There are numerous different issues that face local councils, but there is little doubt that managing budgets is up towards the top of the list. Back in the June of 2024, a report that was carried out by the Society of Local Authority Chief Executives found that Guildford Borough Council had been working under a ‘quick fix culture’ that laid the groundwork for ‘millions of pounds’ to be defrauded, even at the expense of vulnerable tenants in housing. The Council has been making progress as it looks to get its house in order, but there is still a long way to go to meet fiscal responsibilities.
What Happened
In 2024, a report was commissioned in order to look at how millions of pounds had been lost from Guildford Borough Council’s housing department, with the fear being that it could have been a case of fraud. This was due to the fact that the culture within the Council set forward an environment in which budgets ‘skyrocketed’, resulting in the authority itself heading towards bankruptcy. There were stages along the way that led to two Council staff members being arrested, five agency workers getting their contracts terminated and even an arrest, with the fraud investigation being escalated.
Another part of the report found that there were major issues with the way that Guildford and Waverley Borough Councils worked alongside one another. Julia McShane, the Leader of the Council, accepted the findings of the report ‘in full’, whilst Councillor Bob Hughes, from the opposition, said that the failure should have been predicted and that residents of Guildford should be given a say in things moving forward. The merger of the two councils covered the top three tiers of management and was seen as being a failure because the primary concern was to save money, rather than do what was best for residents.
Where Things Are Up To
Having been warned that it was at ‘serious risk’ of failing in its ‘legal duty’, Guildford Borough Council has been working hard in order to fix the issues that it had been faced with. An Improvement Plan was drawn up, which was designed to fix the long-running issues around housing, governance and finance. An Independent Assurance Panel was put in place in order to see how things were progressing, with the verdict being that the new plan is ‘fit for purpose’, with some progress having been made. Even so, financial risks are still looming large for the Surrey council.
The progress includes the closing of the Council’s accounts on time for two successive years, as well as having agreed a balanced budget for 2025-2026. Housing services have also been reshaped, which comes on the back of years of poor performance in that area. There was some reassurance provided by an internal audit, which suggested that the governance framework that had been put in place by the Council had given a rating of ‘substantial assurance’. Julia McShane, who remains the Leader of the Council, said that the risk that the Council might fail to deliver the best value possible had ‘diminished significantly’, even though there remain a ‘range of risks’ facing the Council.
Continued Risks
In spite of the fact that Ms. McShane had informed an Overview and Scrutiny Committee that the Council could be ‘proud’ of the progress that had been made up to that point (16th of September), there are still numerous problems facing the Council. One of them was the fact that it was relying on an IT system that was ‘outdated’, meaning that it didn’t link up properly with applications of finance and housing. Then there is the issue around more than half of the housing managers only being interim staff. Another major risk comes in the form of contract and supplier management.
The latest financial monitoring report also paints a worrying picture. There is a protected overspend of £1.4 million, which is in the General Fund and Housing Revenue Account. There is also an issue around the fact that income from parking is falling short, whilst housing repairs are costing more than expected alongside the fact that pressure over inflation is taking a toll. The good news is that the reserves that act as the Council’s safety net are in a much healthier condition, with just shy of £18 million available. The issue is that these reserves cannot be depended upon when it comes to plugging gaps over the long term.
How Things Look Moving Forward
The hope from Guildford Borough Council is certainly that things are now heading in the right direction. The good news in the immediate term is that Guildford Borough Council is no longer at risk of financial collapse, nor in terms of its ability to deliver services with the best value for money. That doesn’t mean that it is all plain sailing for the Council from here on out, however. There are certainly risks around the Council’s flagship housing scheme, Weyside Urban Village, where the deficit prediction has actually increased. That is something that was highlighted by the Independent Panel.
As a result, a ‘range of options’ are being explored by the Council in order to make sure that any financial damage because of the project is limited as much as possible. There are also still big questions hanging over the Council when it comes to housing regulations, local government reorganisation, reputational projects and housing regulations. These are issues that will have to be dealt with to a satisfactory degree before anyone will consider Guildford Borough Council to be anywhere near the state that it needs to be in. There is also a need to ensure that all of the progress managed so far is sustained over the long term.