DUDLEY Council needs to take urgent action to address its financial instability according to the Local Government Association (LGA).

Following a peer review the LGA said reserves are low and auditors were considering measures which could result in a similar financial meltdown to the one experienced by Birmingham City Council.

The review also said the council needs to take another look at how it is funding ambitious regeneration plans in Dudley town centre.

Dudley Council’s leader, councillor Patrick Harley, said the situation had already improved and there was no need to panic.

Cllr Harley said: “They are critical friends, we asked them to come in and give us an MOT.

“The LGA was slightly spooked by the external auditors. Auditors like big reserves which is fine until we have a bump in the road which for us was social care.

“We are a low tax, low reserves authority. The auditors are concerned about if we have another big financial issue not of our own making.”

The LGA report said the council has around £3m in reserve and may need up to £15m for the 2023/24 financial year.

Cllr Harley said there was much more in the bank since the LGA inspection and also rejected LGA concerns about regeneration costs to the council.

The LGA report, published on Tuesday December 5, said: “The peer team recognise that the council is passionate for the future of the place and has an impressive and ambitious regeneration programme for the borough, particularly within Dudley. 

“However, this must be accompanied by the completion and adoption of the Economic and Regeneration Strategy which is underpinned by a realistic and costed delivery plan.”

Cllr Harley said: “Most of the regeneration stuff is already funded by external partners, we are not going to do a Birmingham or Coventry, it is about having a level head and business acumen.”

Dudley Labour’s financial front bench spokesperson, councillor Shuakat Ali, said: “As a Labour group we had been raising this for some time, the first we knew of the seriousness was the auditor’s report in July.

“They were unhappy with the governance and the decision making. We raised those concerns at the audit committee, our calls fell on deaf ears.

“The council is in a dire financial situation, there are going to be cuts to frontline services which people really use.”

Cllr Ali also was also worried about using external funding for regeneration in Dudley.

He said: “External investors have to have confidence in the local authority.

“If the authority is facing bankruptcy it is sure to put investors off.”