News

09.01.17

District floats ‘unusual and undesirable’ request for county intervention

Daventry District Council is proposing to make an unusual call for government intervention in Northamptonshire County Council over its financial stability. The move comes after the county proposed removing all councils in the area – the county council included – and a brand new local government structure introduced.

A report by Simon Bowers, the Daventry business manager, for the council's strategy group meeting, has questioned whether the county council can deliver promised savings and avoid insolvency.

Bowers asked the group, who will discuss his report on 12 January, to invite Sajid Javid, the communities and local government secretary, to intervene in Northamptonshire.

The report notes: “It is recognised that this is an unusual and indeed undesirable step for one local government to take in relation to another, but it is suggested that the current circumstances are sufficiently unusual to justify it.”

Intervention under Section 15 of the Local Government Act 1999 has already been used on Rotherham and Tower Hamlets, both of which were judged to have failed because of governance problems.

However, recent fears have been raised that councils will be at risk of intervention because of financial shortfalls. Lancashire County Council, which faces a deficit of up to £400m, has been warned that it could require government intervention.

Bowers challenged Northamptonshire’s plans to make the necessary savings, saying that it is only avoiding running out of reserves this year through using capital receipts. This is normally unlawful, but has been temporarily allowed by the DCLG.

He also noted that even if all the proposed savings were delivered, Northamptonshire would have a £20m deficit in 2018-19. He concluded that Northamptonshire’s financial situation was “grave” and put it at “substantial risk” of insolvency.

Bowers therefore said that it would be better to ask Javid to intervene now, rather than running the risk of Northamptonshire failing financially, which would make an intervention mandatory anyway.

In addition, he argued that introducing a unitary authority would be inappropriate for the area, fail to solve Northamptonshire’s financial problems, and distract from the goal of health and social care integration in the area.

Bowers added that district and borough councils would be needed to provide local government in the area if Northamptonshire failed.

However, Heather Smith, leader of Northamptonshire CC, said that the suggestion there isn’t a credible plan to deliver savings is “misinformed” and that plans to create a county unitary would deliver “value for money” for the taxpayer.

Research from the County Councils Network suggests that replacing 27 two-tier authorities with unitary authorities would generate savings of up to £2.9bn, helping to offset the financial challenge facing councils.

Dorset has also proposed abolishing its nine councils and replacing them with two unitary authorities, despite opposition from Christchurch Borough Council.

(Image c. Joe Giddens from PA Wire/ PA Images)

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