Colchester Council has fallen seriously behind with production of its audited accounts

Like many councils Colchester Council has fallen seriously behind with the production of its audited accounts. The blame is variously attributed to a lack of appropriately qualified audit staff: and central government’s requirement that local authorities should be audited to private sector standards.  

This week marks the fourth anniversary of our Council’s last audited balance sheet.  Central government has consulted on a programme for catching up by 30 September this year. but the Liberal Democratic controlled administration’s response indicates that there is little realistic chance of it being met. Audit work has yet to even start on two of the three intervening years.

Does this matter?  So far, there is no suggestion of financial impropriety so is it of any practical importance?

I believe that residents should be concerned.  As the only Chartered Accountant on the Council, I am best qualified to assess authoritatively what material adjustments are needed to the Council finances before the Council can receive a clean audit report. This may sound very technical, but it impacts on how much money the Council has available to spend on front-line services. This potentially affects everyone.

For instance the Council has significant unknown financial exposure from its recent property investments at Northern Gateway, the details of which are secret, and from the failed district heating project. It has ceased operating its subsidiary companies leading to unknown financial impact on the Council.  It is clear that the Liberal Democrat Administration that controls the Council doesn’t understand and isn’t interested in these technical issues. But cash gobbled-up by these property deals reduces what the Council can spend on front-line services. Without audited accounts we do not know where we stand. 

I agree that the Council's finances are stronger than some other councils which have been forced to issue a s114 notice, the Local Government equivalent of bankruptcy. But the Council's deficit is increasing each year, and the time-frame to take action may be shorter than we think, because without audit accounts, the foundations for our budget projections are in disarray. 

In my view, the problems is capable of being solved, but the risks are growing with time and mustn’t be pushed forward or hidden under the carpet. It is important that the Lib-Dem administration and their Labour allies stop blaming others and starts taking responsibility now, not in six or twelve months time when the financial outlook might be even worse.

William Sunnucks, Colchester City Councillor and opposition spokesman on finance