England & Wales Democracy, devolution and governance, Finance, Personal and organisational development

Northamptonshire on the brink


Things lurch from bad to worse in Northamptonshire. Following the issue of a second section 114 notice and a scathing letter to councillors from the Finance Director condemning years of financial mismanagement that have left the council on the brink of collapse and needing to find another £60 – 70 million saving this year.

The Commissioners who were appointed to oversee the running of the council in May have described the position as “truly perilous” and condemned the budget agreed in March as unrealistic.

On Wednesday night councillors met to agree priorities for a “core offer” that strips services back to a statutory minimum.

Unfortunately this raises more questions than it answers.

We have to remember that the council has already been through rounds of cuts. The budget agreed in March was the budget agreed after the auditors had rejected the original draft budget. Is there really £70 millions pounds worth of difference between what the council is doing now and their basic statutory obligations?

What would it look like simply to deliver a “core” statutory duties service? It’s easy to agree that in principle but then the hard work begins, deciding who does and does not meet statutory eligibility criteria for social care for example and what minimum level of provision meets the council’s obligations to those people. That’s all subject to interpretation and open to challenge.

What impact will that scaled back provision have: on individuals and on civic life; and what costs does it store up for the future?

The debate in Northamptonshire rapidly polarised into a question about whether this was caused by poor decision making or by structural underfunding of local government. But these two things are not mutually exclusive. We know that local government faces a funding shortfall of almost £8bn by 2025. In that context you would expect the places with the worst decision making to be the first to fall over.

Northamptonshire may be the most extreme example for now but industry finance experts such as CIPFA and the NAO differ only in their estimation of the exact numbers of councils that could find themselves in a similar position.

Local authorities have a legal duty to balance their budgets. They also have legal obligations to provide a basic level of service to the people they represent. The narrative around Northamptonshire is still that with one more push towards improved decision making these obligations can both be met. But it’s time we took seriously the possibility that they are just not compatible.

In the medium term there are things that could be done – changes to the way local government is financed such as the ones we set out in our local finance scorecard for example.

But none of that will help Northamptonshire meet its obligations this year. Can the circle be squared? I fear the people of Northamptonshire will be finding out the hard way?