserves were so low that its financial position was “untenable” in the short-term.
The authority’s reserves dropped to an unaudited £10m in April 2023, the lowest known reserves of any unitary authority. Since then, rising demand and costs for services have put additional pressure on Windsor and Maidenhead’s financial position, with social care the biggest factor.
The council said “historical local and national decisions going back many years” had largely caused its financial challenges. Year-on-year reductions to council tax for a period of six years from 2010 were noted, leaving the council’s budget £30m lower than if council tax had risen in line with average increases across the country, Windsor and Maidenhead said.
The authority also pointed to a debt increase from £58.7m in 2014 to £204m by March 2023, “during the time when government funding to local authorities was cut by 30%”.
Windsor and Maidenhead said a recent “forensic reconciliation of its budget and balance sheet transactions” had “uncovered more historical costs which weren’t previously budgeted for”. Some of these costs go back many years and now have to be set against already low reserves.
The Chartered Institute of Public Finance and Accountancy (CIPFA) has been commissioned to review the authority’s financial processes and the robustness of its transformation plans.
Lynne Jones, cabinet member for finance, said the authority was “confident” in its plans to make savings this year and “transform” the council over the medium-term. “But we continue to find historical unfunded costs in the budget, and in previous years, which need to be set against the council’s already minimal reserves,” she added. “We are determined to ensure that we can state the true financial position of this council and our figures going forward are accurate and robust.”
Jones said the council “simply doesn’t have the financial resilience to manage the risks ahead, which is why we’ve begun discussions with government about additional support. This will give us the time and capacity to deliver our plans and achieve the transformation needed to become financially sustainable, while continuing to maintain services for residents.”
—————
FREE bi-weekly newsletters
Subscribe to Room151 Newsletters
Follow us on LinkedIn
Follow us here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
