UNISON members in Northamptonshire will be keeping a sharp eye on the county council when it meets today in its second attempt to pass a budget for 2018-19.
The council’s scheduled meeting last Thursday (22 February) wasn’t able to discuss the budget after auditors KPMG issue a legal warning letter that it “may not lawfully continue” with its “decision-making process for setting a budget for 2018-19, and its precept for 2018/19”.
Because the budget plans did not balance, relying on selling land and buildings, the auditors warned that this would breach the Local Audit and Accountability Act 2014 and the 1992 Local Government Finance Act.
Proposals from the council’s cabinet, which will be discussed today, are for an extra £9.9m of cuts on top of the £29.3m of “savings” for 2018-19 which had already been proposed.
These include:
- closing 21 of 36 libraries;
- cutting trading standards services by 42%;
- cutting skills and jobs funding for vulnerable teenagers by £500,000;
- cutting grants to local charities by £600,000;
- not paying a proposed 2% pay rise for staff.
Earlier in February, the council issued a so-called Section 114 notice to staff, banning most new spending.
The notice, thought to be the first one issued in 20 years, will remain in force until the end of the financial year on 31 March.
Next year’s budget must be set by 11 March, while council tax must be set by 1 March, which is why there will be an extraordinary meeting to discuss new proposals on 28 February.
Staff were told they had to to take one day’s mandatory unpaid leave in November as part of a plan to save £2m a month.
But their UNISON branch says the council was guilty of financial mismanagement well before this crisis.
As the council was preparing to meet on Thursday, UNISON East Midlands pointed to a “lucrative contract” for a former senior executive, signed just days after she was made redundant.
Christine Reed enjoyed the title of “director of people, transformation and transactions for shared services” until she was made redundant in September 2016 and received a payment of £50,000.
Shortly afterwards, the council awarded a contract for IT services to Gradon Consulting. Ms Reed is the sole director of, and one of only two shareholders in, the company. It received £185,000 from the council between September 2016 and October 2017, according to receipts seen by the BBC.
UNISON said the transaction showed the extent of financial mismanagement at the county council, while branch secretary Penny Smith said it was “morally reprehensible” for Ms Reed to be paid off and re-engaged as a consultant while staff were forced to lose a day’s pay through unpaid leave.
“The fact that Northamptonshire council has had to issue a section 114 notice will hopefully at least make more people aware of the battering that local councils have endured thanks to the reckless actions of Westminster governments since 2010.”
UNISON national officer Matthew Egan
In January, the government appointed an inquiry to look into financial management and the governance at the council.
The inquiry, by former Hackney and Barnet chief executive Max Caller is expected to report shortly.
UNISON national officer Matthew Egan warns that whatever happens with the report and council budget, Northamptonshire is just the first outward sign of a growing crisis in local government finance.
There are a number of factors involved in Northants, he says: central government cuts, historically low council tax rates and a vigorous outsourcing policy.
Those combined, with increasing demand for services – particularly in both adult and children’s social care – to create a perfect storm.
Director of social care Anna Earnshawe warned the cabinet budget meeting that severe underfunding means adult social services are on the “edge of being unsafe”, with 2,000 cases unassigned.
The biggest factor in the crisis, says Mr Egan, is the cuts in central government funding.
London, Edinburgh and Cardiff have finalised their local government finance settlements, but UNISON warned last week that, even with a “tiny increase” in funding, the figures “are nowhere near enough to meet the pressures that local government is collectively facing”.
In England, for instance, the government gave an extra £150m for councils, via the adult social care grant. But that service faces a £2.3bn funding gap by 2020.
Central government is increasingly working to make local government rely on council tax and business rates, with a substantially reduced level of central grants.
Both UNISON and the Local Government Association are urging the government to release billions of pounds it has accumulated from its share of business rates.
The crisis in local government finances has been building for some time, says Mr Egan. “And because many council services are hidden from view, or might only be used by a relatively small number of people in the local community, many people are unaware of the devastating impact that cuts to council budgets have had.
“The fact that Northamptonshire council has had to issue a section 114 notice will hopefully at least make more people aware of the battering that local councils have endured thanks to the reckless actions of Westminster governments since 2010.”
Now the crisis is coming to a head.
Whatever individual factors are at play in Northamptonshire, it might be the first but it won’t be the last to find itself in dire straits, warns Mr Egan, unless the government changes its approach to local government.
UNISON policy: Local government finance (motion passed at 2015 service group conference)
The article The continuing crisis in Northamptonshire first appeared on the UNISON National site.
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