Northants balances books using ‘unprecedented’ level of reserves

11 May 18

Northamptonshire County Council has managed to balance its books for 2017-18 but has had to use an “unprecedented” level of reserves.

The local authority faces having to recoup £13.7m in reserves in the current financial year with “further savings and mitigating actions” required, a provisional output report to the cabinet noted this week.

The report said this “unprecedented situation” with “extremely limited reserves” meant the financial position of the council was now its “top priority”.

Michael Clarke, cabinet member for finance, promised:  “We will need to replenish our reserves and the challenges of the next few years are very clear, but the county council has shown that it does not shy away from the big decisions, such as the sale and leaseback of One Angel Square [the council’s headquarters] in the current financial year.”

He added: “This new determination will help deliver for the people of Northamptonshire while we develop plans with our partners for unitary local government in the county in 2020.”

A government-commissioned report published in March recommended the council was split into two unitaries.

The council has been left with just £4.3m in reserves after it was forced to raid £17m of its rainy day cash to meet a £12.7m overspend in 2017-18.

The end of year finances will now be subject to external audit.

The communities and local government secretary has also named the two commissioners who will oversee the council’s finance and governance this week.

James Brokenshire has said Tony McArdle, former chief executive of Lincolnshire County Council, will lead the commissioners.

Brian Roberts, former CIPFA president and former deputy chief executive of Leicestershire County Council, will support McArdle. The two will be in place until March 31 2021 and update the secretary of state on progress every three months.

The commissioners will work alongside the improvement board, ratified by the Cabinet on Tuesday this week.

Matthew Golby, leader of the council, also made a commitment this week to work with borough and district councils to create a unitary authority in Northamptonshire.

“Unitary governance is one of the most divisive subjects in local government, but I am committed to working closely with my borough and district council colleagues towards developing a proposal that we all support,” he said.

The secretary of state has advised Northamptonshire that a single unitary authority would not be possible, and each new unitary should have a population of about 300,000. The county’s current population is more than 750,000.

The unitary councils are expected to be created by Parliament in April 2020.

Northamptonshire agreed a £64m 35-year sale and leaseback deal for its headquarters with Canada Life Investments last month.


Northamptonshire County Council Timeline

 

January 2018 - Sajid Javid sends in inspector to investigate the council’s financial management.

February 2018 - the council issues the first ‘section 114’ notice in 20 years, banning all spending except on statutory services.

February 2018 - the council plans to sell off their brand new headquarters to generate cash.

February 2018 - auditors warn the council’s budget may not be lawful.

February 2018 - the council pass a revised budget.

March 2018 - inspector Max Caller publishes report recommending the county is split into two unitaries.

March 2018 - council accepts the reports findings - leader Heather Smith steps down.

March 2018 - Javid announces that the council will continue to make majority of decisions despite government commissioners’ involvement.

April 2018 - Matthew Golby appointed new council leader. 

April 2018 - Leaseback agreement of headquarters is agreed.

May 2018 - Council announces plans to set up improvement board.

May 2018 – Council balances its books with the use of reserves.

May 2018 – Commissioners are announced by new secretary of state Brokenshire.

 

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