Northamptonshire county council’s catastrophic financial collapse, and the desperate measures it now proposes to balance the books, reflect management incompetence on a grand scale as well as the punishing effects of eight years of austerity cuts.
Less than six months after it was declared technically insolvent, the Tory-run council now faces a sobering reckoning for a reckless half-decade in which it refused to raise council tax to pay for the soaring costs of social care, preferring to patch up budget holes with accounting ruses and inappropriate use of financial reserves.
Over the next few weeks the council will map out where previously unheard-of levels of cuts will fall. There are no concrete details yet, other than a promise that its future “core offer” to residents will be a bare legal minimum of service, focused only on the most vulnerable residents.
No services will go unscathed, even in priority areas like child protection that have up to now been relatively insulated. There are no easy cuts left to make: the council says hard savings must be dug out of the most essential services. What will remain is what one observer wryly called “a people-not-dying level of service”.
“We live in unprecedented times,” the council’s leader, Matt Golby, told an extraordinary meeting of the council on Wednesday night. At the same meeting the Labour councillor John McGhee was more direct: “This is a bloody mess. It is an absolute mess.”
The scale of the cuts needed are huge. The council must make up £70m savings from its £441m budget over the next few months, and a further £54m savings in 2019-20. It must try to do this while demand for services soars, notably from children’s services and social care services for elderly and disabled adults.
Some call for a government bailout, but while this seems unlikely, no one is quite sure what happens next. The council is due to be scrapped in two years’ time and replaced by two unitary authorities. The optimistic hope is this will deliver savings, but the fear is these will come too late to solve the present crisis.
Tough questions remain: who decides who gets to be “vulnerable enough” to be eligible for council help? What defines the minimum legal level of service? And if these decisions are challenged in court and declared unlawful, what options remain to a council with no money?
As Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, puts it: “What do councils do when they have cut everything, and then find that they no longer have resources to deliver statutory services?”
The government has tried to position Northamptonshire as a one-off outlier of council incompetence, but it is not the only one teetering on the edge. Up to 15 are at risk of insolvency according to the National Audit Office.
The local government expert Prof Tony Travers of the London School of Economics says that however unique the management failures in Northampton, the effects of eight years of cuts that have stripped £16bn from councils in England cannot be ignored. “If you go on like this, Northampton will not be the only one that gets into this situation.”
Once a low-tax Tory flagship council, touting itself as the future of local government, Northamptonshire is now bust. Its core offer warns residents, with unwitting pathos, that the most they can expect in future is “a reasonable level of customer service, within our means”.