News

27.07.18

Northamptonshire ‘misappropriates’ £8m of ring-fenced funds to rescue cash-strapped services

Over £8m of cash ring-fenced for public health was spent on other cash-strapped services, an audit for financially-struggling Northamptonshire County Council has found.

An external report by auditor KPMG released yesterday found that the authority “misappropriated” £8.038m from a Public Health England grant, instead choosing to support activities that “do not meet the grant conditions.”

The news is the latest in a series of fiscal mishaps for Northamptonshire CC in recent months: last week a £70m potential budget shortfall forced the authority to issue another Section 114 notice, banning spending until further notice. This is Northamptonshire’s second spending ban in six months, after becoming the first council in 20 years to issue the notice in February.

The KPMG report said: “As a result of the misappropriation of Public Health Funds, we have extended our testing over other ring-fenced grants and have requested evidence from the authority that all terms and conditions for such streams of funding have been adhered to.”

The authority has proposed to Public Health England to reinvest £7.9m in public health activities, via the Public Health reserve, over a period of five years in equal instalments. Yet KPMG raised concerns that the five-year repayment proposal creates a risk that the finances of any successor unitary bodies “would be impacted” should they come into power in that time.

County council leader Cllr Matthew Golby said the financial challenge facing Northamptonshire CC “remains critical” and spending controls in place are vital to ensure the already limited funding is spent on only the essential services.

Cllr Golby added: “At the meeting next month, we as a council will discuss a set of priorities built around delivering statutory services and services for the most vulnerable in our communities, and this means there will be difficult decisions that have to be made.

“We remain committed to doing everything we can to identify the savings required to reach a more stable financial position whilst ensuring those in our communities at risk of harm are protected.”

The council appointed new CEO Theresa Grant last week to lead the council through an “unprecedented time of change.” Grant took the job after the acting CEO and chief financial officer quit the council at the beginning of July.

Government-appointed commissioners were in May.

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