Commissioners detail considerable staff cuts at Woking and warn financial issues “remain significant”

Commissioners sent into Woking Borough Council have said the financial challenges facing the local authority "remain significant" and that they "sense" more details about its finances are to be revealed.

In their first report since being sent in to tackle the council's financial and governance issues after it issued a section 114 notice in June of this year, commissioners Jim Taylor, Carol Culley and Mervyn Greer also noted that the council's legal capacity needed to be improved.

In an effort to reduce the council's spending amid debts of £1.9 billion, Woking has developed a programme to restructure and reduce staffing.   

Two large commercial schemes – Victoria Place and the Sheerwater regeneration – in the council's portfolio account for the majority of its debt.

The programme includes a plan to reduce the council's headcount by about 60 full-time employees, which amounts to around 18% of the council's workforce.

The council has also adopted an improvement recovery plan, which sets out four areas of improvement.

The report, which was sent to the Government in August and made public yesterday (19 October), said: "However there are some areas where the External Assurance Review identified that there is a need to increase capacity, including in particular the Council's finance, legal and commercial functions, where there a number of vacant posts/posts filled by interim appointments."

Commissioners reported that the council's difficult financial position is due to previous investment decisions "and a lack of rigorous recordkeeping and governance".

Their report also noted that: "Since the start of the intervention, more detail has emerged about the financial situation and the Council and commissioners' sense is that there could be more to come."

They highlighted a "significant" lack of data for due diligence on many of the council assets, which is needed to produce a meaningful asset strategy and enable any subsequent due diligence processes.

Hard decisions are also yet to be taken regarding rationalising the council's assets to reduce debt, and the council remains in a "serious" position in terms of its outstanding debt, "on which the Council will need to work closely with Government in order to find a long-term solution," according to the report.

The report adds that savings from staffing and service reductions will not in themselves be sufficient to deliver a balanced budget, and the council will still need support from the Government.

In terms of governance arrangements, the council's improvement plan sets out the launch of a 'Commercial Governance Board', which will concentrate on ensuring commercial decision-making is robust and based on appropriate advice.

The S151 officer will chair the board, and membership will include the Finance Commissioner and the Commercial Commissioner, as well as appropriate senior officers.

In addition, the LGA is supporting the council in a review of its scrutiny function.

"There remain too many member working groups which are not directly sub committees of the scrutiny function and reporting from these groups remains variable," the report noted.

Commissioners are also working with the council to establish a commercial board where decisions and business cases can be brought together under a commercial governance umbrella.

To improve the governance of council-owned companies, changes have been made to the Boards and Articles of Association to reduce conflicts of interest. This has seen some council officers acting as directors and the chief executive resign from company boards.

Concluding the report, the commissioners said: "The Council has started to make progress in tackling the challenges it faces and there is clear ownership of those challenges, shown in the unanimous support given in full council to the Section 114 notice and the recommendations put to the council to respond to it.

"These challenges are very significant, and much remains to be done. The most difficult phases of the council's recovery are yet to begin.

"Some of those phases include the establishment of a new service delivery offer (including through engagement with a range of partners) and development of the revenue budget to support that offer over the Autumn. The setting of the budget in the Spring of 2024 will be pivotal. The council is going through an organisational transformation process which will include significant reductions in the organisation's headcount. There is also the extensive work required to develop and deliver an asset rationalisation strategy."

Cllr Ann-Marie Barker, Leader of Woking Borough Council, said: “The Commissioners are right to draw attention to the severity and uncertainties that remain around our financial position. The Council continues to work hard to understand the full implications of our situation, whilst also taking the necessary steps to manage our current and future budget overspend. This is a key focus as we work towards setting our 2024/25 budget, ensuring that the council learns to live with within its means and achieves financial sustainability. This will inevitably involve difficult decisions in the coming months.

“I am pleased that the Commissioners have recognised the important progress the Council has made in adopting a robust Improvement and Recovery Plan and how we are determined to become a smaller, more efficient council focussed on delivering core services to residents.

“Commissioners have also acknowledged how elected members and officers have worked with them in an open and transparent way and we look forward to continuing to work in partnership to achieve financial stability in the future.”

Adam Carey