Northamptonshire CC is one step closer to selling its £53m headquarters – four months after it was officially opened.
As the county council struggles to balance its books, cabinet yesterday agreed to the sale during a meeting that also discussed its budget for 2018-19 – a year in which it needs to find about £63m savings.
The council’s finance and resources scrutiny committee has raised particular concerns about proposed cuts to bus subsidies, library services, trading standards, and winter maintenance budgets. However, in a separate report, chief finance officer Mark McLaughlin warned reversing those decisions “may not be sustainable even in the short term” as Northamptonshire “faces a financial situation that is grave”.
LGC reported last week how Northamptonshire, which recently became the first council to issue a section 114 notice in almost two decades, is facing an in-year overspend of £21.1m this year which has been exacerbated by a failure to sell an asset in time.
Cabinet yesterday agreed to a sale and leaseback arrangement for its One Angel Square headquarters. It is hoped about £20m from that sale will help to set next year’s budget although Mr McLaughlin’s report warned: “The county council’s ability to set balanced budgets beyond 2018-19 will be dependent on further asset sales, but can only be in any way sustainable through 2019-20 and 2020-21 through cost reduction, demand control, rigorous financial control and iron discipline in decision making and delivery.”
Mr McLaughlin’s report also said that achieving a sustainable long-term funding solution in Northamptonshire “is more likely to be helped by reorganisation leading to the creation of one or more unitary authorities in the county”. LGC reported last week how consultancy firm Deloitte has been commissioned to look into reorganising Northamptonshire with at least two district leaders and one MP preferring a two-unitary model.
Following yesterday’s cabinet meeting a Northamptonshire CC spokesman said: “In recent years the government has allowed councils to use money from the sale of assets to help transform services and this has been presented by the government as the key way in which councils can rise to their financial challenges.
“The county council has taken advantage of this – however the extent of social care demands is such that all funding opportunities need to be pursued.
“Now that the county council’s new headquarters is open it provides a capital asset – receipts from which can be used to fund the transformation of services. Under a sale and leaseback arrangement the office complex – which is already saving £53,000 a week on reduced running costs alone - would be sold as freehold with the council leasing it back for a period of 25 years or more.
“The council will remain in One Angel Square so will still get the benefits from this modern, flexible working environment at the heart of the town centre.”