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Northamptonshire set to lift section 114 notice

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  • by Colin Marrs
  • in 151 News · Resources
  • — 28 Mar, 2019

Northamptonshire County Council is set to lift its section 114 notice due to the upturn in the council’s finances.

A statement from the council said that commissioners sent in to oversee the authority’s finances believe the council’s forthcoming monitoring report means the notice that stopped new spending , imposed in July last year, can be removed.

In February, Room151 reported that the authority is set to balance its 2018/19 revenue budget, just months after its former director of finance issued a section 114 notice predicting a £64.4m overspend.

Speaking this week, council leader Matt Golby said: “Earlier this year I said that all indications were that we were turning a corner and we had successfully built stability back into the council’s finances.

“Today’s announcements by the Commissioners further underlines this point. We are due to publish our latest monitoring report next Monday and all indications are that we are now balancing our budget. Given that at one point the deficit stood at £64m this is an incredible achievement.”

He said that the council would still maintain strict financial controls and would never again be complacent.

In February last year, the council became the first authority in 20 years to be issued with a s114 notice due to the financial crisis engulfing it.

However, that notice only covered the 2017/18 financial year, and in July the council’s director of finance, Mark McLaughlin, who had already tendered his resignation, issued a new notice owing to a forecast overspend of up to £70m in 2018/19.

In his report, McLaughlin said: “Services were asked…to come up with meaningful further in-year savings proposals.

“No realistic proposals, other than the mitigation of existing pressures, were provided and so I must assume that this process is unlikely to yield additional savings.”

He added that the council “has no financial resilience” and that the budget target of using £30.9m of capital receipts as revenue funding under government transformational expenditure rules was “unlikely to be achieved in full”.

Work on the preparation of the accounts for 2017/18, and audit work carried out by the council’s external auditor, KPMG, had identified a significant risk that the council would have an unfunded deficit as at 31st March 2018.

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