Report finds ‘significant weaknesses’ in how Bury council manages its finances

A highly-critical report has identified ‘significant weaknesses’ in Bury council’s ‘value for money’. The town hall’s external auditors have produced a value for money’ report which was put before a special meeting of the audit committee last week.

It states that for the period 2021 to 2023 ‘actual significant weaknesses’ were identified in all categories looked at. Conservative opposition leader Coun Russell Bernstein said the report is a ‘damning indictment’ of the Labour -run authority and the reputational damage the auditors have identified ‘needs addressing and owning as a number one priority’.

The report by auditors Mazars looked into whether the council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The report said there were ‘actual significant weaknesses’ in the categories financial sustainability, governance and improving economy, efficiency and effectiveness.

In the summer of 2023, Bury council declared itself to be in a ‘state of financial distress’ and established a voluntary an improvement panel to review all its financial systems and processes. The report said that the 2022/23 accounts statement showed a declining financial position compared to prior years with the cash balance decreasing by £40.5m to an overdraft position of £5.7m.

Borrowing levels had increased by £23m when comparing the position in 2023 to 2022. The report said the 2021/22, 2022/23 and 2023/24 approved budgets all included significant use of reserves to balance the budget and total general fund reserves had fallen by £58.1m from 2021 to 2024.

The report reads: “Our overall conclusion is that there is a significant weaknesses in the council’s arrangements to deliver financial sustainability. The council will need to ensure any use of reserves to smooth the financial position over the next few years is properly planned.

“This is because the use of reserves cannot be relied on to provide a long term solution to funding gaps.” On efficiency and effectiveness, the report adds: “The council does not have a fully resourced procurement and contract management function.

“As a result, it cannot be sure the services it procures from third parties are being delivered in accordance with contract terms. “The council should take action to address this gap.”

Coun Bernstein, said: “This is another damning indictment on the financial, value for money and governance arrangements in Bury council. I will be ensuring that when the improvement plan comes before the special meeting in January it will have the political ownership of the Labour administration which to date has been sadly lacking. The reputational damage needs owning as a number one priority.”

A Bury Council spokesman, said: “We are considering the external auditor’s report and recommendation, and will bring our response back to the audit committee in January. “We have already acted on several matters in the report – so our response will include an update on our current position and a plan for addressing any residual matters.

“The report relates to the financial years from 2021 to 2023, and much work has been done since. “We still have more to do on some of the items identified and the action plan will be focused on driving timely and sustained improvement in those areas.”

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A Bury Labour spokesman said: “Well before this audit report was produced, we recognised that after 14 years of austerity under the Tories that things needed improving in certain areas of how the council operates and have taken comprehensive action to deliver this.

“We did this openly and transparently to show how committed we were to getting value for money for our residents. We are well underway in this work and look forward to demonstrating these improvements in the near future.”

The council’s response to Mazar’s findings and their actions on the external auditors’ recommendations will go before another meeting of the audit committee on January 9, 2025.