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This second S114 notice from Northamptonshire is unprecedented. It demonstrates the reality of the dire financial difficulty the county council is currently in and drives home the urgency for action to support the sector’s financial challenges more widely.
Between now and the full council meeting, the authority is prohibited by law from entering into any new agreements involving spending. While this will help stabilise finances so that consideration is given to what is most needed, it is unlikely that sufficient action can be taken prior to abolition of the county council and the formation of two new unitary councils, to correct the cumulative effects of mismanagement over recent years.
These events show that the government was right to appoint commissioners, and that intervention is vital to ensure that the two new councils are not held back by the county council’s failure to remain solvent.
CIPFA has warned Northamptonshire for several years that urgent action was already overdue, but we are shocked to see the scale of Northamptonshire’s financial mismanagement as it has now has emerged.
It is a warning that while many councils have the requisite capabilities, not all councils have the necessary leadership skills, effective robust governance and culture to effectively manage budgets under pressure.
Service users and staff at the county have been let down by the collective failure of leadership that for several years led to denial of the scale of the problem and ultimately financial collapse.
The lessons for councils and the sector as a whole must be to act now to protect the public from the risk of financial mismanagement of this scale occurring elsewhere.
CIPFA is the professional body for people in public finance. It represents approximately 14,000 members who are public finance leaders and officials in the United Kingdom and overseas, specialising in high quality public financial management and governance for organisations in, and providing support to, government and public services. Its members work throughout the public sector, in national audit agencies, in major accountancy firms, and in other public and private sector bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications is the foundation for a career in public finance. It also champions high performance in public services, translating its experience and insight into clear advice and practical services. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance.
The Institute’s aim is to offer reassurance to councils who are financially stable as well noting where some authorities can improve their financial resilience.