Javid sends inspector into ‘failing’ Northamptonshire Council

10 Jan 18

Sajid Javid has sent an inspector into Conservative-controlled Northamptonshire County Council following allegations of financial management failures.

He warned he could intervene in the county’s management if the inspection made adverse findings.

The housing, communities and local government secretary said in a statement to MPs: “For some time there have been concerns about financial management and governance at Northamptonshire County Council, and in recent months a number of reports have been published, which have led me to question whether the authority is failing to comply with its best value duty.”

Javid noted auditor KPMG gave adverse value for money opinions on the 2015-16 and 2016-17 accounts, and that last September a Local Government Association peer review raised further alarms.

He said the inspector - former Barnet and Hackney London boroughs chief executive Max Caller - would seek “to better understand the authority’s compliance with its best value duty” in particular concerning Northamptonshire’s corporate governance and financial management systems. Caller is due to report by 18 March.

Javid added: “This decision is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government.”

Council leader Heather Smith said: “We welcome the announcement that the government will be conducting a best value inspection.

“We have been very clear with senior government ministers and civil servants about the issues facing the county and the growing financial pressures we are facing.”

Northamptonshire last September launched a ‘fair funding’ campaign, citing “one of the fastest growing populations in the country…but the government’s current funding formula does not take into account today’s demand levels and population data”.

In December, it said the local government funding settlement “shows no recognition of the authority’s severe financial challenge and unprecedented demand for services”.

The LGA review warned “time is running out” for the county, and that as of last September it still lacked a deliverable plan for a balanced budget for 2018-19.

It said: “The financial situation looks very serious. The peer team got the sense that the council is banking on the ‘hope’ that it will be bailed out by the government in 2019-20, because it believes other councils may also find themselves in a similar position.”

Northamptonshire’s seven district councils have employed consultant Deloitte to examine potential reorganisation options for local government in the county. It is due to report later this month.

The county council wants a county unitary but the districts have resisted this and want more than one new council created in any reorganisation.

The districts have also proposed setting up a health and care company with political oversight to bring the two services together.

Northamptonshire and Cambridgeshire county councils jointly own Local Government Shared Services (LGSS), one of few such joint ventures to have successfully won contracts with other authorities.

A Cambridgeshire spokesperson said: “We do share some back office services with Northamptonshire County Council, but our governance - both financial and democratic - are completely separate.

“We also have different external auditors and so have no concerns that any investigation undertaken at Northamptonshire County Council will have implications for us.”

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