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Northamptonshire County Council suspends spending

Tuesday 6th February, 2018

Northamptonshire County Council’s Director of Finance has issued a section 114 notice imposing immediate spending controls on the organisation.

The move comes after the council recognise the severe financial challenge it’s facing and the significant risk that it will not be in a position to deliver a balanced budget by the end of the year.

Group Finance Director, Mark McLaughlin projected a £21.1m black hole for 2017/18 - partly as a result of a failure to sell housing development land.

Richard Murphy, Tax Research UK, commented in his blog, “I forecast that local authorities might face this situation not long ago, but remain surprised that the government has let it happen in a shire county with so little time to elapse before deeply sensitive council elections.”

Secretary of State for Local Government, Sajid Javid, announced last month that a government inspector would be assessing the council's financial state.

The Conservative-run authority said staff pay would not be affected.

Northampton's finances appear to have deteriorated too far for the council to be able to manage its own finances and it seems government intervention is likely.

The implications are due to be discussed at a full Council meeting on 22nd February.