UK: Northamptonshire County Council on verge of bankruptcy
10 February 2018
Northamptonshire County Council has banned all new spending and faces takeover by government commissioners after running out of money.
The council governs the non-metropolitan English county of Northamptonshire. It is the first UK local authority for two decades to resort to a section 114 notice, preventing all new expenditure. The move has dire consequences for the 733,100 people provided essential services by the council.
The council issued a statement saying the notice imposes “immediate spending controls on the organisation” and means “no new expenditure is permitted, with the exception of safeguarding vulnerable people and statutory services.”
The seven MPs elected by constituents in Northamptonshire—all Conservative—denied any central government involvement in the crisis, issuing a statement that the “county’s financial problems are self-inflicted.”
While the NCC claimed that the notice does not affect staff pay and that the council will continue to meet its statutory functions, the entire functioning of the council is threatened, with the danger that whatever staff and local services it retains will be terminated.
The Conservative-run council issued the section 114 notice on February 2, alongside a budget statement in which its chief finance officer, Mark McLaughlin, projected a £21.1 million overspend for 2017/18. This was, he said, in part caused by NCC’s failure to sell housing development land. The council only has enough reserves to meet half of the overspend.
The council is legally bound to set a budget this month. McLaughlin’s 2018/19 budget statement reads, “[M]embers of the county council should be in no doubt that the council faces a…