Section 114 notice banning new expenditure is finally lifted at Northamptonshire County Council

Northamptonshire County Council is finally lifting the Section 114 notice which banned any new expenditure.

Thursday, 28th March 2019, 4:47 pm
Updated Thursday, 28th March 2019, 4:51 pm
Spending levels will be relaxed at Northamptonshire County Council after the lifting of the section 114 notice
Spending levels will be relaxed at Northamptonshire County Council after the lifting of the section 114 notice

The decision comes following a recommendation from the two government appointed inspectors who were brought in to oversee the council’s turbulent financial crisis.

It also comes as the council appears to be closing in on balancing its in-year budget for 2018/19.

The commissioners say that the latest financial monitoring report, which will be released next week and covers the first 11 months of the year, is broadly balanced - and that this is the first time in seven years that this has been the case.

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The ban on new expenditure that wasn’t statutory - known as a Section 114 notice - has been implemented twice within the last 18 months at the county council, the first being in February with the latest one being brought in in July 2017. Prior to that, it hadn’t been implemented by any local government in two decades.

But the council’s leadership say that this is a sign that the authority is finally heading in the right direction.

Brian Roberts, the finance commissioner for the council, said: “We are impressed that this has been achieved without the use of any funds other than those budgeted for at the beginning of the year.

“The county council is living within its own means and has demonstrated that it is capable of doing so without putting services at further risk. It is a significant achievement which reflects well upon the members and staff of the authority.

“Whilst the disciplines of the s114 process have assisted in this - and will be retained - there is no longer a need for the council to live under the shadow of this failure. The work to restore the operating capabilities of many of the council's services, which have been greatly diminished over the years, can continue as the council prepares to place these services into proposed new arrangements for two unitaries in the county area.”

Leader Councillor Matt Golby added: “Earlier this year I said that all indications were that we were turning a corner and we had successfully built stability back into the council’s finances.

“Today’s announcements by the commissioners further underlines this point. We are due to publish our latest monitoring report next Monday and all indications are that we are now balancing our budget. Given that at one point the deficit stood at £64million this is an incredible achievement.

“All of this has been achieved utilising our own financial resources. The commissioners, our chief executive, her leadership team, my cabinet colleagues and indeed every member of staff at the council have worked tirelessly to achieve what so many people thought unachievable.

“Of course this does not mean the lifting of strict financial controls, we will never again be complacent and we must continue with the energy and commitment we have shown to get us this far to further strengthen our finances and critically transform our services so they can move forward with confidence.”

Although the financial turnaround has used the council’s own resources, it has needed unprecedented government help along the way.

In November, the government allowed the county council to use £70million of its capital funds - which are normally reserved for building and infrastructure projects - to be spent in its revenue stream, which includes adult social care and education.

The use of that £70million allowed the council to wipe out its deficit of £35million from 2017/18, and replenish the reserves level that had been decimated.

Westminster has also given help for the coming year ahead, allowing the county council to raise council tax levels for 2019/20 to 4.99 per cent, two per cent more than is usually allowed without a referendum. The county council has argued though that council tax levels for Northamptonshire will still compare favourably to many other authorities.

The final update on the 2018/19 financial year will be discussed at the next cabinet meeting, on Tuesday April 9.