The leaders of Dudley Council have come under fire for reportedly disregarding early warnings about a potential financial crisis from the council’s own audit committee. An email sent by the chairman and vice-chairman of the watchdog group to the council leader, deputy leader, and Cabinet member for finance in July 2023 expressed concerns about the council’s budget and requested reassurance that the leadership was aware of the issues.
During the most recent audit committee meeting, details of the email were disclosed, revealing that Cllr Steve Clark, in response, simply acknowledged the concerns with a one-word reply – ‘noted’. Cllr Shaukat Ali, Labour’s finance spokesperson, condemned this response, stating, “The leadership’s dismissive attitude towards the committee is unacceptable. They should have presented a comprehensive plan in response to the warning. It seems like they have chosen to do nothing about it.”
The email, dated July 5, referred to a private briefing from the council’s external auditors. Highlighting the auditors’ apprehensions about the council’s reserves, financial sustainability, and failure to meet the budget set out in March 2023, and failure to deliver £7.8 million in savings from previous years, the email expressed the committee’s concerns. The chairman, Cllr Angus Lees, stated, “Both I and my vice-chair Cllr Borley, wanted to raise our concerns regarding these issues with you prior to Cabinet.”
The council faced a financial setback in October when a projected budget shortfall of £15m prompted warnings from the authority’s chief accountant that a Section 114 notice – essentially indicating that the council was insolvent – might have to be declared, following Birmingham City Council’s footsteps.
In response to these accusations, Cllr Patrick Harley, Dudley Council leader, refuted the claims, dismissing them as baseless. He highlighted the council’s proactive actions, such as seeking a peer review from the Local Government Association and establishing the Independent Improvement Board to address the situation. Cllr Harley also expressed satisfaction with Cllr Clark’s response to the committee, affirming that there were ongoing discussions and that the committee was informed about the LGA review at every stage. He emphasised that the council had transparently communicated its actions related to the audit committee on multiple occasions.
The allegations and counter-claims surrounding the council’s financial situation have raised concerns about the transparency and accountability of its leadership. As the situation unfolds, it is essential for the council to address these issues and work towards restoring confidence in its financial management. Effective communication, proactive measures, and collaboration with relevant stakeholders will be vital in navigating the challenges ahead.
Source: BirminghamLive