East Herts Council review reveals budget disagreement between chief executive and head of finance

A budget disagreement between two of East Herts Council’s (EHC) senior officers has been highlighted in a new review.

The chief executive, Richard Cassidy, and the head of strategic finance and property, Steven Linnett, were at odds over how risks should be presented to councillors.

Andrew Hardingham, the former director of finance at Plymouth City Council, looked at the process that shaped this year’s EHC balance sheet.

His desktop review was the first part of a Local Government Association (LGA) ‘finance peer challenge’ at East Herts and covered the first council tax set by the new Green and Liberal Democrat administration based on figures provided by officers.

Mr Hardingham said: “The budget report can, at best, be described as a summary. There is no detail and no disclosure or discussion of options.

“Risks associated with the impact of savings are included on the individual savings proposal but there is no disclosure as to delivery risks. The plan to dispose of in excess of £10m of assets is needed to reduce the cost of debt. Future years’ budgets are heavily reliant on the success of this strategy as debt.”

Mr Hardingham highlighted concerns about Hertford’s £30m new theatre BEAM: “There is no risk analysis concerning the commercialisation of the theatre, but future budgets rely on the income growth.

“The council has invested heavily in the Hertford Theatre and must now ensure that the commercial approach achieves the income targets needed to meet the budget targets. Relying on income from such a cultural venture could be considered risky.”

He said: “Overall, the budget approach is sensible in the current climate, but the analysis to support what is a very scant report is missing.”

The council’s response to risk reporting revealed that Mr Linnett’s team had prepared a risk schedule for delegated savings.

“The chief executive [Richard Cassidy] gave an instruction not to include the schedule with the papers.

“The schedule was prepared and the head of strategic finance and property advised it should be published but was overruled,” the response notes.

Mr Hardingham reported: “Members within the administration feel that information delays have affected the new administration’s ability to monitor financial performance and there is no monthly dashboard provided for finances.

“Without more effective budget monitoring, the council is seeking confidence that the decisions it is making are the most sensible going forward.

“Significant risk surrounds the ability to deliver the identified 24-25 savings and there are further major challenges to identify a further balanced budget for 25-26.”

In documents presented to the audit and governance committee last Wednesday (September 25), it was confirmed that “a formal risk assessment will be included with the budget papers for the 2025-26 budget to increase transparency”.

Mr Cassidy left the authority suddenly this month and Mr Linnett is to retire next month.