A £5.73 million financial shortfall has been identified in Surrey Heath Borough Council’s finances due to a series of mistakes made by the Liberal Democrat leadership concerning the Budget and Medium-Term Financial Strategy.
The recently released Financial Monitoring Report for Quarter 2 indicates an “unfavourable variance” of £5.73 million against the Council’s current Budget. This discrepancy largely stems from an underestimation of debt interest, which fell short by £4 million due to overly optimistic projections for interest rates in the Budget. Additionally, there was a £1.4 million overspend on council services, and the report points out instances of “double counting” of income.
The Report also flags errors in the Council’s Medium-Term Financial Strategy necessitating corrections to the figures contained in that document too. This was a Strategy the Liberal Democrat Administration unveiled with great fanfare shortly after assuming control of the Council last year, yet it appears to be riddled with substantial mistakes.
At a recent Audit, Standards and Risk meeting in October 2024, the council leader, bizarrely, questioned the accuracy of his own Budget, which he had presented to the full Council in February 2024. This raises very serious concerns, as it appears he had neither reviewed nor fully comprehended the Budget he introduced.
This incident has sparked doubts about the financial management of the Liberal Democrat leadership. Despite prior commitments to enhance transparency and financial accountability, neither the Leader nor the Finance Portfolio Holder has provided a statement addressing these errors.
To prevent similar issues in the future, the Liberal Democrat leadership must accept accountability. They need to clarify how they managed to present a Budget with such unrealistic interest rate forecasts and why there has been such a significant overspend on services.
Conservative Group - Surrey Heath Borough Council
