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Windsor & Maidenhead RBC has opened talks with the government about financial support because low reserves make its position unsustainable.
In a statement issued yesterday evening, after prime minister Rishi Sunak announced a general election would take place on 4 July, the council said it needs a capitalisation direction to reduce the risk of issuing a section 114 notice.
The council, which is controlled by the Liberal Democrats with two independents involved in the cabinet, said its reserves were the lowest of any unitary authority at £10m at March 2023. Meanwhile its debt has increased to £204m from £58.7m in 2014.
Windsor & Maidenhead said six years of council tax reductions from 2010 meant its budget was £30m lower than if it had increased council tax in line with average rises elsewhere and meant the council had “extremely low financial resilience”.
A recent reconciliation exercise uncovered further historical costs that had not been budgeted for and although the council has a balanced budget for this year, which includes a transformation programme with medium term savings, the statement said its position was “untenable in the short term”.
Lynne Jones (Ind), cabinet member for finance, said: “We’re confident in our plans to make savings this year and transform the council over the medium-term. But we continue to find historical unfunded costs in the budget, and in previous years, which need to be set against the council’s already minimal reserves.
“We are determined to ensure that we can state the true financial position of this council and our figures going forward are accurate and robust.”
Earlier this year the government agreed exceptional financial support for 19 councils.
Cllr Jones added that a capitalisation direction would “give us the time and capacity to deliver our plans”.
LGC has asked if the request is expected to be impacted by the timing of the general election.
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