Government issues debt demand to council
The government has ordered one of the south's councils to reduce its debt
Last updated 20th Dec 2023
Ministers have issued a "best value notice" to Eastleigh Borough Council.
The Liberal Democrat run local authority is among some of the country's largest borrowers relative to its size.
It owns properties including The Ageas Bowl and is also embarking on its One Horton Heath development of up to 3,000 homes.
The best value notice says, "Ministers remain concerned as to Eastleigh Borough Council’s capacity to comply with its Best Value Duty under the Local Government Act 1999".
"This Best Value Notice (“Notice”) is a formal notification that the Department has concerns regarding an authority and is a request that the authority engages with the Department to provide assurance of improvement".
The report, from the Chartered Institute of Public Finance and Accountancy (CIPFA), says the council owed £525m in March 2022.
However, the report also states that the council "has engaged constructively and openly with the CIPFA".
It added it found "few concerns" over the finances and said the "overall picture is positive".
The Council’s response to the report is below:
We welcome the Chartered Institute of Public Finance and Accountancy’s (CIPFA) report and find it to be fair and balanced. We are pleased to see that, in their own words, CIPFA “identified few areas of major concern” and that their “overall picture of EBC is positive.” The report recognised the clear strategic purpose of Eastleigh Borough Council’s investment portfolio and noted that our investments have enabled the Council to continue to deliver a higher level of service than otherwise would have been possible.
Eastleigh Borough Council has a proud record of delivering excellent services and value for money – a fact recognised by the Association for Public Service Excellence, who last year awarded us Council of the Year.
Since CIPFA’s indicative conclusions were first outlined to us in March, we have not been complacent, and many of the areas for improvement outlined within the report are already being addressed, as we set out in our detailed response to the Minister in August.
We welcome robust external scrutiny and transparency, and look forward to engaging with DLUHC officials in response to their Best Value Notice, to explain how we are using prudent investment in our community to deliver jobs, homes and infrastructure in Eastleigh.
Leader of Eastleigh Borough Council, Keith House, said: “We welcome more engagement with DLUHC. We look forward to explaining how local government finance actually works on the ground, and how Eastleigh’s prudent investments have protected essential public services. By innovating to generate commercial income, the Council has been able to continue to fund services for residents, while delivering a real-terms cut in our Council Tax. At the same time, our commercial activities have supported the creation of jobs and investment in our communities.”