Dudley Council’s leaders are being accused of ignoring early warnings about financial meltdown from the authority’s own audit committee.

An email from the chairman and vice-chairman of the watchdog group to the council leader, deputy leader and cabinet member for finance, Cllr Steve Clark, in July 2023 highlighted fears about the council’s budget and called for an assurance the leadership recognised the problems.

In details made public at the latest audit committee meeting, Cllr Clark responded with a one-word answer, saying the concerns were ‘noted’. Labour’s finance spokesperson, Cllr Shaukat Ali, said:

“The response is contempt for the committee, they should have come back with a comprehensive plan, it looks like the leadership sat on their hands.”

In the email, dated July 5, committee chairman, Cllr Angus Lees, refers to a private briefing from the council’s external auditors. The email says: “I have attached pages and highlighted areas which clearly show the auditors’ concerns especially around the position of our reserves, our financial sustainability and the council’s inability to deliver against the budget set out in March 2023 and failure to deliver the £7.8 million in savings from previous years.

“Both I, and my vice-chair, Cllr Borley, wanted to raise our concerns regarding these issues with you prior to Cabinet.”

The council faced a financial shock in October when a forecast budget black hole of £15m  prompted warnings from the authority’s chief accountant that he may have to follow Birmingham City Council and declare a Section 114 notice – effectively saying the council was bankrupt. Dudley Council leader, Cllr Patrick Harley, said:

“It’s just hot air from Cllr Ali. We called in the LGA (Local Government Association) for a peer review and set up the Independent Improvement Board.

“Dudley has moved away from a 114 situation without impact on frontline services apart from the charge for green waste bins, this shows we have not sat around.”

Cllr Harley is also happy with Cllr Clark’s response to the committee, he said: “There have been conversations offline. They were told the LGA review was coming and would have been kept informed at all stages.

“It was very clear what we were doing, that was related to the audit committee several times.”