Best value inspection ordered for district council over £1bn debt

The Department for Levelling Up, Housing and Communities has appointed a best value inspector for Spelthorne District Council in light of the council's “extremely high levels” of debt and borrowing.

News of Lesley Seary’s appointment came on Wednesday (8 May) in a letter from DLUHC's Deputy Director - Local Government Stewardship, Max Soule, to Spelthorne's Chief Executive, Daniel Charles Mouawad.

Soule said DLUHC's decision was partly a result of the authority’s debt, which was at £1.096bn in March 2023, the second highest level of debt for a district council in England. 

The £1bn figure is 87 times the council's core spending power and 52 times its total service expenditure. 

Soule also referenced a July 2023 CIPFA review of the council, which found it required expert independent support to assist with its immediate and ongoing financial challenges and to put in place risk mitigations and undertake a thorough examination of the Authority’s governance and decision-making culture.

Seary's inspection will cover a broad area, including governance and scrutiny and risk arrangements. She has been asked to direct "particular attention" to the governance arrangements and decision-making conducted across the local authority.

She will also consider capacity and capability in her inspection and the adequacy of the authority's plans for implementing CIPFA's previous recommendations. 

Regarding decision-making, Seary has been directed to consider leadership, governance, organisational culture, use of resources and impact on service delivery. 

Regarding finances, her inspection will examine the appropriate level of capital risk for the authority, the impact of the investment portfolio on service delivery, the authority’s capacity to implement its new housing strategy, the impact the investment portfolio and its management have had on service delivery, and the prudence of financial decision-making.

Seary, who will be paid £1,200 per day, will report her findings to the Secretary of State by 30 August 2024.

Leader of Spelthorne Borough Council, Cllr Joanne Sexton said "We welcome the independent review and will work with the inspector and her team. This administration has taken many decisive and positive steps since the May 2023 election including instigating a full external independent review of our commercial property portfolio.

“Additionally, we have reduced future borrowing requirements by nearly £200m and are pursuing alternative ways to deliver more affordable housing. We will continue to work with DLUHC in an open and transparent way and look forward to receiving the findings of the report."

Adam Carey