Investigator sent in to county council amid concerns over finance and governance

The Secretary of State for Housing, Communities and Local Government, Sajid Javid, has appointed an inspector to examine concerns around financial management and corporate governance at Northamptonshire County Council.

Under section 10 of the Local Government Act 1999, the Secretary of State can commission an independent inspection to better understand whether a council is complying with its ‘best value’ duty – a legal requirement to ensure good governance and effective management of resources.

Max Caller CBE, a former chief executive at Hackney and Barnet Councils, has been appointed to carry out the inspection and is expected to report findings by 16 March 2018.

He will have a legal right to inspect and take away documents, and to access any council properties.

In a written ministerial statement, which can be viewed here, Javid said there had been concerns about Northamptonshire for some time. “In recent months a number of reports have been published, which have led me to question whether the authority is failing to comply with its best value duty. Particular reports include the external auditor’s (KPMG) “adverse” value for money opinion in relation to the 2015/16 and 2016/17 accounts, publically available budget documents, and the September 2017 Local Government Association peer review into the council’s financial planning and management.”

Javid added: “My decision to appoint an inspector is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government.”

The best value duty was introduced in England and Wales by the Local Government Act 1999. Its provisions came into force in April 2000.

Under section 3(1) of the 1999 Act, a best value authority must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

The Secretary of State told MPs he would carefully consider the inspection report. “If it shows that the council is in breach of its best value duty I will then consider whether or not to exercise my powers of intervention under section 15 of the 1999 Act," he added.

Cllr Heather Smith, Leader of the council, said: “We welcome the announcement that the government will be conducting a best value inspection in Northamptonshire.

“We have been very clear with senior government ministers and civil servants about the issues facing the county and the growing financial pressures we are facing. This announcement means they will be coming to the county to assess the situation for themselves and be able to see how we have continued to deliver public services in an ever challenging financial context.

“We have been fully open and transparent with the government about our situation and have been direct in our request for assistance. We have also been clear that our proposed funding settlement from them includes no recognition of the pressures we face with the escalating cost of, and demand for, adult social care and children’s services respectively. We look forward to the next stage of the conversation that this inspection will necessitate.”