Northamptonshire County Council should have had financial reserves far beyond what it left itself when it had to balance its books.
That’s the verdict of director of finance Mark McLaughlin, who gave a sobering update on the authority’s financial position to its audit committee on Thursday (June 14).
It came after an announcement at a cabinet meeting the day before that the council was already £4m behind budget for the 2018/19 financial year, and hadn’t replenished its reserves yet.
The council raided its £12m of reserves to balance the books in the previous financial year but Mr McLaughlin, who only started in the post in December, told councillors the level of reserves had been insufficient.
He told the committee: “I think the right figure is about £50m to £100m, maybe even up to £200m, that’s what a county council should have in reserves otherwise it doesn’t have flexibility.
“£12m for a £1bn organisation with services such as adult social care is not enough, nowhere near enough. Nowhere else is anywhere near the position that Northamptonshire is in.
“£72m was the level of risk we had. We can’t spend money we haven’t got, and the big problem is this council has spent money it hasn’t had.”
The council’s cabinet has instructed officers to identify options for in-year savings of £8.4m at a minimum, and ideally savings of up to £20m.
Mr McLaughlin said: “We can’t be in a situation where we approach the toughest part of the year without any reserves to fall back on.
“There’s not much else to sell because we’ve sold it all. And unfortunately I’m not the Bank of England. I can’t magic money with quantitative easing.”