Reading Council's Audit Scandal Costs £1 Million

An account auditing scandal which led to Reading council having to pay hundreds of thousands of pounds has been remembered nearly 10 years on.

Nearly 10 years on, an account auditing scandal that forced Reading Council to pay hundreds of thousands is being recalled.

Following coalition reforms and the Local Audit and Accountability Act 2014 — which led to the closure of the Audit Commission in 2015 — councils' accounts have to be checked by external auditors.

In 2016/17 problems with Reading's accounting meant the external audit cost roughly six times the original fee of £108,938. The council ended up paying between £600,000 and £708,000.

Late account closures from 2019/20 to 2022/23 mean the total cost of these audits is now expected to top £1 million.

Members of the council's audit and governance committee reflected on the issues while noting the closure of accounts for 2024/25. That discussion included the "annual governance statement", a review of the year's accounting.

Cllr Josh Williams (Green, Park), chair of the committee, said: “Some of the statements made would raise eyebrows.

“The document claims the council has a strong record of delivering services within budget, which implies we don’t use reserves.

“It also claims a strong track record of producing annual accounts within statutory deadlines, which I think is something we’re moving towards, not necessarily something of which this council has a strong track record.

“It contains some typos. It makes a comment on political leadership, which it determines to be strong. This isn’t the committee to debate whether or not political leadership in the administration is either strong or weak; we can do that elsewhere, but it’s fair to say my own views don’t align with the document.”

Reacting, Cllr David Stevens (Labour, Abbey) said: “To suggest we had this long period where everything was a disaster is [not] quite right.

“We had a long period where, year after year, we had unqualified opinions, then we hit this storm.

“It all came in that particular year. To suggest our direction of travel is heading for disaster is unfair, and is not representative of what happened.

“And it was all over reporting, there was no hint of impropriety, fraud or irregularity, that was not the suggestion, it was simply that certain accounts were not maintained in the way the auditor wanted, and it was taking a lot of time and effort to present them in a certain way, and that's what caused the problems.”

Cllr Stevens was chair of the committee since its foundation in 2011. He was a Conservative at the time, defected to the Labour Party in 2022 and lost his place on the council during the all‑out elections, ending his 18‑year stint as a representative. He was re‑elected as a Labour councillor in 2024.

Cllr Finn McGoldrick (Labour, Norcot) said: “Just to clarify, I’m not sure the entire committee shares your concerns on presentation, so I don’t think it would be a fair reflection that the committee has taken a view on the report for next year.

Cllr Williams replied: “Oh no, quite, I was only expressing my opinion.”

Councillors agreed to note the closure of the 2024/25 accounts at the meeting on January 20, ahead of them being reported at a full council meeting.

James Aldridge, Local Democracy Reporter