A district is set to make an unprecedented call for government intervention in its county council.
A report to Daventry DC has questioned both whether Northamptonshire CC can avoid insolvency and its ability to deliver promised savings.
It said a government takeover of the county to prevent financial failure would be preferable to intervention after such an event.
The report from Daventry’s business manager Simon Bowers for Thursday’s council strategy group meeting calls on communities secretary Sajid Javid “to consider if he needs to intervene in the management of NCC under Section 15 of the Local Government Act 1999 to ensure that delivery of services critical to residents is not disrupted”.
While it was an “unusual and indeed undesirable step” for one tier of local government to call for government intervention in another, the report said “it is suggested that the current circumstances are sufficiently unusual to justify it”.
Northamptonshire has been hit by poor relations between the county and its districts over a proposal for county unitary reorganisation, and by the county’s dire financial position.
Auditors in December issued an adverse report on Northamptonshire after warning the value of savings deemed at risk of not being realised during 2016-17 significantly exceeded the council’s available reserves.
In August Northamptonshire consulted on emergency mid-year cuts to social care in a bid to avoid exceeding its budget for 2016-17 after it was warned that £8.6m of £65m savings might not be achieved, with a further £26m in doubt.
The county in December published proposals to save a further £66.9m over the next 12 months.
Mr Bowers’ report said many of Northamptonshire’s proposed cuts “have potentially significant impacts on Daventry” and that the county appeared to be acting lawfully only because of temporary government permission to use capital receipts for service transformation.
“Overall the financial position can only be summarised as grave, with it being hard to escape the conclusion that NCC is at substantial risk of being unable to meet its financial obligations as they fall due i.e. technical insolvency,” the report said.
It said insolvency would “inevitably trigger central government intervention [but] having an intervention after a financial failure would be damaging for both residents of the area…it is therefore suggested that the secretary of state be asked to consider if he needs to intervene now, on the basis that the risk of NCC’s financial failure is too high and needs to be avoided”.
The report said similar responses were expected from other Northamptonshire districts, although none has so far debated the matter.
In response Northamptonshire CC’s leader Heather Smith (Con) said: “We have always and will continue to deliver a balanced budget and the suggestion that we do not have credible plans to deliver the required savings is misinformed and disingenuous at best.”
She said creating a county unitary was a step “which all financial modelling shows would deliver the best value for money for the taxpayer”.