Northamptonshire County Council: Budget underspend predicted

A cash-strapped council is predicting a six-figure underspend on its 2018-19 budget, just months after banning new expenditure amid a financial crisis.

At one point last year, the overspend at Northamptonshire County Council (NCC) was forecast at more than £64m.

Latest figures predict an underspend of just over £100,000 - £1m less than the previous month's forecast.

However, the Conservative-controlled council's leader, Matt Golby, warned it had not yet "made a full recovery".

Speaking to the Local Democracy Reporting Service, he said NCC's financial position was still "fragile", adding "robust spending controls" would continue.

An emergency spending measure, known as a Section 114 notice, was put in place in Northamptonshire twice within the last 18 months.

In 2020 the county council is due to be scrapped, along with seven local district and borough councils, and replaced by two new unitary authorities.

BBC Look East reporter, Sam Read

Cuts are definitely part of the story here - from bus routes, to some services for young people - while some old contracts have also been renegotiated.

But this council also had a big helping hand from the government. It gave the council special permission to use money raised from selling buildings - including its headquarters - and then it spent that money, known as capital receipts, on everyday services… something that is never usually allowed.

The legal order warning about finances will now be lifted, but spending controls will stay in place voluntarily.

Government-appointed commissioners say the latest financial monitoring report, which will be released next week and covers the first 11 months of the year, shows a broadly balanced picture for the first time in seven years.

As well as £70m in capital receipts, the government also sanctioned a 4.99% rise in council tax, 2% more than the 2.99% usually permitted, in order to raise an extra £5.8m.

However, Labour opposition councillor Danielle Stone said: "The outcome for our children is worse, the outcome for staff is worse. Who is it benefiting?

"The incompetence of the Tory administration has been bailed out by the government."

A final update on the 2018-19 financial year will be discussed at the next cabinet meeting on 9 April.