Reading Council as CEO warns of financial 'perfect storm'

RBC CEO Peter Sloman, who said this summer was the first time he ever worried whether the council would be able to collect rubbish, outlined his concerns to councillors while discussing the authority’s latest financial situation.

He said: “I think local government finance is in its greatest peril that I can think of in the past few years.

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“It’s going to be interesting to see what the Government’s response is to the financial peril which lies in local authority’s finances. We are no exception to it.

“I’m not here to bring all the doom into the room but I just think there is a sort of perfect storm here.

“We’re getting concerned about the budget position…there is a very high level of concern in the management team about this.”

RBC leader councillor Jason Brock said the council’s finances are in a “much healthier” position compared to five years ago but the market conditions are “some of the most volatile in quite some time”.

PICTURED: Council leader Jason Brock

The council’s policy committee was discussing a report on the 2021/22 Quarter 1 finances, which showed a third of the council’s planned savings were at risk. However, Mr Sloman said this was always an ambitious target and contingency funds have been put aside.

Cllr Brock said: “It’s fortunate we continue to allocate contingency budgets and we have a much healthier reserves position now than we would have had let’s say five years ago, when the risk of shocks like we are experiencing now would have been tremendously profound to the ability of the authority to continue to operate.”

Referencing the financial issues facing Slough Borough Council, which recently froze all non-essential spending to plug a huge £200m-plus financial black hole, Cllr Brock added: “We have seen up and down the country and at the other end of the county, authorities that are already struggling with the financial conditions we find ourselves in and there are likely to be many more who experience profound existential difficulties as we move forward, I am sure.”

Mr Sloman highlighted issues including: rising inflation, worker shortages, the Covid-19 pandemic, adult social care pressures, the fuel crisis and the decline in the town centre economy.

Inflation and worker shortages

He said inflation could rise from one per cent at the start of this year’s budget in April to four per cent by Christmas, while worker shortages are having a significant impact.

The long-term difficulties finding employees for professional jobs such as social workers and planners “have now widened to many other areas”, he said, which is exemplified by the national shortages of lorry drivers and hospitality staff.

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Mr Sloman added: “This is the first time in my career that I’ve been wondering if we can collect the rubbish, in terms of getting enough drivers in the summer.”

Covid-19 and social care

The impact of Covid-19 is “starting to unwind” but there is still an impact on the workforce, with people isolating, or with family members affected.

“We are trying to pull the service back to normal standards,” he added.

Meanwhile the impact of Covid on the town centre continues.

Mr Sloman said: “I just drove past the other day that bicycle rack that’s next to the station – four ranks of a bicycle double decker rack that used to be full and counted 12 bikes in the middle of the day.

“You can see the impact on commuting and in the town centre is enormous.”

This, he said, would potentially lead to lost business rates, difficulty in collecting business rates and delayed business rates, as well as lost car parking income.

The CEO said the impact of Covid has had a knock-on effect on social care, which has in turn impacted on mental health, hospital demands, and getting people into re-ablement services.

PICTURED: The social care crisis is one of the biggest issues across the UK

And he said the squeeze on people’s finances means “it’s difficult to get money out of people”, impacting on the council’s ability to recover adult social care fees from patients.

Mr Sloman said the council will also start to struggle collecting council tax and business rates.

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Other pressures on social care include the requirements for care workers to be double vaccinated and difficulties recruiting staff.

The Government recently announced plans to reform adult social care with funds from an increase to national insurance.

But councillor John Ennis, lead member for Adult Social Care at RBC, called it a “phantom plan” due to most of the money raised going towards the NHS rather than for social care over the next three years.

The fuel crisis

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Finally, bringing up the very topical subject of the fuel crisis, Mr Sloman alluded to the impact facing the council-owned bus company Reading Buses.

PICTURED: Reading Buses 17 bus

He said: “We know the fuel crisis is going to impact on us and maybe one of our companies, when you think about the miles that they drive [an allusion to Reading Buses].”