Public Service Delivery: Northamptonshire

Philip Hollobone Excerpts

Tuesday 6th February 2018 Commons Chamber

[Mr Philip Hollobone (Kettering) (Con)]

(Urgent Question): To ask the Secretary of State for Housing, Communities and Local Government what are the implications for public service delivery in Northamptonshire of the issuance by Northamptonshire County Council of a section 114 notice.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I thank my hon. Friend for his question on a topic that he and his Northamptonshire parliamentary colleagues have consistently raised on behalf of their constituents.

As Members will be aware, on Friday 2 February, Northamptonshire County Council’s finance director issued a section 114 notice to stop new spending and put in place a process for the council to meet within a specified time to consider the financial situation. It is important to note that a section 114 notice does not automatically mean that existing services will stop. Northamptonshire’s finance director has confirmed that statutory services to safeguard vulnerable people will continue to be delivered and that council staff will continue to be paid.

Local authorities have a legal duty to balance their budget, and section 114 notices are part of the accountability framework that guards against irresponsible financial management. It is for the council to decide what steps it needs to take to balance its budget. I understand that the full council will meet on 22 February to consider the situation.

Local government is, of course, independent of central Government, but, that said, the Government have been aware of concerns about Northamptonshire County Council’s finances and governance for some time, which was why the Secretary of State appointed an inspector to undertake an independent best-value inspection on 9 January. That independent inspection is due to report on 16 March, and as the Secretary of State made clear in the written ministerial statement of 9 January, it would be inappropriate for the Government to comment while the inspection is under way, specifically to avoid prejudicing its outcome. The Government will address the wider issue of funding for local government in tomorrow’s debate on the local government finance settlement.

Issuing a section 114 notice is a serious step. I understand that this development will be causing some concern in my hon. Friend’s constituency and across the county. However, it is also a sign that the council is taking its responsibility seriously. The Secretary of State and I will take a keen interest in the steps that the council takes to resolve these matters and ensure that it continues to deliver for the communities that it serves.

[Mr Hollobone]

Thank you, Mr Speaker, for granting this urgent question. May I declare an interest as a member of Kettering Borough Council, and may I welcome other Northamptonshire MPs who are also in the Chamber to ask questions?

It gives me no pleasure to say that, with the issue of this section 114 notice, Northamptonshire County Council becomes the worst-run local authority in the country. There are undoubtedly huge pressures on the social care budget, which are exacerbated by Northamptonshire’s fast-growing elderly population. The Government’s fairer funding review is welcome, but will, I am afraid, come too late for Northamptonshire County Council. This whole situation has been exacerbated by poor leadership by the cabinet at the county council, in which all seven Northamptonshire MPs now have no confidence. We echo the concerns of September’s peer review by the Local Government Association, which concluded that financial information is not presented clearly and transparently and that there is not a sensible budget going forward.

What happens if the county council cannot set a legal budget at its meeting later this month? What will happen to services—statutory or otherwise—to do with adult social services, children’s services, schools and highways? The Government have sent in a best-value inspector, which is good, and he is due to report by 16 March. Can—or will—the Secretary of State request of him an urgent interim assessment with some preliminary findings, because I believe that the Government need to be informed?

What is the total debt of the county council? I understand that it owes more than £700 million. Does the section 114 notice have the implication that lending institutions might foreclose on their lending to the authority? Can the Minister assure me that Northamptonshire’s bad situation with delayed discharges from our two local hospitals will not be made worse by this section 114 notice? We have a 10% delayed discharge rate. On any one day, 100 people are waiting in the two hospitals. They have completed their treatment, but because Northamptonshire County Council is not getting them into care homes quickly enough, they are not leaving the hospitals. May I urge the inspector to look at the opaque accountancy in the local government shared services model at the county council, which is where a lot of the problems may lie?

Will the Government prevent the county council from selling its new, very recently opened Angel Square offices? While that could bring in £50 million, it could leave a 25-year rental liability for any successor authorities. Will the Minister make sure that the transfer of the fire service out of the county council to the police commissioner is not held up by the financial crisis at the county council? I do not want the fire service to go down with the local authority.

It is clear that Northamptonshire County Council is in a huge mess. We look to the Government inspector to report quickly, and, in the view of all seven Northamptonshire MPs, the sooner that Lords Commissioners are sent in to sort out this mess, the better.

[Rishi Sunak]

I thank my hon. Friend for his questions. I know that this is something that he is thinking about deeply on behalf of his constituents. Let me take in turn the points that he raised. With regard to the fire service, he will hopefully be aware that the Home Office is considering that application and will make its decision in due course. On his points about the financial situation, he is right to say that there are a range of issues that were highlighted in both the independent audit reports and the LGA peer review, which, as he rightly pointed out, cited both culture and governance issues at the council.

On the process from here, Ministers do not have direct contact with the inspector—he is rightly independent—so it is not possible to direct him to report earlier. I would point out that the 16 March deadline means that this inspection will conclude in much less time than was allowed for the Tower Hamlets and Rotherham inspections, which, hopefully, should give my hon. Friend some comfort regarding a rapid resolution.

Finally, if the council meeting is not successful, the finance director has the option of issuing a further section 114 notice. However, it is important to note that he, as the statutory official, has the flexibility today and in the future to authorise any payments that he sees fit and for which there is a sensible case, including, as he has guaranteed, to safeguard vulnerable people. At the point at which the council is ready to make formal representations to my Department for anything that it might require, we stand ready to engage with it.