The leader of Tory-led Northamptonshire County Council has launched an extraordinary appeal to the Secretary of State Sajid Javid for more cash for the county.
Councillor Heather Smith has warned that if the government does not increase the rate of money allocated back to the council for Northamptonshire people, that some frontline services will be cut completely, despite the £376 million already slashed from services since 2010.
She also called for councillors of all political parties to unite for Northants, saying they all had been left wondering: “why are we doing this?”
According to the council, Northamptonshire has one of the fastest growing populations in the country and demand for services is growing at an unprecedented rate, but the Government’s current funding formula does not take into account today’s demand levels and population data.
If Northamptonshire County Council were to receive the same funding per head of population as East Sussex County Council, for example, which has a significantly smaller population, it would receive an extra £115m to spend on local services every year.
“This equates to an additional £159 per person.
Council leader Smith’s letter is reproduced in full below. A letter has also been sent to all seven county MPs calling for their support in the campaign for a fairer funding deal for Northamptonshire.
Cllr Smith said: “It is becoming increasingly difficult to balance the increasing demand for local services against the reducing level of funding we receive from central government – which is significantly less than many comparable county councils.
“Since 2010, we have delivered savings and efficiencies totalling £376 million, which have involved some very difficult decisions affecting local services. By 2021, our total savings will have risen to £0.5 billion. Unfortunately, this still isn’t enough.
“We are working incredibly hard to manage the severe financial pressures but we need an urgent review of the Government’s funding formula for local councils to ensure we get a fair deal for residents and put us in a stronger position to protect frontline services as much as possible.”
The financial pressures are exacerbated by the fact some of the Government decisions affecting Northamptonshire are on hold, such as the future of social care funding, a review of business rate distribution and new bids for county unitary authority status.
At a meeting of the county council on September 12, Councillor Smith criticised her Conservative government colleagues for focussing too much on Brexit and called on councillors of all political parties to unite.
Councillor Smith said: “Since the last [finance] report a year ago…the circumstances nationally have fundamentally shifted, particularly following the election and Brexit vote. This means that where we feel as a sector we needed to be bold, we will be unable to do so as the government is focussed on Brexit.
“When we get to the year 2019-20 it really isn’t clear what’s going to happen with funding.”
“I think the demands on social care services, both children’s and adult means the funding gap falls particularly hard” she said.
“We are still not allowed to increase council tax by more than 2% without going to a referendum.
“I can honestly say that Northamptonshire is suffering from being chronically underfunded to run the services that all of us as members, stood for election for, regardless of whether we are Conservative Labour or Lib Dem. We all stood to run good services. I think most of us here as councillors all question, why are we doing this?”
Councillor Smith revealed that several council leaders were due to meet with government this week to discuss the issue of funding.
“It’s time that we did something quite strongly to try to ease our situation,” she said. She went on to confirm that plans to move towards a unitary authority, where functions of smaller district and borough councils are merged with the larger county authority, creating one council, are unlikely to happen as councils need to be in agreement.
Labour councillor John McGhee was scathing of the role of the county’s Tory MPs in fighting in parliament for their constituents.
He said; “We need all seven MPs to fight for fair funding and if they don’t want to play their part, they shouldn’t be in that position.
“How many of us regret that we didn’t put council tax up in the past? We will be in a situation where we can only provide statutory services because of austerity.”
Councillor Smith said: “There are things we know we have to stop. But we are very close to being not able to produce a balanced budget, which we have to do. Because of Brexit, no one is hearing us.
“We cannot carry on as we are.”
Cllr Smith’s letter to Secretary of State Sajid Javid
Here in Northamptonshire we have complete recognition for the need for austerity and indeed have played our role in driving out efficiencies across our services. Here in Northamptonshire we have complete recognition for the need for austerity and indeed have played our role in driving out efficiencies across our services. Since 2010, we have managed substantial funding reductions and delivered efficiencies totalling £376 million.
By 2021, our total savings will have risen to £0.5 billion. Unfortunately, this still isn’t enough.
As you will know from our previous meetings with you and your team, we are dealing with a severe financial challenge here in Northamptonshire as a result of unprecedented levels of demand for our services, low council tax (in a capping regime) and reducing levels of funding. It is a situation many counties are facing, but in Northamptonshire our pressures are unmatched due to us having one of the fastest growing populations in the country.
I am writing to you today to ask for your support for our new campaign for a fairer funding deal for Northamptonshire as we reach a new critical phase in our Medium Term Financial Planning. The pressures on social care means the resources we have are now almost entirely being directed to the vulnerable minority in the county. Consequently as a Conservative council without a fairer allocation of funding we will unfortunately be having to cut services that affect the majority of the public with a direct impact on those residents who are ‘Just About Managing’. I do not need to tell you it is these services which are voted on by the general public.
I can assure you we are working hard to address our challenges. We are transforming the way we deliver public services in the county through our Next Generation Council model, which sees services right-sourced to new standalone but council-owned enterprises to keep costs low and ensure value for money for taxpayers.
The brutal fact is that under the current funding system, Northamptonshire is chronically underfunded and will continue to be unfairly and inequitably impacted if we continue with the same mechanism.To illustrate, we receive £673 per person to spend on local services in this county. By comparison, most London gets more than £1,000 per person. If we received the same level of funding as East Sussex County Council, we would receive an extra £115m per annum. This is despite East Sussex having a far smaller population. This would equate to an extra £159 per person.
Over the last three years we have seen the number of looked after children in Northamptonshire rise from 850 to 1,050. We have one of the most pressurised health economies in England. The demand and pressures are real and we need action to address them.That is why we’re now asking for you to urgently review our current funding levels to take into account today’s demand levels and population data to ensure a more fair funding allocation for Northamptonshire.
With the current uncertainty and inequity in our funding, I will soon run out of time and resources to protect essential public services unless we see fairer funding. We are already looking at where further money can be saved but this will have a significant impact on frontline services unless we can secure a fairer funding deal.
This is a difficult position for the Conservative administration in Northamptonshire as we have maintained low taxation and efficient services for many years now. With a council tax cap in place, rebasing our income via local taxation would be costly and politically disastrous. But we have a duty to set a balanced budget and we will need to start considering less palatable options shortly. We are driving innovation in public services in line with the Government’s agenda, including closer collaboration between police and the fire service, academisation of schools and creating the biggest council-owned shared services company in the country.
As part of our carefully-considered medium term financial plan, we had stated our intention to pursue unitary authority status for Northamptonshire, which would have delivered savings of £20 million. We accept that bids for county unitary status are no longer a priority for the Government at this time. But this only serves to exacerbate our very serious financial challenge. Research from the County Councils Network shows clearly that county councils are underfunded. Until this balance is redressed, we will continue to argue for fairer funding.
As part of our campaign, I will be writing to not only our local MPs but also to key Parliamentary figures who we hope can help in our efforts to secure fairer funding for Northamptonshire. My officers recently met with your staff and outlined four tangible requests which we believe would be fairer for Northamptonshire and give us a better chance to protect those cherished services voters hold dear.
• Make IBCF part of the base budget
• Provide an extension of capital flexibilities
• Remove the threshold for a Council Tax referendum
• Provide financial assistance for the rising Looked After Children population
• Provide full cost recovery for Unaccompanied Asylum Seekers.
We would very much welcome your support for our campaign, consideration of our position both at DCLG and through any engagement with HM Treasury.
I look forward to hearing from you.
Councillor Heather Smith, MCIPD
Leader of the Council