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How Northamptonshire balanced the books

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Northamptonshire CC’s commissioners have today recommended the council lift the section 114 notice after the council forecast a balanced position for the year end, the first time in seven years this had happened.

Speaking to LGC this morning, finance commissioner Brian Roberts said the flexibility to use £70m of capital receipts for revenue purposes had been helpful as it had been used to pay off the deficit from 2017-18 of £41.5m. However, he said the forecast £30m in-year overspend was reduced through efficiencies.

“We didn’t want to reduce services to deal with the one off problem of the deficit,” he said.

“The reality is we have brought into play, working with the members and officers, a firm grip on the finances because that wasn’t in place in our view,” he said.

Mr Roberts, who was previously director of finance at Leicestershire CC, said “tighter contract management” and “better decisions” had been crucial to this. As an example he said the council had reduced the £3m of cost inflation built into contracts in 2018-19, increased social care income by £1.3m and achieved a £2.3m improvement in waste disposal costs.

“What we didn’t want to do and didn’t think it was right to do was to address the balance by slashing and burning the services or making huge numbers of redundancies,” he said. “It wouldn’t address the problem this organisation has got which is the quality of its services, particularly children’s services.”

Mr Roberts said while Northamptonshire had been making cuts to services before the section 114 notice was issued, they had not been realising the savings that were built into their budget. He said the new senior officers at the council had brought “drive and energy” that had been crucial to the council’s financial turnaround.

“We are seeing a change in the council’s culture so it’s much more ‘we must do this’ rather than looking for problems or issues why things can’t be done,” he said.

Asked whether Northamptonshire’s Next Generation council model, which saw most council services ‘spun off’ into council owned companies or social enterprises, was a factor in their financial difficulties, Mr Roberts said it was not necessarily the model but the way it was implemented.

“Where I think they failed here is they didn’t put the proper business cases around what they proposed to do or put the proper governance controls in place so whether it was a good idea or not it was likely to fail because they hadn’t got those processes in place.”

 

 

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