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Northamptonshire: ‘Radical’ service cuts planned as deficit threatens to hit £180m

The financially-ruined Northamptonshire County Council has released an action plan proposing “radical” service cuts across the entire service landscape as its members revealed that a potential £180m deficit by March 2021 is not out of the question.

The action plan, drawn up in response to its second section 114 notice issued last month, will be discussed at a council meeting next Thursday.

It outlines a string of potential service reductions across the board in order to recover its flailing budget, which currently faces a massive funding blackhole of up to £70m. 

This includes extended controls on spending, including approval for all expenditure over £1,000; radical cuts to children’s and adult services, transport, property rationalisation, waste management, culture services, and capital programmes; a programme of staff redundancy; and the introduction of a strategic coordinating group to centralise decision-making in line with these spending priorities.

The county council claims £60m to £70m of savings will be required this financial year. But a report due to be discussed at next week’s meeting revealed that, if appropriate and radical action is not taken in the coming months and years, the deficit could realistically balloon to a staggering £180m by March 2021.

“The £60-70m range includes an estimated carried forward unfunded deficit in the region of £34m from 2017-18. Coupled with difficulties in the 2018-19 budget of a further £30m means that radical action needs to be taken in this current and future financial years to reduce spending,” the board paper said.

If the deficit does hit £70m this financial year, there will be no ability to replenish emptied cash reserves. Current analysis also does not include any reliance on capitalising transformational spend beyond this year, and identified only limited savings in 2019-20 and 2020-21.

Cllr Matthew Golby, Northamptonshire’s leader, who has been asked to resign by protesters outside an extraordinary council meeting yesterday, said there are going to be some “very difficult decisions ahead.”

“This action plan outlines the approach we are going to take, which includes rigorous controls on spending, recruitment and contracts. These decisions will be made based on the core spending priorities discussed by Full Council yesterday,” he explained.

“These are incredibly challenging times for the council but I am committed to ensuring we deliver those core services within the money we have available.”

Responding to the action plan, CIPFA boss Rob Whiteman said the steps proposed to save £70m will lead to impacts which will be “felt deeply across the local community” – and even then, “there is uncertainty whether this will be enough.”

He recommended that local authorities – many of which may be heading towards the same direction as Northants – should have the right level of checks and balances in place to identify issues early on.