Heather Jameson 24 July 2018

Northamptonshire CC issues second emergency spending ban

Troubled Northamptonshire CC has issued a second Section 114 notice in a bid to regain control of its ‘truly perilous’ finances.

The move comes as the council revealed it is facing a potential budget shortfall of £60m-70m in the current financial year with no plan as yet as to how to balance the books.

Council leader Matthew Golby said the financial situation ‘remains critical’ at the beleaguered council, which is currently subject to a Government intervention.

‘The spending controls we have in place are vital to ensure we are focusing our limited funding on only the most essential services,’ Cllr Golby said.

‘We remain committed to doing everything we can to identify the savings required to reach a more stable financial position whilst ensuring those in our communities at risk of harm are protected.’

Finance commissioner, Brian Roberts, said: ‘We are fully supportive of the issuing of this Section 114 which underlines the truly perilous state of Northamptonshire CC’s finances.’

‘We have been very clear that we did not arrive in Northamptonshire with additional money and that to put itself on a secure financial footing very difficult decisions will need to be taken. It is clear the time for these decisions is now.

‘It will require a determined response from the council to do everything in its power to address this significant financial shortfall, while protecting vulnerable people. We will ensure that such a response is made.

‘All that is required of the council is that it lives within its means, just like every other council. This is harder than it should be given the over-expenditure of recent years but not impossible.’

An extraordinary meeting of full council will take place on 1 August to discuss the s114 notice and the financial path ahead.

Chief executive of the Chartered Institute of Public Finance and Accountancy (CIPFA), Rob Whiteman, said other councils should learn the lessons of Northamptonshire to avoid financial mismanagement elsewhere.

He said: ‘The NAO’s most recent financial sustainability report points out that 10% of upper-tier authorities are similarly vulnerable to financial failure. That could be more than twenty councils at risk along with the essential services for several million citizens. Understanding and acknowledging the scale of pressures, and responding early, to financial stress is essential to avoid seeing more councils fail.’

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