Northamptonshire county council is looking to cut social care services back to a ‘core offer’ as it attempts to reduce a potential spending shortfall of £70 million.
Proposals announced by the council in a report yesterday (2 August) indicated that both children’s and adults’ services could be affected by “radical” savings being made at the authority, despite public commitments earlier in the week to protect the most vulnerable citizens in the area.
The report also revealed plans for a “staff redundancy programme” that is likely to affect most departments.
Spending on learning difficulties has been identified as one of the potential areas of cuts that could be made to adults’ services. Meanwhile, the number of referrals and numbers within the children’s care system will be scrutinised by the county council as it looks to strip services back to a “core offer”.
Plans to make “significant” spending reductions come after chief finance officer Mark McLaughlin issued the council’s second Section 114 notice in six months. In the notice, he warned there would be “serious operational implications” to the way the council was run, and it appears social care services have not escaped the cuts.
Ahead of a full council meeting next Thursday (9 August), council leader Cllr Matt Golby said compromises would have to be made.
“This action plan outlines the approach we are going to take, which includes rigorous controls on spending, recruitment and contracts. These decisions will be made based on the core spending priorities discussed by full council yesterday.”
“These are incredibly challenging times for the council, but I am committed to ensuring we deliver those core services within the money we have available.”
What is a 114 notice?
Found in the Local Government Finance Act 1988, this notice bans local authorities from making any new expenditures, with the exception of safeguarding vulnerable people and statutory services.
Spending that is nonessential or can be postponed should not take place. Money that is spent will be monitored. In the case of Northamptonshire county council, the notice will apply to the 2018/19 financial year.
Before its first 114 notice in February, the council brought adult social care services back in-house following concerns about the financial health of Olympus Care Services: the company it moved them into five years ago.
After auditors raised concerns about the council-owned company’s lack of reserves and ability to continue as a ‘going concern’ in 2018/19, 1,100 employees and services were transferred to the council.
Other recent attempts to balance the books include raising council tax by 5.98% – the highest increase possible without a referendum and which includes the 3% adult social care precept.
Despite taking action to reduce costs, the council has, thus far, failed to find a solution to the growing shortfall that could reach £180 million by March 2021, according to Thursday’s report.
‘Rainy day’ reserve reliance
In last week’s 114 notice, McLaughlin said the council’s approach to budget and financial management was “completely insupportable”, adding decisions about finances had been “factually wrong, ill-informed, out of step with other public-sector organisations”.
As well as criticising the council’s willingness to adopt unachievable savings as part of the budget, he highlighted concerns about the local authority’s use of reserve budgets.
Known as ‘rainy day’ funds, this money – saved by councils over time– has been traditionally used in the short term as a cushion to reduce the impact of unexpected events or emergencies.
In March this year, a National Audit Office (NAO) report warned that one in ten local authorities with social care responsibilities would have the equivalent of less than three years’ worth of reserves left if they continued to use them at the rate they did in 2016-17.