Budget balanced for second year in a row at Northamptonshire County Council

The authority has reported an underspend of £641,000 for the 2019/20 financial year, adding to last year’s underspend of £4.5 million.

The 2019-2020 position is based on a provisional outturn forecast and is still subject to change. The final figure will be confirmed in a report to cabinet in July.

But the good news was soured with the county council also revealing through its cabinet papers yesterday (May 1) that the effects of the coronavirus pandemic is likely to leave a financial black hole of between £14 million and £27 million for 2020/21. That is even after a £30 million handout from the Government.

But prior to the pandemic outbreak, the finances appeared to have turned around from the apparent oblivion that the county council faced in 2017/18. This is the second year in a row that the budget has been balanced without the use of reserves, something which the council says had not been achieved in the previous 10 years.

It also means that the authority now has £43.8 million in general and earmarked reserves. £23.8 million of that is earmarked, while the remaining £20 million may have to potentially cover any losses due to coronavirus.

Councillor Matt Golby, the Conservative leader of Northamptonshire County Council, said: “At one point in the recent past, our financial challenge stood at £64.2 million and we had a long road ahead of us.

“Since then, we have all worked extremely hard and made some real progress in our efforts to close the gap. The fact that we are able to report another end-of-year underspend – in addition to that delivered in 2018/19 – is a considerable accomplishment.

“This remarkable achievement goes to show the hard work and commitment of everyone involved in getting our finances back on track. Of course, our efforts will continue so that we can ensure we are in a strong position for the transition to the two unitary organisations.”

The news was also welcomed by the council’s Government appointed finance commissioner Brian Roberts, though he also sounded a note of caution about the current situation.

He said: “The fact that the county council has achieved an underspend for a second successive year is a significant achievement which reflects very well upon the leadership, members and staff of the authority.

“Of course the global pandemic will bring with it severe financial challenges upon the whole of the economy.

“The marked improvements at NCC not only mean it has been in better shape to face up to the challenge of managing the impact of COVID-19 on the county’s communities, but has a sound financial footing upon which to face up to the very significant impacts which will follow and which should in no way be underestimated.”

The current financial year (2020/21) is scheduled to be the last in the county’s history, as it will be abolished next April to make way for two new unitary councils – one for the North of the county and one for the West. The existing district and borough councils will also be abolished and merged into the new unitaries.