Northamptonshire CC should be split into two new unitary councils by 2020 with commissioners sent in to run the local authority in the meantime, according to a report by the government inspector sent in to the financially stricken county.
In February Northamptonshire became the first council in almost two decades to issue a section 114 notice, which imposed immediate spending controls on the local authority.
Two weeks ago the county council passed its budget after having to find extra savings for 2018-19 following a warning from auditors about an over-reliance on propping up budgets using capital receipts.
Inspector Max Caller said in his report: “The inspection team believe that a new start is required for the residents of Northamptonshire which can deliver confidence and quality in the full range of local government services.
“This can best be achieved by the creation of two new unitary councils, one covering the area of Daventry, Northampton and South Northamptonshire and the other encompassing Corby, East Northamptonshire, Kettering and Wellingborough. These should be established following elections to be held in May 2020 and be in operation commencing at their first annual meeting.”
LGC reported in February how two unitary authorities, based on the above recommendation, was the most likely outcome of any restructuring proposal for Northamptonshire.
Mr Caller added: “In the meantime the secretary of state should give serious consideration to whether commissioners should take over the running of all services save planning currently provided by Northamptonshire County Council and on what basis.”
Mr Caller said Northamptonshire had “failed to comply” with its best value duty under the Local Government Act 1999 and blamed the adoption of the ‘next generation’ model as a root cause to the county council’s financial problems.
“There was not then and has never been any hard edged business plan or justification to support these proposals,” the report said.
The inspector said the government’s initiative of letting local authorities use capital receipts to fund transformation projects was “seized on as a way of supporting revenue spend” but added: “Until this budget cycle, there had been no report to full council, or anywhere else, which set out the specific transformation that was to be achieved, on a project by project basis, as required, nor has there been any report to full council which sets out the actual outcome compared to the prediction.
“This means the statutory guidance has not been complied with putting in doubt the use of capital receipts for this purpose.”
Even after issuing the section 114 notice “the council still appears to struggle to take the necessary decisions at both member and officer level to control and restrain expenditure to remain within budget constraints”, Mr Caller said and added only now is the appropriate advice and control mechanisms being introduced to ensure the council complies with the law.