Northamptonshire council has gone bust. Who is to blame?

THE glossy new offices of Northamptonshire County Council suggest an organisation on the up. Opened last October at a cost of £53m ($75m), One Angel Square looks more like the base of a tech giant than a local bureaucracy. Purple and lime-green walls spice up the open-plan workstations and obligatory atrium.

In fact the council is distinctly down on its uppers. Last month it was declared, in effect, bankrupt. A stop was put on all new spending except on vulnerable people, the first time this had happened to a council for nearly 20 years. On March 15th an official report recommended that the council should be dissolved, such is the magnitude of its failure. This prompted the resignation of Heather Smith, its Conservative leader. One Angel Square is to be sold, as part of an economy drive that will also close 21 of the county’s 36 libraries.

After years of being taunted by the Tories for the spendthrift antics of loony-left councils, it is payback time for Labour. Jeremy Corbyn, the party’s leader, floored Theresa May at prime minister’s questions on March 21st by asking whether the collapse of Northamptonshire was the fault of “Conservative incompetence” at a local level, or at a national level. In truth the episode exposes elements of both, and some fear that it will not be the last such case.

The government-commissioned report is scathing about the financial shenanigans in Northamptonshire. Budget management was “an exercise of hope rather than expectation”; the council’s approach was “sloppy, lacking in rigour and without challenge”. The rot set in after a damning inspection of children’s services in 2013, where failures have so far cost £60m to put right. Most services were subsequently outsourced in an innovative “Next Generation” model, to save money, but this was poorly implemented.

Circling the wagons, the county’s seven Tory MPs have strongly backed the report, and its recommendation that two new unitary authorities should be set up to replace the county council. Others, though, argue that by blaming councillors for the disaster, the report lets the government off lightly. Jim Harker, the Tory leader of Northamptonshire until 2016, called it a “whitewash”. Simon Edwards, head of the County Councils Network (CCN), a lobby group, agrees that it “glosses over” the government’s role. The relentless cuts in central government support for local authorities, he argues, have contributed as much as anything to Northamptonshire’s demise.

Since 2010 all councils’ budgets have been savaged. Central government funding for local authorities has fallen by about half since 2010. County councils have suffered most. The CCN calculates that county councils will see a 93% reduction in their biggest government support grant from 2016 to 2020; by the end of the decade they will be receiving an average of £161 per person, whereas the figure for London boroughs, for example, will be £459. Matt Golby, acting leader of Northamptonshire, estimates that since 2010 it has lost £390m, cumulatively, from its budget.

Meanwhile, demand for services has risen. Northamptonshire’s population of over-65s grew by 12.5% in 2013-16, the fastest rate in the country, increasing the pressure on social care. The county has also added 16,000 school places since 2010. These are mostly funded centrally, but local government still has to pick up a tab.

Northamptonshire compounded its problems by freezing its council tax, already low, for three years. To make ends meet, it dipped into its reserves. The National Audit Office has warned that other councils are doing the same, a practice that is not “financially sustainable”. It estimates that a tenth of all councils with responsibility for social care could empty their reserves within three years if they carry on spending at the rate they did in 2016-17.

What happens next in Northamptonshire is up to the communities secretary, Sajid Javid. He could send in commissioners to turn the council round. In the longer term, however, Mr Golby argues that politicians must acknowledge the “massive impact” of austerity, and agree that the country needs a “fundamental review of government funding of local councils”.