No Individual Responsible for £10m Accounting Error Says Former Council Leader

Published on: 21 Jul, 2023
Updated on: 22 Jul, 2023

By Martin Giles

Joss Bigmore, former leader of Guildford Borough Council and following the May GBC election leader of the seven-member Residents for Guildford & Villages Group, has said that there is no “individual officer, councillor, administration or party to blame” for the £10 million accounting error at the council.

The error, believed to have been made in 2021, misled councillors and officers alike that council general fund reserves were greater by £10 million than was the case. The general fund can be used for the council’s running costs and to offset any deficit, so the error gave a significantly distorted and optimistic view which probably affected spending decisions.

The money was part of a larger amount transferred by the government to the council during the pandemic. It was to be used to pay individuals and organizations pandemic-related grants. There were thousands of separate payments made under the qualifying criteria operating at the time.

Any residual balance had to be repaid to the government. The £10 million is the sum that was left unused at Guildford but was incorrectly allocated as available reserves.

The error would have been made by a council officer who has not been named and colleagues did not spot their mistake. The finance director at the time was Claire Morris, who has since left GBC but not, it is understood, because of the error.

One mitigating factor is that as well as the extra work caused by the pandemic, computer systems were being changed as part of the Future Guildford cost-cutting programme. The Dragon has also been told that cuts made under the programme, deemed necessary for budgetary purposes, had affected the council’s efficiency and performance.

But the accounting mistake is acknowledged by councillors as a serious error and there are likely to be calls for more accountability.

Cllr Joss Bigmore

Joss Bigmore, council leader in 2021, told The Dragon: “The misclassification of the £10 million was one of a number of issues uncovered as part of a comprehensive review of the council’s finances.

“The report to the Corporate Governance Committee clearly explains that a number of factors contributed to these errors, there is not an individual officer, councillor, administration or party to blame, more a combination of effects over a long period of time that contributed to an environment where mistakes occurred far more frequently than is acceptable.

“The focus has to be stabilising the financial situation over the next few years so that confidence can be regained in the numbers that we are reporting and on the back of which making decisions.”

Then turning his attention to the risk of the council effectively declaring itself bankrupt by saying it cannot balance its books and issuing a section 114 notice, as Woking has been forced to do, Bigmore added: “There is no way GBC should be issuing a Section 114 notice, it will be a complete failure of this council if that happens, the issues have been found in time, and we have many options with which to balance the books.”

The risk of issuing a 114 notice for this financial year is understood to be very low and the council report says that it is not necessary. The projected deficit for 2023/24 is £3 million but already around £1.5 million of potential savings are believed to have been identified.

The more worrying risk is the aggregated level of projected deficit in the medium-term which the General Fund Budget update report says totals £18.5 million. Largely caused by increasing interest rates.

Cllr Howard Smith

Cllr Howard Smith (Lab, Westborough) asked, at Tuesday’s special meeting of the Corporate Governance and Standards Committee, when the mistake had come to light. He said: “I … as a non-committee member attending, asked the question on the timeline, eliciting the important detail that the error on the Covid £10 million came to light before the elections in May.”

The Guildford Dragon NEWS has requested an interview with the lead councillor for finance, Richard Lucas (Lib Dem, Ash Vale) or chief finance officer Peter Vickers.

See also: Guildford’s £10m Accounting Error Discovered in March

Share This Post