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County makes £1m provision for shared service problems

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Cambridgeshire CC has put a £1m provision in its proposed budget for 2019-20 because of uncertainty over the future of Northamptonshire CC, with which it co-owns shared services provider LGSS.

Northamptonshire is due to undergo reorganisation into two unitary councils next year following the county council’s financial collapse in 2018.

A report by chief executive Gillian Beasley and chief finance officer Chris Malyon for Cambridgeshire’s general purposes committee said: “The current LGSS business plan was built around increasing resilience, improving service quality and delivering future savings to the host authorities through continued growth.

“Despite the extensive success at delivering savings in the past, with the financial difficulties that have arisen in Northamptonshire and the imminent restructuring of local government in Northamptonshire [provides] both an opportunity and a threat for LGSS.”

Cambridgeshire, Northamptonshire and the third co-owner Milton Keynes Council have commissioned a review from the Chartered Institute of Public Finance & Accountancy, which is yet to be completed, but the report said: “Given all of the uncertainties regarding the future financial position of LGSS and the potential costs of a restructure, it would be prudent to make provision for a general contingency to cover any potential financial implications”.

It went on to say the £1m was in the budget “to respond to the financial risk if some services are withdrawn from LGSS or if the planned level of growth in the business model is not currently fully achievable, given pressures facing other partners”.

Cambridgeshire opposition group leader Lucy Nethsingha (Lib Dem) said: “I know there are concerns about what decisions the new councils will make in relation to continuing the shared service arrangements, and I imagine once the new councils are up and running they will want to look closely at what LGSS is offering and see whether that offer looks good.”

LGSS is one of few shared services operations to have won significant work outside its parent authorities, with clients that include Northampton BC, Norwich City Council and Horsham DC.

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