Councils’ funding pressures is not a go-to topic for the media, but the news in Northamptonshire has shone a spotlight on the issue.
While many have drawn their own conclusions on the administration at Northamptonshire, once the hysteria has died down it seems logical to await the government’s independent review of the county.
Whatever the outcome there are clearly wider issues at play here that are beyond the council’s control. These were alluded to by LGA chairman Lord Porter, who said earlier this week that in Northants ‘years of underfunding won’t be fixed by savings alone’.
From the period 2015 to 2020, the county will see a drop in core government grants of 39%, this is almost double the average drop for councils in London (22%) and significantly higher than metropolitan councils (28%).
Having to generate these kind of savings would be incredibly difficult at the best of times, but councils are overseeing huge efficiency drives in a period where demand for public services is rising exponentially, whilst those services have less scope for savings as they contain fewer ‘back-office’ functions
The county has seen substantial housing growth of close to 18,000 new homes since 2011, a faster rate than many other places. This has been coupled with the largest increase in elderly population since 2013 out of all of the shires.
The Government’s funding methodology fails to properly recognise population growth as a ‘key cost’ driver. This is compounded by the inequitable tier-split for New Homes Bonus. The council has seen nowhere near the uplift in funding to match this added demand on public services, while Northants’ districts have undoubtedly reaped significant financial rewards; with over £100m now in unringfenced reserves – 134% of their annual budgets.
It is in this context the council embarked on an ambitious transformation programme, and we await the government’s review to fully scrutinise this decision. There is no doubt it will provide some lessons on the risk of transferring large-scale strategic services to trusts, in particular those who wish to take complex services such as children’s and adult social care outside of direct council control, as a quick fix to growing demand pressures.
This episode has also re-ignited the reorganisation debate in Northamptonshire. This could provide the county the platform to deliver the savings required under an entirely new council.
But we must be careful of ending up with a political fix unable to meet massive local and national challenges. Evidence points to the financial and public service benefits of a single-county unitary, delivering 68% more efficiency savings than two county unitaries, while also providing a better platform for growth.
Seeing Northamptonshire’s plight in black and white was no doubt on minister’s minds when they made available extra resource to all of local government this week, following strong advocacy from CCN.
With a £2.54bn funding gap facing counties by 2021, this is not going to be the last we hear on financial challenges in the shires, but doom-mongering over who is next and the wider financial sustainability of counties is premature.
Our member councils are doing an extraordinary job in the face of a toxic cocktail of challenges and will continue to work with government on funding reform whilst delivering for their communities.
Simon Edwards, Director of the County Councils Network