Northamptonshire County Council’s finances ‘serious’

A council that banned all new spending faces a serious financial situation for the rest of this year and next year, according to its chief finance officer.

Northamptonshire County Council has brought in a so-called section 114 notice preventing all new expenditure.

In the notice, Mark McLaughlin projected a £21.1m overspend for 2017/18, partly caused by the failure to sell housing development land.

He said the situation for the following year was “grave”.

The housing land sale at Buckton Fields, near Northampton, was scheduled to have generated a capital receipt of £12m, intended to have been used to invest in services.

The county council only has reserves to meet half of the overspend, a report says.

It said the authority entered 2017/18 with “minimal reserves, and a budget that was achievable only with ambitious savings proposals and via inherently risky asset sales”.

What is a section 114 notice?

But this holds inherent risks, Mr McLaughlin said, including finding a buyer in time to exchange contracts to generate revenue for 2017/18 receipts.

He said the issuing of the notice meant Northamptonshire “becomes the worst run in the country”.

It included a council tax increase of 5.98%, including a 3% adult social care precept, and cuts totalling £2,748,000 for bus subsidies, trading standards, winter maintenance and library services. It will be discussed by the council cabinet on 13 February.

In a report on the 2018/19 budget attached to the section 114 notice, Mr McLaughlin said “members of the county council should be in no doubt that the council faces a financial situation that is grave and which thus places strict limits on the choices available to the county council”.