Northamptonshire County Council has given the clearest indication yet that it did not balance its books last year.
Speaking at this afternoon’s cabinet meeting the cabinet member in charge of finance Cllr Michael Clarke made an admission that it looks very likely that the authority will be in a negative financial position for 2017-18.
This is a reversal of the public announcement the authority made in May declaring it had managed to make its incomings and outgoings balance.
The situation at the council is becoming more serious by the week and there are question marks over whether it can balance its books in April 2019.
Voluntary redundancy is being offered to more than 3,000 staff in an attempt to make the £35m of savings that the authority must make this year.
Speaking to his fellow councillors Cllr Clarke, who was appointed at the end of March in the midst of the financial crisis, said the situation was extremely serious.
He said: “We can’t overlook the fact that we clearly are hankered by the mess of the public health grant from last year.
“This will take us with all probability into a negative balance for last year.”
It is not known what will happen if NCC did not balance its books as no local government organisation in the country has ever been in that position before.
The authority misspent £8m of public health grant last year and the public health authority has demanded that this be re-spent on the correct services this year. This £8m would then be taken off last year’s accounts and mean the books did not balance.
Auditors KPMG will make their decision as to whether the authority balanced its books later this month. The auditor has previously called into question whether some capital receipts could be used. The two Government-appointed commissioners who are overseeing the authority have also commissioned a finance report from the Chartered Institute of Public Finance and Accountancy. This report is due in the coming weeks.
Plans to make £35m of savings detailed earlier this year are also not likely to be realised and a new plan for where the cuts can be made will be discussed by councillors at full council on July 19.
Cllr Clarke spoke of a ‘war room atmosphere’ at the county authority with charts detailing needed savings plastered all over the director of services’ walls.
He said that savings would be difficult to make but ‘in atoning for the sins of the past we have to stick with this course of action’.
Speaking after the meeting Cllr Clarke said on average the authority would make £100,000 of savings for every three redundancies.
Staff have until next Monday (July 16) to say whether they want to opt for voluntary redundancy. A report will then come before the council in August with the full scale of redundancies and the savings they could make the authority.
Local Democracy Reporter