Northamptonshire CC cabinet will not be able to vote on its budget tomorrow as its auditors have warned it is unlawful.
According to KPMG’s advisory notice, the budget would be likely to “cause a loss or deficiency” and would therefore be illegal under the Local Audit and Accountability Act 2014.
“It is our view that… the Authority’s estimate of the expenditure which it will incur in 2018/19… will be unlawful and will give rise to an unlawful decision as to the Authority’s council tax requirement,” KPMG said in its advisory notice.
The auditor said that Northamtonshire’s budget, which had been due to be discussed by full council tomorrow, is overly reliant on the sale of land so the delivery of its core services for the coming year is therefore not guaranteed.
Northamptonshire’s section 151 officer issued a report forbidding any additional new spending on 2 February, under a Section 114 notice.
A spokesman for Northamptonshire CC said: “The Section 114 notice issued earlier this month shows that as a council we recognise the very real risk we face in balancing the expenditure demanded of us in terms of our statutory duties and the resources available to us to pay for them. We have also been clear that we do not believe our funding position is sustainable.
“We have been clear that there are risks in our budget proposals for 2018/19 given this funding position and the on-going demand pressures we face. Given the severity of our financial position we are having to maximise the use of capital receipts as encouraged by the government to enable us to transform and protect statutory services.
“We have worked hard to ensure that the budget proposals being put forward for next year are accurate and realistic.
“We will now review and respond to KPMG’s advisory notice as required.”