Director of Finance at county council imposes emergency spending controls

​The Director of Finance at Northamptonshire County Council issued a section 114 notice on Friday (2 February) imposing immediate spending controls on the organisation.

It is understood to be the first time a council has taken such a step in more than two decades.

Northamptonshire said the notice meant that no new expenditure was permitted, with the exception of statutory services for safeguarding vulnerable people.

It added: “The notice has been served in light of the severe financial challenge facing the authority and the significant risk that it will not be in a position to deliver a balanced budget by the end of the year.”

Councillors will have 21 days to discuss the implications of the section 114 notice and this is due to be addressed at a full council meeting on 22 February.

“The notice does not affect staff pay and the council will continue to meet its statutory functions,” the county council said.

Last month Northamptonshire unveiled plans to sell and lease back its One Angel Square headquarters to help fund social care and other service transformation.

Under the arrangement the office complex would be sold as freehold with the council leasing it back for a period of 25 years or more.

Also in January the Secretary of State for Housing, Communities and Local Government, Sajid Javid, appointed an inspector to examine concerns around financial management and corporate governance at the Tory-run 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, was appointed to carry out the inspection and is expected to report findings by 16 March 2018.