Crunch talks today between Northamptonshire councils over legal wrangle

All eight finance chiefs from Northamptonshire’s councils are getting together for a pow wow about whether or not they can transfer the millions the county council is asking for from them to help get itself out of its financial hole.

The £6m from the collection funds of the borough and district councils is a key part of the £19.9m council’s stabilisation plan but there has been a sticking point about whether the councils can legally give the funds to the county authority. The boroughs and districts have the responsibility of collecting the council tax but the lion’s share goes to the county council.

The early transfer scheme is the idea of the two government appointed commissioners and is an unprecedented move nationally.

At yesterday’s overview and scrutiny committee held at One Angel Square, chairman Cllr Mick Scrimshaw questioned whether the figures regarding the council tax included in the stabilisation plan had been costed accurately.

He said: “Are we to assume there is not a specific breakdown and £6m and £2m were just ambitions rather than concrete proposals?”

The council’s new chief finance officer Ian Duncan said: “When those were pulled together I was not here. There would have been an expectation from each proposal.

“My understanding is that the districts and boroughs have given an undertaking that where they are in a position to help and legal and appropriate from an accounting point of view than they will do it.

“At this point in time we can say we have had a very positive dialogue about that. My colleague 151 officers have taken advice of what is possible. The next stage is to discuss it with auditors. This is something completely new that has not been looked at anywhere else and it is right it takes our time to explore.”

With just five months to go the council has still to make the bulk of its necessary £65m savings this year. Many of the suggested savings have also already been ruled out.

At the meeting the leader councillor for finance, Cllr Malcolm Longley, refused to say he was confident that the authority would balance its books this year. It failed to do so in the past financial year and still has a deficit of £35m that it needs to sort out.

Cllr Longley, who has only had the finance reins for a few months, said: “We are going in a direction and we are very cautious. We have had history here which you plainly know.

“We have no intention of repeating the last situation where we put something in and the auditors say it is a no-no. There are still five months to year end and there is a lot of road to go down yet.”

Asked about whether the commissioners’ request from central government to allow the council to use capital receipts to settle last year’s £35m overspend Cllr Longley said: “We are doing our level best to demonstrate to the Treasury that we are no longer the basket case they thought us to be.

“If we can demonstrate a competent operation by the year end then our stock goes higher and we get support.”

So far central government has not put any additional money into the county council.