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Northamptonshire issues another spending ban as finances still critical

A potential budget shortfall in of up to £70m has led the director of Northamptonshire County Council’s finances to issue a second section 114 notice, banning spending until further notice.

In a letter to councillors, director Mark McLaughlin outlined the challenges facing the council including a potential budget shortfall in this current financial year of £60m-£70m.

In February the local authority became the first in 20 years to issue the major spending ban, and has had a chaotic experience since: in April it was forced to sell its brand new HQ for £64m to avoid “far more service cuts,” and in May government-appointed commissioners were sent into Northamptonshire to help balance the books.

Despite a new CEO being approved by the Full Council last week to lead the authority through this unprecedented time of change, council leader Matthew Golby said the financial challenge “remains critical” and the spending controls are vital to ensure funding is going to most essential services.

“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,” he added.

“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.”

An extraordinary Full Council meeting will take place on 1 August. A further meeting will take place later in the month specifically to discuss the section 114 notice.

The unprecedented decision to issue another section 114 notice was made in discussion with the government commissioners.

Finance commissioner Brian Roberts said: “We have been very clear that we did not arrive in Northamptonshire with additional money and that to put itself on a secure financial footing very difficult decisions will need to be taken. It is clear the time for these decisions is now.

“All that is required of the council is that it lives within its means, just like every other council. This is harder than it should be given the over-expenditure of recent years but not impossible.”

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Image credit: yevtony, iStock images


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