Latest Public Sector News

04.04.18

Failing Northamptonshire to empty all reserves in order to balance books

Northamptonshire County Council will use its general and earmarked reserves in order to achieve a balanced budget this year, the struggling authority has revealed.

This announcement comes following the council’s decision to postpone the sale and lease back of its headquarters, One Angel Square, due to the likely reform of the county’s local government.

Without the use of its reserves to offset the overspend, primarily due to the “unprecedented demand pressures for adult social care services,” the council says that it would face an overspend of £16.7m at the end of the financial year.

But these reserves would need to be replenished in 2018-19, and so the council will need to identify further savings within the new financial year.

Currently, the council has £12m in its general reserves and £4.9m in its earmarked reserves – money which is set aside for capital projects.

Last month, Heather Smith announced her resignation as its leader after a Whitehall report called for the authority to be split up.

Acting council leader, Cllr Matthew Golby, called the council’s financial climate “exceptionally difficult.”

“Since 2010 we have worked hard to find savings of £376m and a further £105m will be needed between now and 2022,” he said. “The Section 114 notice spending controls relating to all but safeguarding and statutory services remain in place, but the pressures in adult social care in particular mean delivering a balanced budget is becoming extremely challenging.

“We have taken the decision to postpone the sale of One Angel Square as the Best Value Inspection report and the secretary of state’s ‘minded-to’ decision this week suggest the strong likelihood that there will be a reorganisation of local government in the county.

“Following ongoing discussions with our auditors, we are also keen to seek further clarity around the flexible use of capital receipts.”

Golby added that although the move would exhaust the council’s reserves, it is the only alternative available as it is “not an option” to fail to deliver a balanced budget.

The BBC has also revealed this week that auditor KPMG will review the pay-off of former chief executive of the troubled council, Paul Blantern, following his departure last year.

A Freedom of Information request from the BBC found that a £95,000 payment was made to Blantern in addition to his contracted salary and terms, and the auditor has warned that the terms and conditions of his departure did not provide value for money.

Top image: yevtony

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