Severe spending controls may have to be imposed for the next two years at Northamptonshire County Council, according to the authority’s finance director.
The county authority was the first in 20 years to issue a 114 notice in February when it looked like it was not going to be able to balance its books.
The controls are still in place and the authority’s finance director Mark McLaughlin has warned that necessary further action may have to be taken, including the issue of a further s114 Notice in respect of 2018-19 and 2019-20 which will include further restrictions on spending.
Under the current controls any spends for non-statutory services above £1,000 are being approved by a committee of the finance director, interim chief executive Andrew Quincey and monitoring officer Susan Zeiss.
The financial running of the authority is also being overseen by Brian Roberts, a commissioner appointed by the Secretary of State for Local Government James Brokenshire.
A finance report to go before the council’s cabinet next week (June 12) has laid bare the current financial situation and indicated that various savings planned for this year may not be achievable.
Just two months into the new financial year it looks the council may be running at a £4.34m budget variance already.
Mr McLaughlin, who has been in post since December, says in the report: “In normal circumstances this variance would not be a cause for alarm at this stage in the cycle.
“However, the county council’s financial position means that we are not in normal circumstances.
“Although the budget set for 2018-19 was more robust that previous budgets, the county council is still subject to the legacy from imprudent items that were included in these previous budgets, and the adverse variances are mostly a consequence of these base budget issues.”
The director also issued a warning that ‘finance can no longer be expected to fill gaps with one-off interventions or financial legerdemain.’
According to the Oxford dictionary legerdemain means deception or trickery.
In recent months the council has come under a barrage of criticism and been labelled by one Northamptonshire MP as the ‘worst-run council in the country’.
Many of its senior officers have left and the authority is currently looking for a new chief executive to take over the day-to-day running.
In the previous financial year it overspent across a number of service areas such as adult social care, which is facing huge pressures.
The council reported last month (May) that it had managed to balance its books for the 2017-18 financial year but this is now being challenged by its auditors KPMG who say that the authority may have had a £58.6m overspend instead.
It will be known in the coming weeks whether this is the case.
Mr McLaughlin will warn councillors at Tuesday’s meeting that some of the planned £35m of savings required in the 2018-19 budget are very unlikely.
In total £1.075m of savings are red rated, meaning they are unlikely to be achieved and £18.199m of savings are amber rated, indicating that there are risks that they cannot be delivered.