Sweeping changes are being made to the way Brightlingsea Town Council manages its finances following a critical report by an external auditor.

The changes come after the council found it was overspending by thousands of pounds a year and making up shortfalls from reserves. They also follow the resignation of a councillor who said she was bullied and had expressed concerns over the council’s financial management.

The report – for which the council paid £645 – was carried out by Trevor Brown, a chartered accountant with extensive local government experience. He found “significant issues that should be addressed” including:

• The need for the town clerk to receive “urgent appropriate support” to complete the council’s end-of-year accounts;
• The appointment of a Responsible Financial Officer (RFO) to take over the role from the town clerk, leaving her more time to deal with “essential govenance issues”;
• Bank deposits “significantly in excess” of the £85,000 threshold for protection under the Financial Services Compensation Scheme;
• Details of payments made by the council not being published on the council’s website to “secure transparency in the council’s financial transactions”;
• The council’s website needing to “be reviewed as soon as practicably possible” to improve the accessibility and display of financial and other information;
• Policies relating to compliance with data protection and freedom of information needing to be adopted and published;
• The council’s Strategic Plan 2022-2026 not providing “an adequate framework” for identifying future projects and the financial planning needed to implement them.

Lack of training

The report found that although the council’s accounting software was capable of generating the reports required to keep budgets on track, during 2022/23 and for much of 2023/24, a lack of staff training contributed to them not being given to councillors.

“This resulted in a failure to monitor and control costs throughout the two financial years with the result that there has been a significant drawing upon general reserves which proved unsustainable,” said the report.

The council’s annual audits showed that reserves at financial year end declined from £301,327 in 2021 to 133,541 in 2023. At the end of February this year, the council held £112,434 in current and reserve accounts.

The report noted that “over the past two years it had been a requirement for the council to use its reserves to support an annual shortfall in income over expenditure”, mainly due to increases in wages, maintenance and everyday running costs.

As a result, the council has increased its precept – its share of council tax – by 15% for the 2024/25 year, which will raise £231,525. This is about £30,000 more than in the previous year and, combined with a revised budget and tighter controls, is expected to lead to a surplus of £25,000 by the year end.

At the March full council meeting, councillors adopted recommendations made by an earlier meeting of the council’s finance and property committee.

These included appointing an RFO, possibly as a contractor rather than an employee. organising more training on the accounting system for staff, producing risk assessments and other recommended documents, improving the website and seeking advice from the Essex Association of Local Councils to help appoint a suitably-qualified internal auditor for the year to 2024/25 year.

In addition, the council will review all of its vehicle and business machine leases, produce an updated price list for recreational events and hall hire. streamline sales over the counter in the council’s office and review preferred contractors and the rates they charge.

New bank accounts have been opened and reserves will be moved so that sums on deposit are protected. One new account, with Unity Trust Savings, will pay interest of 2.7% against a previous Barclays account paying just 0.05%.

Public excluded

Following the public part of the full council meeting, councillors met in private and discussed recommendations by its facilities and community assets team, including:

• Spending £1,440 on a survey of the area of the town hard known as Pannell Land and oyster layings to “firmly establish council’s exact ownership”. Ownership of parts of the hard and surrounding areas has been the subject of considerable controversy over several years, with the council spending large sums on legal and other fees as a result.

• A proposal to write to the owner of the unfinished Bateman’s Tower Café – sited on council-owned land at the end of Promenade Way – stating that “Council is minded that if no material progress is made by the 30th June 2024 the council will instigate proceedings to recover your lease”.

The council declined to say if the proposal was adopted – or what might happen should the lease be taken back – when asked by Brightlingsea Info.

Town mayor Ric Morgan said: “This item was discussed at the last meeting, and a decision was made.  Due to the personal nature of the landlord’s lessee, no further information can be given at this time.”

The council also issued as statement: “Council is in correspondence and dialogue with our tenant who has a current lease for Batemans Tower Café.  Council is aware of the ongoing issues and are discussing with the lessee a way forward to get the situation resolved.  The Council is fully aware of the importance of this strategic site and would welcome a speedy resolution.”