Northamptonshire County Council will come in under budget this year and has added £2m to its reserves.
The latest financial report up to month 11 of the 2019/20 financial year shows that the authority is currently predicting a £151,000 underspend on its annual £417.7m service budget.
The authority, which famously financially imploded in April 2018, had to save £41m this year and looks to have done as well as topping up its reserves pot to £22m.
How it has balanced its books is quite different from the original plan. The authority had set out to make £10m of savings in its expensive and failing children’s services department but has not been able to make three quarters of this savings with a £7.6m overspend.
Instead there has been a £2.8m underspend on the £159.4m adult social services budget along with a £4.1m underspend in the place department which includes highways.
And the balanced budget has come at a cost to services as a significant portion of the council’s services have been cut back. The council has spent £77,000 less on new books for its libraries, which comes after the authority drastically cut back its libraries spend and handed over tens of libraries over to community groups. There have also been underspends on marketing, emergency planning, country parks and customer services.
The two government appointed commissioners overseeing the authority had to get involved recently after the food standards agency threatened to take action against the authority’s much reduced trading standards department because it was failing to meet its statutory duties. The trading standards department had a £55,000 underspend.
Liberal Democrat leader Chris Stanbra said the £2m added to reserves was almost the same as it would have cost the authority to give its staff a pay rise this year.
The council’s employees saw a pay freeze, despite hints they may have been getting one. They will receive a four per cent pay rise this financial year.
Cllr Stanbra said: “If this pay rise had been given instead of putting the funds into reserve it would have given an uplift to staff as well as possibly helping with the recruitment issues the authority has been facing.”
The money put into reserves will act as a safety buffer if some services go over budget this current financial year.
The report says: “£1,266k has been set aside to top-up the budget delivery reserve. This reserve will be used to manage potential fluctuations on demand-led services. Additionally, an allowance has been made to create an earmarked reserve of £200k for potential litigation costs.”
The current 2020/21 financial year which started this week will be the last budget that the authority will deliver before it is abolished.
The financial mismanagement by the Conservative administration over several years led to the Government declaring the council no longer fit for purpose and ordered it be scrapped and a unitary system of local government introduced to Northamptonshire.
The new councils will begin next April, with elections to the new authorities in May 2021.