A council “cannot afford to take its eye off the ball” despite showing signs of progress in addressing its financial plight.
The warning for Southampton City Council came from the chair of the improvement board that has been providing external expertise and challenge to the local authority.
Council bosses established the voluntary improvement board in October 2023 as part of measures to avoid issuing a section 114 notice – effective bankruptcy – and the appointment of commissioners by the government.
Chair Theresa Grant has written a report on the board’s first year of work, with it set to be discussed by councillors at a governance committee meeting on Monday, January 13.
Since the board was formed, the council secured in-principle agreement from government for up to £121.6million of exceptional financial support in 2024/25, which included covering a budget deficit, transformation costs and a potential equal pay claim.
Ms Grant said there had been “substantial” positive change, giving specific praise to council leader Cllr Lorna Fielker and interim chief executive Andrew Travers for providing “real stability” in a “tumultuous” year.
However, she said there was still a lot to do, with changes to the culture and good governance a long way from being realised.
“The improvement board is very aware that the financial position is still very fragile with equal pay claims still to be settled, reserves still being precariously low and a large number of assets needing to be disposed of to repay the exceptional financial support,” Ms Grant wrote.
“The council and the board cannot afford to take its eye off the ball and the entirety of the organisation, both members and officers, need to keep a laser focus on the improvement journey so it can turn the council around and provide a stable environment where its residents can thrive and receive the services they deserve.”
Leader of Milton Keynes Council Peter Marland, who is the political representative on the improvement board, said work still needed to be done to ensure councillors had a “single version of the truth” when it came to the “precarious” state of the authority’s finances.
Mr Marland said politically there were still “significant” concerns to address.
He added: “The clarity and timeliness of information, appointment of permanent senior officers, the scale of the equal pay problem and the long-term capacity to embed change in the organisation remain as areas of significant risk, and despite some early positive improvements to the overall trajectory, the pace of the work now needs to accelerate with improvements needed on the content of transformation plans and grip on financial detail across the organisation.”
A separate report from chief executive Mr Travers, who was appointed in February last year, said good progress had been made but the next steps will be “much more challenging”.
He said the path to setting a legal balanced budget for 2025/26 without further government support was “extremely narrow”.
Mr Travers said the plans in place are credible but added that the “real test” would be how everyone at the council works together to deliver change.
The council is currently recruiting for a permanent chief executive, with Mr Travers’s fixed-term contract due to end in April.
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