Troubled Northamptonshire makes ‘unprecedented’ in-year turnaround
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Northamptonshire County Council has turned a projected overspend of more than £30m for 2018/19 into a budget surplus of £1m in a turnaround described by the authority’s executive financial director as “unprecedented”.
But the development will not preserve the financial-crisis-hit authority’s future beyond the next two years.
Yesterday, the government confirmed the county council and its seven lower-tier districts will be scrapped and replaced with two new unitary authorities from April 2021.
In a report to a meeting of Northamptonshire’s cabinet this week section 151 officer Ian Duncan said the council’s provisional outturn for the year to March 31 was an improvement of £31.1m on the in-year forecast overspend position reported when the authority issued a section 114 notice in July.
The notices, which are effectively an admission that an authority cannot meet its budget commitments, ban new expenditure on non-statutory services.
It was Northamptonshire’s second section 114 notice of the year and said that, taking into account the county’s brought-forward deficit from 2017-18, Northamptonshire had an overall forecast deficit of £60-70m, rising to £125m by the end of the 2019/20 financial year. The report to councillors this week says £41.5m of unfunded deficit still remains from 2017/18.
Duncan, who took up his post in November, said Northamptonshire’s 2018-19 progress had been secured “through the hard work and patient endeavour of staff at all levels across the council, working under the clear direction of a new cabinet and executive leadership team.
“The level of savings delivered in-year has been unprecedented,” he said.
“This provisional outturn position of a £1m underspend for 2018/19 has been achieved because of the successful delivery of budgeted savings of £24.8m, and savings from the stabilisation plan amounting to £8.2m.”
Adult social services made the biggest single contribution to the £24.8m figure, with an underspend of £10.3m. “Corporate costs” made the second-largest contribution, with an underspend of £5.5m. Children First Northamptonshire underspent by £4.7m.
Duncan said the budget had been balanced in-year without the use of the capital dispensation granted by secretary of state for local government James Brokenshire that would allow it to use capital receipts for revenue. Duncan’s report identified £76m of available capital receipts, more than half related to the sale of the authority’s One Angel Square building.
Duncan said the agreed capital dispensation could be used to deal with deficits inherited before the 2018/19 financial year.
He proposed using £41.5m to fund the total brought-forward unfunded deficit from 2017-18; £20m to create an un-allocated revenue reserve; and £8.5m to mitigate savings included in the council’s stabilisation plan that were not delivered.
Elsewhere, the report flagged issues with the Local Government Shared Services partnership – known as LGSS – run by Northamptonshire with Cambridgeshire and Milton Keynes councils, and which offers services to a range of other public-sector organisations.
It said there had been “a number of long standing, historic billing issues” between LGSS Law and Northamptonshire and that the authority was currently owed £1.78m by the entity, most of which relates to historic recharges of agency workers from 2015/16.
Duncan noted: “At present, the company’s cash flow position is not at a sufficient level to be able to repay this outstanding debt to Northamptonshire County Council, and as such, recovery of these sums are at risk.”
The reorganisation of Northamptonshire’s local-government map confirmed yesterday will create new unitary councils called North Northamptonshire and Northamptonshire West.
North Northamptonshire will bring together the current districts of Kettering, Corby, East Northamptonshire and Wellingborough. The West Northamptonshire authority will cover the districts of Daventry, Northampton and South Northamptonshire.
Announcing the government’s decision, secretary of state James Brokenshire said the new authorities would “usher in a new era for the county, transforming the way services are delivered”.
He added that education secretary Damian Hinds was “minded” to create a children’s trust to deliver social care for young people across the whole county on behalf of the two councils.
Brokenshire said the move would “ensure continuity” of services and followed the creation of effective children’s trusts in Doncaster, Slough and Birmingham.
