Bristol City Council suffered a “serious collective failure of leadership” which led to a budget deficit of nearly £30m, a report has found.
It said the council had had one of the country’s “weakest” finance functions, while officers had lacked professionalism and had been “artful” in their calculations, and “misled” councillors.
The report was commissioned by elected mayor Marvin Rees (Lab) after Bristol in June discovered a budget deficit of £29.1m. Mr Rees last May defeated his predecessor George Ferguson (Bristol First).
In his report former Audit Commission chief executive Steve Bundred said: “It would be wholly wrong for any individual to be singled out for censure…because I am in no doubt that the sequence of events described in this report represents a serious collective failure of leadership within the council for which several people, including politicians, must take responsibility.”
Mr Bundred found Bristol relied for savings on a ‘change programme’ based on plans that “cannot properly be described as a business case”, and which was overseen by an unmanageable 30-strong board.
“The change board was wholly disconnected from the council’s budget preparation process,” he found.
Change programme reports were “inadequate in important respects” and “consistently over-optimistic…even in the face of contrary knowledge within the council, to the extent that members were undoubtedly misled”, the report added.
Mr Bundred detailed how a year ago Bristol set a budget on incorrect assumptions.
He said by February 2016 officers knew assumed savings in 2014-15 and 2015-16 totalling £18.9m had been reflected in the base budgets for 2016-17 but not delivered.
Councillors though approved the 2016-17 budget on the assumption that all previously agreed savings had been delivered in full. “This assumption was false”, he noted.
By 8 March 2016 officers believed there was a budget gap of £28m-£35m, but councillors “continued to receive reassuring reports throughout March and April 2016” by which time officers “were assuming, but did not inform members, that a balanced outturn in that year would most probably be achieved through the use of reserves. This can at best be described as artful.”
Mr Bundred concluded: “Over a sustained period of time, officers did not display the degree of professionalism that the mayor and [councillors] were entitled to expect.”
His most urgent recommendation was for Bristol to “greatly improve the quality of its finance function, modernise its role and enhance its status”.
The finance directorate had been “one of the weakest I have encountered, certainly by reference to a city of Bristol’s size and stature”.
Mr Rees said: “I inherited a deeply troubling financial challenge and promised this independent report to help us understand the causes and how we could put things right. We are undoubtedly making fast and strong progress already.
“We know where there are issues and are already putting many of the fixes in place. This means the public, our partners and councillors can be confident in our budget plans for next year, something which the report confirms.”
Chief executive Nicola Yates left shortly after Mr Rees’ election. She was replaced on an interim basis by former Birmingham City Council chief executive Stephen Hughes, who has been succeeded by Anna Klonowski.