Government tells another borough council it will not renew best value notice, but remains concerned about “significant debts”

The Ministry of Housing, Communities & Local Government has decided not to reissue a best value notice for Runnymede Borough Council after acknowledging its work to implement a set of CIPFA recommendations but remains "concerned" about "significant debt" at the council.

The ministry issued a best value notice for Runnymede in December last year after a CIPFA capital review showed the local authority's debt was 71 times its core spending power.

CIPFA also raised concerns over Runnymede's reliance on commercial income, which represents a substantial revenue source and is used to support both core and discretionary services.

The public finances body set out a series of recommendations, which included a call for the council to implement a plan to reduce and manage its debt.

It also recommended Runnymede develop a 'risk appetite statement', including specific elements for its commercial and regeneration portfolio and divestment opportunities, and formalise a moratorium on commercial investment.

Writing in a letter to the council's chief executive, Andrew Pritchard, the ministry’s deputy director of local government finance, Suzanne Clarke, said: "We recognise the council's work to deliver against the six key recommendations from CIPFA's capital review, including formalising a moratorium on new commercial investment, developing its approaches to risk and investment reporting, and improving officer capacity and capability."

Clarke said the ministry was "pleased" that the council used the notice as an opportunity to "self-reflect and invite external scrutiny and challenge, assessing organisational culture and adherence to the Best Value Duty, commissioning an external review of the council's companies, and undertaking a Corporate Peer Challenge (CPC) with the Local Government Association".

She also noted the council's commitment to publishing the CPC report and a corresponding action plan at pace ahead of the expiry of the notice.

In light of these efforts, Clarke said ministers were "reassured" as to Runnymede Borough Council's capacity to comply with its Best Value Duty under the Local Government Act 1999 and confirmed the notice will not be reissued.

However, she added: "Whilst we are not renewing the notice, the department remains concerned about the significant debt held by the council and the risk this carries.

"As a result, we expect the council to continue leading its own improvement journey and taking steps to reduce and manage its overall debt.

"I ask that the council keeps engaging openly with the department about this, on at least a quarterly basis for the time being."

Adam Carey