Sajid Javid, the Secretary of State for Housing, Communities and Local Government, has made a statement in the House of Commons on troubled Northamptonshire County Council. He said that the council had been failing for many years and that there were significant financial failings within the organisation.
Javid said, referring to the independent report written by Max Caller:
“Northamptonshire’s failures are not down to a lack of funding or because it is being treated unfairly or is uniquely disadvantaged compared to other councils.
In fact, his report says that:
“for a number of years, NCC has failed to manage its budget and has not taken effective steps to introduce and maintain budgetary control”. Furthermore, the complex structure of financial support meant oversight was difficult and accountability blurred.
This report says that Northamptonshire’s Next Generation approach – which envisaged outsourcing many of the council’s functions – had no:
“hard edged business plan or justification to support these proposals”.
This “…made it difficult to ensure a line of sight over costs and operational activity” and “made it impossible for the council, as a whole to have any clarity or understanding as to what was going on”.
Similarly, the inspector found that Northamptonshire County Council used capital receipts to support revenue spend without documentary evidence demonstrating compliance with the Statutory Guidance and Direction”.
“With all of this mind, it is clear that I must consider whether further action is necessary to secure compliance with the Best Value duty. In doing so, I want to reassure the residents of Northamptonshire that essential services will continue to be delivered.
The Inspector is clear that “the problems faced by NCC are now so deep and ingrained that it is not possible to promote a recovery plan that could bring the council back to stability and safety in a reasonable timescale.”
He recommends that “a way forward, with a clean sheet, leaving all the history behind, is required”. I am therefore minded to appoint Commissioners to oversee the Authority using my powers under section 15 of the Local Government Act 1999.
From day 1, I propose that they take direct control over the council’s financial management and overall governance”.