• Home
  • About
  • Newsletters
  • Conference
  • TMS Links
  • Calendar
  • Log In
  • Register

Room 151

  • 151 BRIEF

    What's New?

  • London CIV launches sustainable equity fund

    April 19, 2018

  • Council funding boost for stadium for Cornwall

    April 18, 2018

  • Herts creates development joint venture

    April 18, 2018

  • Half of councils ‘draw down on reserves’

    April 18, 2018

  • Northants completes HQ sale

    April 18, 2018

  • Ashford adopts commercial property strategy

    April 18, 2018

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • Agent 151
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • David Green
    • Richard Harbord
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
    • Stephen Sheen
  • Interviews
  • Jobs

Agent151: Northamptonshire’s section 114 – the Ghost of Christmas Past

0
  • by Agent 151
  • in Agent 151 · Blogs · Funding
  • — 7 Feb, 2018

Under control: Northants’ spending statement

Northamptonshire council’s posting of a section 114 notice illustrates the county’s funding plight. Agent 151 wonders whether government will respond with more funding or continue to be a Scrooge.

Dickens has a story for all occasions. In A Christmas Carol Scrooge receives visits from four ghosts warning him that unless he changes his ways he is doomed to an unhappy end. Transformed by the experience, Scrooge saves himself (and Tiny Tim, in the process) and becomes the very personification of Christmas.

The government, cast by its own austerity policy in the role of the miserable miser, must surely realise that in Northamptonshire County Council’s plight it is encountering its very own first ghost.

The appointment of a government inspector under section 10 of the Local Government Act 1999, in the form of Max Caller, former chief executive of Hackney Council — where the last section 114 was issued 18 years ago — foreshadowed the issuance of a section 114 notice for Northants by less than a month.

The inspection was said to have been triggered by a second adverse value for money opinion from auditors KPMG, which identified “weaknesses in the compliance with proper financial and other processes” in some areas. The inspector’s role, to carry out an inspection of compliance with the best value requirements, was pitched by the secretary of state, Sajid Javid, as an investigation into “allegations of failures in financial management and governance”.

However, it is not clear yet that these allegations, although self-evident in light of the section 114, have pinpointed the root causes of Northamptonshire’s troubles.

Steel

It has been suggested by some that the inspection was not caused by the auditor’s report so much as by the very high profile Northamptonshire had achieved in the media in lobbying for more funds.

Some have gone further and speculated that the intervention was at the request of Northamptonshire itself, which had reached an internal stalemate and was simply unable to take the decisions needed to extricate itself from its problems. It is unlikely that the truth of the matter will fully emerge.

The diagnosis offered by the council leader of a “perfect storm” of increased demand and severe cuts is a diagnosis that could be applied to most councils.

Northamptonshire is historically a poorly funded council and thus facing more pressure than many. However, it seems likely that the real problem is that the decisions needed in order to balance the books have proven too difficult to take.

It is always possible to cut services. It is always possible to ration more stringently. It is always possible to find more efficiencies. Not having the appetite to change the strategy, or to take things that far, is the point at which the crisis is precipitated.

Intervention by the government provides the steel required to make the unpalatable decisions. Absolved of the responsibility for the inevitable cuts, the politicians are able to function again and time is created in which future arrangements can be negotiated and agreed.

The section 114 notice, a measure no doubt encouraged by the inspector, imposes immediate spending controls on the organization. No new expenditure — other than on statutory services for safeguarding vulnerable people — will be allowed, and councillors must meet within 21 days to discuss the implications of the notice. This meeting is scheduled to take place on 22nd February.

Signs

The government should take note that Northamptonshire’s crisis is a sign that after many years of finding budget reductions and simultaneously increasing resident satisfaction, councils no longer have the stomach to keep going.

Due to the referendum limit on council tax increases, which is effectively a cap by another name, there is no straightforward solution. Rob Whiteman, Chief Executive of CIPFA, recently tweeted that he has advised the government that more section 114 notices will be issued in the coming years as council reserves deplete and the demand for services continues to grow.

Local authority residents, cast in the role of Tiny Tim, continue to suffer as funding for councils continues to diminish. We can only wait in anticipation for the resolution of the story: will the miserly government realise the error of its ways and fund local services adequately? How many section 114s will it take? Or will it refuse to change and, as an inevitable consequence, face the grim reaper at a future election?

Agent151 is a senior local authority finance director and s151 officer writing exclusively for Room151.

Get the Room151 Newsletter

Share

You may also like...

