Letter: Sloppy Accounting is the Borough Council’s Responsibility

Published on: 13 Dec, 2023
Updated on: 13 Dec, 2023

From: John Murray

Secretary of the Town Centre Branch of the Guildford Conservative Association

One can only agree with Cllr Bob Hughes’ (Con, Tillingbourne) request for more information about the alleged Housing Revenue Account fraud (interview December 9) and sympathise with the letter from Wayne Smith (see: Surely a Contract Overspend Should Have Been Noticed Before it Reached £16m?) regarding the apparent lack of basic budgetary controls at the council.

But the background to this is even more damning. In the four years to March 31, 2023, the Liberal Democrat/R4GV administration ran up a cumulative deficit on provision of services of £46.8 million.  Then, with £300 million in borrowings, instead of trying to reduce debt they went ahead in February 2023 (when the likely outturn for that year must have been pretty clear) to approve a budget with a further aggregate deficit of £18.3 million.

The bombshell arrived later, in a document entitled “General Fund Budget Update” (July 25) which announced the discovery of three “accounting irregularities” that collectively removed a total of £26.9 million from reserves and put the council on the edge of a section 114 notice – effective bankruptcy.

At page 23 of the above update report these irregularities are described severally as:

1. ‘A £10.2 million accounting error… in the treatment of a Covid-related grant’  Since the available reserves at the opening of the 2022/3 financial year were believed to be £42.2 million the said accounting error represented no trifling sum and should have been visible to the senior financial officer;
2. ‘a £9.6 million Covid-related accounting adjustment not considered in the reported reserve balance’  Why it was not considered? The note does not say;
3. a £7 million outturn deficit in the 2022/3 period.  One would have thought that they would have had a pretty good idea of that deficit by February 2023 when the budget was put up for approval.

With such a background of general sloppiness, it is little wonder that someone might have thought the council an easy touch for fraud, if indeed fraud there was.

In any event, if the current administration starts to blame the government for their problems, as many councils are doing at the moment, the people of the town should be aware of the true cause of their council’s financial difficulties.

Editor’s note: GBC and R4GV were invited to respond.

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