Yesterday, a week before the County Council sets its budget for next year and the financial plan for the next five years, it was announced that the massive overspend in this year’s budget had been unexpectedly cleared, and on top of that there were now tens of millions of pounds extra available for the future!
Great news obviously, but how has this been achieved? I’m sure we will be told that it’s by prudent financial management but actually the complete opposite is true.
Since a little after taking office the Conservatives have had a technical problem about how they show something called the Minimum Reserve Provision in the accounts (it's to do with the financing of capital), and for over 7 or 8 years this has been highlighted as a serious problem and been mentioned time and time again by auditors, but its only recently that the council have taken on a new manager and tasked him with dealing with this problem once and for all and to find an accounting method that was acceptable to the auditors, which he has now done.
This solution has meant that millions of pounds has now miraculously been found, by far enough to clear this year’s mess and because it’s retrospective over a number of years will also allow the council access to millions more ready for next year’s budget.
This has allowed them to spend another £4m in Adult Social Care for example and put much more into reserves ready for the inevitable financial pressure the next few years will bring.
But let’s not kid ourselves; it was the Conservative administration’s inability to deal with this problem for such a long time that has led to this unexpected windfall. This new money in actual fact should have been available to the people of Northamptonshire years ago. It could have been spent on filling pot holes and in the Children’s Services department etc.
When I suggested at cabinet that they had simply got lucky in being able to fill their gap in finances I was accused of insulting officers, but actually no, that’s not what I was doing at all. I was pointing out that while I don’t expect the councillor in charge of finance to be an accountant and to be able to deal with this issue himself, I do expect him to be a manager and to have recognised the problem and manage the situation by putting in place the necessary expertise to have dealt with it far earlier.
It’s another example of financial mismanagement and my fear is that because they have got lucky, this with be trumpeted as the opposite and they’ll try to take credit for a lucky break they couldn’t possibly have foreseen.
And the fact they seemed to have deliberately kept this quite until just one day before the opposition parties are supposed to put in their alternative budget proposals (when obviously this has a huge impact) is another matter.
However, it should also be said that this windfall will still make very little to the cuts they plan nor change their mind about out-sourcing all their services away from the direct control of the council.