Northamptonshire County Council

Andrew Gwynne Excerpts

Tuesday 27th March 2018 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

I thank the Secretary of State for advance sight of his oral statement and for bringing to the House a much-awaited response to the sorry crisis in one of his own party’s councils.

The best value inspection of Northamptonshire County Council of 15 March makes very sorry reading and is an indictment of not only mismanagement locally, but eight years of intransigence and austerity nationally. The Secretary of State will know that Northamptonshire’s problems have been building over a number of years, yet the council bragged about its “pioneering” approach to council services, running them as a business and operating “almost like a PLC”, according to the former chief executive. It did not take long before it became clear that just like the public sector, the private sector cannot deliver adequate services when there is still too little funding.

In 2015, the Local Government Association warned that forcing councils to spend reserves to plug funding gaps—something the Secretary of State’s predecessor, Sir Eric Pickles, used to demand of all councils—would be a “reckless gamble” and

“would put local communities on the fast-track to financial failure.”

As we have heard, back in September last year, the LGA conducted a financial peer review, warning that Northamptonshire would be the first to collapse. I am not sure whether the Secretary of State had read that report because he was soon cutting the ribbon at the new £53 million headquarters, as the authority was preparing the paperwork to declare itself bankrupt.

Worse, the Local Government Chronicle has suggested that there are already at least 10 authorities preparing to issue section 114 notices, and now the National Audit Office has warned that one in 10 councils with social care obligations will have exhausted their reserves within the next three years. So can the Secretary of State tell the House: what contingency arrangements have been put in place should other authorities follow Northamptonshire over the cliff edge?

I hope that the Government will learn from the failure in Northamptonshire. Even now, we are still learning more; we found out just this week that the ex-chief executive was paid more than £1,000 a day, while people were losing their jobs and services. That is why it is so crucial for commissioners to be sent in. The problems at Northamptonshire are so deep-seated that the residents of the county should not expect more of the same mismanagement from the Tory councillors who have driven it into the ground.

The Secretary of State says that he is minded to appoint commissioners. The Labour party has been calling for that for some time. Can he give a timescale—when will he make a formal decision? Should he decide to appoint commissioners, how soon does he expect them to be in place following that decision? Does he expect that their remit will be as extensive as that recommended in the report? If he does, he will have our full support.

On the budget, it is clear that Northamptonshire’s problems continue. Creative accounting may have got the county through the year end and through the budget setting for 2018-19, but Northamptonshire’s finances remain in a precarious state, and the principal pressures in children’s and adults’ services remain serious issues for the authority. What certainty does the Secretary of State have that Northamptonshire will be able to meet those cost pressures in the new financial year without additional central Government resource? What level of direct budget monitoring will be taking place by his officials in the Ministry throughout the year and will he be recommending that Northamptonshire undertakes additional in-year budget-setting exercises should it need to?

We give a cautious welcome to the reorganisation of local government in Northamptonshire, but changing lines on a map does not, in itself, resolve the deep- seated problems facing local government. In asking Northamptonshire’s councils to make suggestions to him, does the Secretary of State agree that any proposals for new councils must have the widest possible degree of consent from the communities they seek to represent? What resources will be made available to the new authorities to start them off on a sustainable footing? Does he envisage a Northamptonshire residuary body that will be established to take on the historic problems associated with the county’s finances, so that the new councils can start with a clean slate? And what assessment has he made of the financial capability of unitaries to run the functions of local government in Northamptonshire?

Northamptonshire is the first but it will not be the last. Given the assessments by the NAO and the Local Government Chronicle that other councils will follow Northamptonshire in the coming years, what assessment is the Secretary of State making and what resource is he going to make available to ensure that that does not happen? This is what happens when a Government have created a £5.8 billion gap in local government funding. Everyone is saying that social care is on its knees and when children’s services need an additional £2 billion. Local government cannot be allowed to collapse on this Government’s watch.

[Sajid Javid]

I thank the hon. Gentleman for his comments, but I must say that I do not think he listened to a word of my statement. Once again, he appears to have come to the Dispatch Box with a pre-prepared statement. It is clear that he is very disappointed indeed by the report because it is not what he wanted. He wanted a report that he could use for party political purposes, so that he could play his favourite game, political football—a game that has no respect for the people of Northamptonshire.

The hon. Gentleman wanted to claim that what has happened in Northamptonshire was due to a lack of funding. He did not listen to what I said in my statement and he clearly has not read the report. He comes to the Dispatch Box having not even read the report—and he calls himself the shadow Secretary of State for Housing, Communities and Local Government. Had he read the report, he would have seen that the independent inspector is crystal clear that it is not an issue of lack of funds; it is to do with poor governance and poor financial management.

The hon. Gentleman must have been very disappointed that the report did not allow him to make his party political arguments. I noticed that he conveniently ignored the history of local government interventions, so let me remind him: in 2001, Hackney, Labour-controlled; in 2003, Hull, Labour-controlled; in 2008, Stoke-on-Trent, Labour-controlled; in 2009, Doncaster, Labour-controlled; in 2014, Tower Hamlets, Labour-controlled; and in 2015, Rotherham, Labour-controlled. Perhaps he can detect the pattern, but if he cannot, let me help: all those councils were Labour-controlled. He has conveniently ignored that.

The hon. Gentleman did manage to get round to a few questions, so let me try to answer them. He asked about the timescale for the decision that I am considering on sending in the commissioners. It is a “minded to” decision at this point. I will take representations, as I rightly should, up to 12 April, after which I will make a final decision. If the decision is to send in commissioners, they will be in place by the end of April.

The hon. Gentleman asked whether there will be more funding for the council. As I have said, the inspector has said that lack of funding is not the issue. Simply to give the council more funding would be to reward mismanagement and would clearly be wrong.

The hon. Gentleman asked about reorganisation. It is of course necessary to consider reorganisation, because that is one of the inspector’s central recommendations. I do not want to predetermine the outcome. The inspector has recommended two new unitaries. We are open-minded about the proposals and I will consider them carefully, to a timeframe that allows us to look at them properly and to make sure that any options are consulted on properly.

Finally, I suggest kindly to the hon. Gentleman that, if he wants to come to the Dispatch Box and be taken seriously, can he listen to my statements in future, instead of appearing and talking about fiction?