James Brokenshire announced yesterday the government had granted the council’s request to use £70m of capital receipts to balance its books.
This followed a report from government-appointed commissioners, who warned the council was facing an unfunded deficit of £35m for 2017-18.
The government called the ‘stabilisation plan’ – which is employing a method technically known as a ‘capitalisation dispensation’ – a “significant step”, which “will help the council reduce its deficit and put it on a more sustainable financial footing”.
Communities secretary James Brokenshire added: “Since this report [the commissioners’], Northamptonshire County Council has taken the positive step of agreeing the stabilisation plan and made significant progress appointing a new chief executive and a new finance director, which has instilled a positive cultural change.
“There is still much to do, but I fully support their resolve to ensure the people of Northamptonshire receive the efficient, effective and sustainable services they deserve”.
Northamptonshire council drew up the stabilisation plan and agreed to in September, before handing it to the commissioners, who then submitted it to the government for approval.
Matt Golby, leader of the council, said: “I am delighted commissioners have been successful in their request for a capital dispensation.
“This will enable us to use our own resources to tackle the £35m deficit form 2017-18 and replenish our reserves to put us on a sustainable financial position”.
The commissioners in their reported suggested the council should take certain actions to alleviate their financial position. These included freezing all non-essential spending, for council service directors to identify ‘in-year’ savings and for all non-essential spend to be challenged by finance officers.
They wrote: “The development of a stabilisation plan … will draw together the actions [suggested]. This will be rigorously managed and progress reported monthly to Northamptonshire’s Cabinet.”
Brian Roberts, one of the two Northamptonshire commissioners, has written to CIPFA to clarify that there was nothing “inappropriate” about the compiling of their report and “normal procedures and accounting practices” had been followed.
It is important this is “understood by the media and the public more widely”, Roberts told CIPFA.
In April the council agreed a 35-year sale and leaseback deal on its headquarters worth £64m.
