County Council Goes “Bust” – Excuses, But Is Pure Incompetence To Blame?

There is only one town in the UK that hosts a top-flight (four highest divisions) football team, a Premiership rugby outfit and a top-level county cricket squad. (There is one city that has the same claim to fame – bonus point if you know which that is).

The same town dates back to the Bronze Age, has been a very significant settlement for thousands of years, and hosted a University that was, incredibly, the second to be founded in the UK after Oxford - and before Cambridge. It remains the only university to be stripped of its status, in 1265, just four years after its beginnings, after it got on the wrong side of a rebellion against King Henry III.

It was also the site of the largest herb and spice factory fire in UK history in June 1989, when the British Pepper and Spice factory burnt to the ground in about two hours flat. Buy me a drink and I’ll tell you about it – I was one of the two executives running the place at the time.

It is one of the fastest-growing urban areas in the country, having doubled in population in the past 40 or so years. It has high employment, a significant London commuter cohort and major businesses locally, including Carlsberg and Barclaycard. There is a University and a thriving Further Education College.  In 2014, Experian named it as "the best place in the UK to start and run a business."

The County of which this town is the centre has some other smaller urban areas, and absolutely beautiful heart of England-type countryside and villages where you can buy amazing houses for prices that make us Surrey residents weep. (Have you worked it out yet)?  It is not particularly wealthy but is certainly not deprived, with average income higher than any county in northern England, the West Midlands, Notts, Derby, Norfolk, Suffolk …

Yes, Northampton and the county of Northamptonshire, Conservative-voting pretty much through and through, is not really the sort of place where you would expect the local County Council  to go bust – but that is what has happened.

Last week, Northamptonshire County Council said it had brought in a "section 114" notice, banning new expenditure.  Heather Smith, Conservative council leader, said it was the "perfect storm" of increases in demand for services and reductions in government funding. "We did warn that we would become unsustainable," she said.

So the council is blaming under-funding from central government, but as we say, this does not really stack up with the situation for the County relative to others in similar or perhaps even more challenging positions. Other observers suggest that it is more about the incompetence of the county, its councillors and perhaps executives too. Indeed, last month, after various concerns about financial propriety and management, the local government minister, Sajid Javid, announced an inquiry into Northampton.

As the BBC reported, he commissioned an independent inspection to better understand whether the authority is complying with its legal requirements over value for money. "My decision to appoint an inspector is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government," he said.

One aspect of the Northampton situation though that has not been so widely reported is the way the organisation used outsourcing – or “right sourcing” as they seemed to call it – in an attempt to manage their financial pressures. At a time when the focus is on government’s outsourcing to the private sector, with the failure of Carillion, it is important that the Northampton experience is considered too.

That’s because their answer was NOT to hand it all over to Capita or Carillion - rather, they created a series of publicly-owned spin-offs, social enterprises and the like to provide different aspects of service delivery – here is an article from someone involved in the process from happier days.

It seems clear that this approach just has not worked. Andrew Rowson, a data expert who has worked with many local authorities has looked in detail at the Northampton situation. “The spin off model doesn’t work because a) local authority staff are not trained in running commercial businesses, and b) the parent authorities can’t see what’s going on”, he says.

We will look at the Northampton approach in more detail in part 2 – and hear more from Rowson too, as the picture gets murkier and murkier ...

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Voices (2)

  1. Nancy Clinton:

    Peter adds – yes, Leicester has a claim to be (provincial) sports capital of England!

  2. Russ Armitage:

    The “city” must be Leicester

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