  • Consequences of Greek turmoil 9 May, 2012
  • Agent151: Nuclear chickens and the cost of caring for the elderly 8 Feb, 2017
  • Euroland update part 1:Spain in crisis Euroland update part 1:Spain in crisis 13 Feb, 2012
  • Do stellar returns mean LGPS has cracked the secret to being a good investor? 1 Nov, 2017

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register for the Room 151 Weekly Email Digest

  • Latest tweets

    Room 151 2 hours ago

    Herts agrees JV with Morgan Sindall to develop 500 homes: Hertfordshire County Council has signed a deal to create a 50/50 development joint venture with construction firm Morgan Sindall. The council will use its standalone company, Herts Living Ltd… dlvr.it/QQ5ZZg

    Room 151 7 hours ago

    #localgov @JRolfe67 #housing #regeneration twitter.com/SHJFitzgerald/…

    Room 151 7 hours ago

    London CIV launches sustainable equity fund room151.co.uk/brief/#london-… #localgov #lgps

    Room 151 7 hours ago

    #localgov twitter.com/Rebecca_DTZi/s…

    Room 151 8 hours ago

    Newham in danger of missing deadline to publish accounts: The London Borough of Newham is in danger of missing its deadline to publish audited financial statements due to a lack of capacity in its finance team, according to auditors.[...] dlvr.it/QQ3RFn pic.twitter.com/S35NTpUMSJ

    Room 151 11 hours ago

    Enfield funds new housing association with right to buy receipts: The London Borough of Enfield has agreed to fund the creation of a new housing association in which it will take a minority stake, in order to spend £50m of[...] dlvr.it/QQ2hqH pic.twitter.com/Q8Dc5eQuyY

    Room 151 1 day ago

    Council funding boost for stadium for Cornwall room151.co.uk/brief/#council… #infrastructure #development

    Room 151 1 day ago

    Herts creates #development joint venture room151.co.uk/brief/#herts-c… #housing #property

    Room 151 1 day ago

    Half of councils ‘draw down on reserves’ room151.co.uk/brief/#half-of… #localgov #lgps #treasury

    Room 151 1 day ago

    Northants completes HQ sale room151.co.uk/brief/#northam… #localgov

    Room 151 1 day ago

    Ashford adopts commercial #property strategy room151.co.uk/brief/#ashford… #localgov #lgps #housing #treasury

    Room 151 1 day ago

    Government's terms for #businessrates review published room151.co.uk/brief/#terms-f… #localgov #mhclg

    Room 151 1 day ago

    Good chat with LPP's Chris Rule about #LGPS investment in #housing and #regeneration @LPFA1 room151.co.uk/interviews/lgp… #localgov

    Room 151 2 days ago

    #localgov #lgps twitter.com/kshackleton1/s…

    Room 151 2 days ago

    LGPS Pools Roundup: Access appoints Link, CIO for Border to Coast, Central launches funds, new chair for Northern Pool: ACCESS Link wins pooling contract ACCESS  has appointed Link Fund Solutions Ltd to establish and operate its authorised contractual… dlvr.it/QPq8BJ

    Room 151 2 days ago

    Five LGPS funds invest £100m in the private rented sector: Five pension funds agreed last year to commit £100m to a fund aimed at building and managing housing in the private rented sector. Room151 reveals how it came about. The[...] dlvr.it/QPq00D pic.twitter.com/MHjD2vWny2

    Room 151 2 days ago

    Changing the Guard: New Fed leadership and what’s ahead for the world’s most important central bank: Sponsored Article: A change in leadership often sparks intrigue from investors—particularly when the leader is the chair of the world’s most important… dlvr.it/QPpzwx pic.twitter.com/9JWmWJXLzq

    Room 151 2 days ago

    LGPS Q&A: Chris Rule of Local Pensions Partnership on housing and regeneration: Interest in housing and regeneration among institutional investors is growing. In an exclusive interview for Room151, Chris Rule discusses the Local Pensions Partnership’s… dlvr.it/QPpqBS pic.twitter.com/CwuKp8m2ur

    Room 151 2 days ago

    Jeff Houston: LGPS and investment cost transparency: The LGPS Advisory Board has been the first to sign up to a new disclosure template for investment costs. Jeff Houston explains what’s happening and why. It seems a very[...] dlvr.it/QPpq0Y pic.twitter.com/gxW8PinJpX

    Room 151 2 days ago

    Karen Shackleton: The cost conundrum of active managers: LGPS is in a better position to assess the cost of active managers, even if it remains difficult. It is common sense to take costs into account when judging the[...] dlvr.it/QPpfZ1 pic.twitter.com/gfVirgWcy2

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Cllr John Clancy
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
  • Archives

    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Graham Liddell: Could you miss the IT revolution?
  • Next story Local government leaders call for IFRS9 statutory override

© Copyright 2018 Room 151. Typegrid Theme by WPBandit.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.OK