Guildford, Surrey, Image ©JLekavicius/Shutterstock
The council this week said it had been able to balance its books for 2025-26 despite an “unfavourable” local government settlement that left levels of funding relatively unchanged from the previous year.
Non-ringfenced reserves were “back at a reasonable level” at around £17.7m, well above the recommended minimum 5% of general fund expenditure.
However, it said there was no extra government funding to pay for inflationary pressures and increased demand for services and insufficient compensation for the increases in employers' National Insurance contributions introduced in the Budget.
These would need to be met by reducing costs and increasing income, Guildford said.
Council tax will rise by 2.99% while fees and charges for council services are expected to go up by at least 3.75%.
A report to councillors this week stated the council was “well positioned” to respond to the financial challenges faced by all local authorities.
“While the latest medium-term financial plans for the subsequent years ending 2028-29 continues to project future financial pressures, and opportunities, the council will take action to ensure sufficient funding is in place to deliver and maintain services,” it said.
The borough had previously warned it was at risk of being forced to issue a Section 114 notice due to the strain caused by rising costs on its £300m debt.
Although a Section 114 was avoided, Guildford said the continued use of reserves to plug gaps would make closing its medium-term deficit imperative.
Last year, “serious weaknesses” were identified in the council’s governance and management, including the stewardship of public money and the delivery of services for the public, following a criminal investigation into allegations of fraud in its housing department.
Two independent reviews, commissioned in the wake of concerns over breaches in the letting and management of housing maintenance contracts, concluded that Guildford should go back to basics to ensure clear direction, leadership, systems and governance prevailed.
A separate review this year by law firm Heminsley found senior officers missed red flags which should have alerted them to risks associated with the housing maintenance contractor.
“The identified governance issues, and failure to take material action in relation to the red flags, may therefore have given Guildford's officers the opportunity to spend significant amounts of money with contractors, ostensibly to fix the housing compliance issues, but without having material governance and oversight over controls to ensure good value, or even to confirm what that money and budget was actually being spent on,” it said.
Council leader Julia McShane said Guildford had “come a long way” in the last two years, thanks to the dedication of those involved in the annual budget process.
Richard Lucas, lead councillor for finance and property, said the council still had tough decisions ahead to balance its medium-term financial plan.
“However, I have no doubt this will be achieved now we have an experienced financial team and strong controls in place," he said.
