Government review of council’s financial health prolonged

A government review into the financial affairs of a Surrey council has been prolonged until 2025. This Best Value assessment commenced at Spelthorne Borough Council in May, following the identification of the authority’s “extremely high” debt and borrowing figures. As per a government letter, Spelthorne recorded over £1bn in debt by March 2023, positioning it as the district council with the second highest debt burden in England. The examination focuses on particular areas of “concerns,” which encompass governance, the management and reduction of debt levels over time, and the “prudence of financial decision making.” A report from the BBC in January indicated that Spelthorne’s borrowing ranked as the second largest nationwide, with an average debt of £10,415 per individual. This council is one of three nationally presently undergoing such an inspection, alongside the London Borough of Tower Hamlets and Warrington Borough Council. The timeline for this inspection was previously prolonged in August, setting its completion for the end of November. Between 2016 and 2018, the council engaged in borrowing for property investments, aiming to compensate for reduced government funding. It had previously stated that its debt was sustainable, with revenue from these assets “comfortably exceeding” the associated financing expenses.