Northamptonshire commissioners 'surprised and disappointed' at auditors no public interest report decision

"For the first local authority in a generation to effectively declare itself insolvent not to be the subject of such a report is certainly surprising" say the commissioners

The commissioners have criticised KMPG's decision not to issue a public interest report into the financial collapse of Northamptonshire County Council.
The commissioners have criticised KMPG's decision not to issue a public interest report into the financial collapse of Northamptonshire County Council.

Northamptonshire’s commissioners have hit out at the auditors decision not to issue a public interest report into the financial implosion of the county council.

The authority made world headlines two years ago when it ran out of money after years of financial mismanagement.

Now in their latest report to Government the two commissioners sent in to turn round the council, Tony McArdle and Brian Roberts, have criticised the decision of big accountancy firm KPMG not to issue a public interest report into just what went wrong at the council.

Despite lots of political fallout and analysis of the failures there has not been a definitive official account of exactly all the reasons why the authority failed to balance its books. In the wake of its financial collapse the government decided the authority was no longer fit for purpose and ordered the local government set up in the county be reorganised into a unitary structure.

In their fifth report dated March 3 the commissioners tell secretary of state for local government Robert Jenrick:

“The 17/18 Audit has been closed and we await the audit certificate. After a lengthy period of deliberation, the Council’s previous auditors have decided not to issue a Public Interest Report into the events leading up to the financial collapse of the organisation. We are disappointed by this decision.

For the first local authority in a generation to effectively declare itself insolvent not to be the subject of such a report is certainly surprising given the subject matter of previous Public Interest Reports. As our continuing Lessons Learned exercise attests, we believe there is a lot to learn from Northamptonshire.”

The last public interest report in Northamptonshire was into Corby Council's overspend for its Corby Cube building.

Over the past few months KPMG, which is no longer the auditor for the council, has changed its mind a number of times about issuing a report. Director Andrew Cardoza has said publicly on a number of occasions that he is minded to issue a report but has then done a u turn.

Asked by the Local Demcracy Service on March 3rd for the reasons why a report was decided against, one of the firm’s PR advisers said the company was not able to comment on the record.

KPMG has been approached again today in light of the commissioner’s criticisms.

Since the commissioners arrived and alongside the appointment of a new chief executive the council has improved its financial outlook, however has cut services to do so, as well as freezing staff pay and raising council tax.

The authority did balance its books the last financial year and is on track to do so again this year.

However the commissioners say in their report that ‘although there has been a significant improvement in the Council’s general financial resilience since 2018, it remains considerably weaker than other county councils.’

The commissioners also shed light on some other issues within the authority. They say service operations have not been within their remit however they have had to intervene in the inadequate children’s services and also trading standards.

Their report reveals the Food Standards Agency (FSA) had threatened to get involved with the county’s cut back trading standards service because it was not meeting its statutory requirements.

The commissioners say: “We have engaged with the FSA and assured them of our interest in remedying this situation. The matter is under control pending the enhancement of the service utilising the funds referred to above.”

The commissioners end their report by thanking the council’s chief executive and the senior leadership team who are involved in running the council at the same time as planning for the two new unitaries that will be created in April 2021.