External auditor finds “significant failing in governance” involved in council office purchase
Slough Borough Council has accepted recommendations made by its external auditors in a report which found the local authority's decision to acquire a £41m office building involved a "significant failing in governance".
The investigation was launched following a member of the public's objection over the purchase of Observatory House in Slough, which is now the council's headquarters.
The council's external auditors, Grant Thornton, did not uphold the grounds of the objection, but they raised concerns over the "limited information" given to cabinet members attending the meeting at which the decision was taken.
Grant Thornton specifically noted that details on the benefits of the acquisition should have been afforded greater coverage, no consideration of alternatives was found in the formal information provided to cabinet members, and there were significant financial vulnerabilities that should have been set out more clearly.
There were also uncertainties around the office purchase, including questions about the council's own occupancy needs.
In light of the findings, Grant Thornton recommended the council:
- ensure that for important (in financial or strategic terms) decisions, sufficient and adequate information is made available to members within the formal governance processes to support the decision made, including a comprehensive business case.
- ensure that the informal Lead Members and Directors Group is not used as a substitute for formal decision-making by Cabinet and other parts of the formal member structure, ensuring that there is adequate consideration and documentation of important decisions within the formal decision-making arrangements.
Responding to the report, Cllr Rob Anderson, lead member for financial oversight and council assets, said the council accepts and "fully support the audit response."
He added: "[This] confirms many of the things we have discovered and I know from my meetings with them over the last year that Grant Thornton have done a very thorough job.
"We now need to continue to work towards financial recovery, furthering the significant progress which has already been made."
Issues at Slough became apparent in July 2021 when the council effectively declared bankruptcy by issuing a section 114 notice. Announcing the move at the time, the council said it was in a financially troublesome position due to the pandemic alongside issues with the council's finances that "go back several years".
By December 2021, the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, had decided to send commissioners into Slough "to address serious financial and management failures".
The council's chief executive was later sacked for gross misconduct by the commissioners amid a range of claims, including that she had failed to provide effective corporate leadership and been reckless in proceeding with a reorganisation. She wholly refuted the claims and was prepared to defend her reputation robustly.
More recently, the council received permission from the Secretary of State to raise its council tax by a further 5% without a referendum.
Adam Carey
