BREAKING NEWS: Secretary of State launches investigation into Northamptonshire County Council over finances

Sajid Javid
Sajid Javid

A government inspector has been appointed to look into concerns around financial management at Northamptonshire County Council, it has been revealed.

The Secretary of State for Housing, Communities and Local Government, Sajid Javid, made the announcement today.

The move came after concerns were raised by Conservative MPs in Northamptonshire following Northampton North MP Michael Ellis speaking out for the first time about the financial situation at County Hall.

Under powers granted to Mr Javid under the Local Government Act 1999, the Secretary of State can commission an independent inspection to better understand whether a council is complying with its ‘best value’ duty – a legal requirement to ensure good governance and effective management of resources.

The Secretary of State has now has appointed Max Caller CBE to complete a report. He will have a legal right to inspect and take away documents, and to access any council properties.

Secretary of State for Housing, Communities and Local Government, Sajid Javid, said: “My decision to appoint an inspector is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government.”

Leader of the council Cllr Heather Smith said: “We welcome the announcement that the government will be conducting a best value inspection in Northamptonshire.

“We have been very clear with senior government ministers and civil servants about the issues facing the county and the growing financial pressures we are facing. This announcement means they will be coming to the county to assess the situation for themselves and be able to see how we have continued to deliver public services in an ever challenging financial context.

“We have been fully open and transparent with the government about our situation and have been direct in our request for assistance. We have also been clear that our proposed funding settlement from them includes no recognition of the pressures we face with the escalating cost of, and demand for, adult social care and children’s services respectively. We look forward to the next stage of the conversation that this inspection will necessitate.”

The written statement from Mr Javid to the House was as follows:

"For some time there have been concerns about financial management and governance at Northamptonshire County Council, and in recent months a number of reports have been published, which have led me to question whether the authority is failing to comply with its best value duty. Particular reports include the external auditor’s (KPMG) “adverse” value for money opinion in relation to the 2015/16 and 2016/17 accounts, publically available budget documents, and the September 2017 Local Government Association peer review into the council’s financial planning and management.

"Having carefully considered the evidence available to me, I have today decided to exercise the powers granted to me by Parliament under the Local Government Act 1999 to appoint an inspector to carry out an inspection to better understand the authority’s compliance with its best value duty. The matters to be covered initially by the inspection will in particular relate to the authority’s corporate governance and financial management systems.

"I have asked the inspector to report findings to me by 16 March 2018, or such later date as the inspector agrees with me.

"This decision is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government.

"I hope Hon. Members will appreciate that we cannot be drawn into more detail while investigations are ongoing. Once the inspection is complete, I will carefully consider the inspection report. If it shows that the council is in breach of its best value duty I will then consider whether or not to exercise my powers of intervention under section 15 of the 1999 Act."