A review into Thanet District Council’s finances has revealed “significant challenges” due to a further erosion of reserves.
In a report due to be discussed by cabinet members on Thursday, “multiple financial risks” facing the local authority are highlighted as well as the need to take steps to improve financial management.
It follows an independent review by consultants into the financial management governance at the council.
The report to members states TDC has suffered a series of unexpected financial burdens, which has “further eroded” reserves to the cost of more than £10 million.
The document said: “Even though, in general, budgets have been managed well, there have been instances of one-off costs and overspends that have undermined financial stewardship and diminished reserves.
“In the past six years, these included the Transeuropa costs, animal export claims, a hand-arm vibration fine and costs, and a grant repayment incorrectly claimed, which together amounted to around £9 million.
“More recently, legal costs of around £733,000 and the port berth 4/5 project overspend of £825,000 (current estimates) have further eroded reserves.
“These events have an obvious impact, but they also serve to undermine confidence in the council’s financial management – its ability to exercise good stewardship of resources.
“No matter how robust we claim our financial management to be, as long as these events continue to occur, the evidence suggests we have some way to go.
“They also restrict the council’s ability to think more positively and creatively about the future. “Low reserves, that take regular unexpected hits that diminish them further, does not engender a sense of stability and optimism that could enable investment in services and initiatives.”
The key findings by the consultants was TDC’s reserves are low in relation to others and that its financial challenges are significant.
The review also points out that while the finance team is well-regarded and the council’s reserves have been well managed, greater collective ownership of financial management would further enhance the effectiveness of budget management and the control of reserves.
“Any changes in financial management need to encompass more than just updating or altering policies and rules, they need to be embedded by changing the corporate culture,” the report said.
It added that a new financial management system would contribute towards positive changes but is not a “silver bullet” to resolving all issues, and that some processes needed to be simplified.
While the situation looks bleak, the report states that the financial management review should be seen as a step towards improving things.
Cabinet members are due to discuss the report on Thursday, September 23, at a meeting at 6pm.
To see the full report click here.
Did it really need an official report to determine TDC is a bit skint. This’ll be the start of the process of revealing what other liabilities are lurking in the background.
Well LC, its obvious that money spent on a “hand-vibration fine” amounting to £9 million must have been significant in causing an overspend, the mind boggles!
9 million? Is that figure correct? I’d read that the council had been hauled up over health and safety but had no idea it had reached such a level.
It’ll be interesting to see what happens in respect of the rumblings around the cpo of dreamland and wheter or not more is to be paid out.
A quick google shows tdc were fined 250k plus 18k costs by hse , another report suggests that this decision opens the door for affected workers to sue the council for damages, 40 workers is mentioned. Are you saying that the other 8.75 million went on undisclosed compensation payments? Kathy can you get this officially confirned?
You have to ask why 2 bin lorries on recycling day, double costs? and traffic snarl ups when 2 are in a very small road that shows the thinking of TDC, without what it must cost to pick up fly tipping materials.get a Grip people and start thinking outside the box especially when it comes to waste management
You would think with a pandemic and them working from home, all events cancelled and the increase of council tax this wouldn’t be the case.
But then I realised it’s TDC and I’m not surprised. Should be renamed They Don’t Care.
This is pure and simply miss management, there are a whole host of crap that this council wastes money on. This is not a rich community but that doesn’t matter to them, I have to park in the Notting Hill are of London a lot, this is the Royal Borough of Kennington and Chelsea and I can tell you it’s cheaper yo park there all day than it is in Cecil sq. Those on stupid high wages in the council should be dismissed.
Along with many councils up and down the country, TDC is struggling to cope with the cuts imposed upon it by central government.
The impact of Covid has not helped. But unlike almost a dozen other councils, TDC hasn’t sunk yet.
The endless poor management and decision making has had nothing to do with TDC’s financial position then?
Poor management (but by no means the worst in the country) has exacerbated a situation precipitated by central government.
Are you saying that the government should give councils enough money to cover bad management and decision making? If so how do you deal with the moral hazard?
Do you think Councils up and down the country are spending over £700k on legal fees due to the fighting and backstabbing around the top table ? The financial waste in that Council is appalling. Any competent senior management team wouldn’t have let the Council get into this state.
“Do you think Councils up and down the country are spending over £700k on legal fees ”
Yes. Without a doubt.
Councils up and down the country are regularly making huge golden handshake payments to SMT employees who’ve been “let go” – including NDAs.
A full disclosure of what occurred in the departure of our two previous chief execs ( especially McGonigall) being prime examples of such dealings.
There could be any number of reasons why the circumstances under which employees left are confidential.
But the departures are always shrouded in secrecy and usually accompanied by significant payoffs from the ptaxpayers purse. Perhaps there should be an external body that judges when non disclosure is appropriate, however my view is that often its a way of suppressing either whistle blowers or covering up gross incompetence that should have been noticed by the council or even flagrant dishonesty which appears to have been the case with some EKH contracts where works were signed off and paid for with little if any verification that they were of the correct standard or even done. Rumours were rife amongst EkH staff , none of whom would say anything on the record as they all wanted jobs in the in house housing teams.
Similar rumours circulated for a while in respect of outsourced planning matters in thanet and dover. In another instance a case against the council was settled and the council paid out but the sum involved and details of the case covered by an NDA. Where the council loses in court there should be no ability to hide failings behing NDA’s. How can the council performance be judged if they can hide failings by simply paying out more to silence the other party.
Parkway Station Cliffsend at a cost of £2 million
Feasibility study on the Loggia building in Westbrook = £30,000 then needed £700,000 to bring it up to standard with just £9,900 annual income until the lease expired, now £0. https://theisleofthanetnews.com/2021/02/16/feasibility-study-planned-for-westbrook-loggia-building/
The Ramsgate port fiasco with purchasing a new pontoon for the private company at a loss to TDC.
The scandal of £4 million being diverted from the Margate Town Deal to the private company Dreamland.
What other stuff will we find out? No wonder it’s on a route to bankruptcy.
A friend of mine has just been evicted from her flat by Balliff’s She has very bad Motability problems and other problems, when she went to the TDC with the balliff letter on 16th Sept 2021, she was told they could not help , but if she went and brought a tent they would reimburse her. Where is supposed to pitch it on one of the Parks ???
A lot depends on the reasons for the eviction and without details its difficult to comment. However where an eviction is for non payment of rent a council will often regard the tenant as having made themselves intentionally homeless and as such offer no assistance. Was the eviction from a private / council / housing association property?