Only court battle would have settled Northamptonshire councils disagreement over multi-million pound handover

Northamptonshire County Council and the boroughs and districts had disagreed about whether an early council tax handover was legal.
Northamptonshire County Council and the boroughs and districts had disagreed about whether an early council tax handover was legal.

Hopes by Northamptonshire County Council to gain £7.8m from the boroughs and districts to help balance their budget have been abandoned as the authority would have had to go through the courts to get it.

The idea to have the council tax collected by the boroughs and districts paid earlier than normal had been a key part of the commissioners' stabilisation plan to help balance the budget this year.

But the boroughs and districts, who collect the council tax and give the lion’s share to the county council, have said no to the plan questioning the legality of the move.

The county council’s latest finance report says: “There are conflicting legal views as to whether the regulations would permit the surpluses to be paid earlier to the county council by the districts and boroughs.

“It is clear though that in order to clarify the interpretation of the regulations the council would have to make recourse to the courts. In order to avoid unnecessary costs to the county council, the county council will account for the council tax surpluses in 2019/20 and reduce the savings target for that year to a more manageable level.”

But the authority has now made up the shortfall in other areas and this week announced that its overspend for this financial year is sitting at £1.4m.

In the summer the financially-strapped council was looking at a £64m overspend for the year. Central government helped the council by allowing it a capital flexibility which meant it could spend money made from the sale of headquarters One Angel Square last year to pay off the £40m deficit from 2017/18.

The £7.8m that now won’t come from the districts and boroughs has been compensated for from a number of cost improvements across council services.

This includes putting fewer people into social care following a hospital stay, using block contracts beds at a greater volume which are cheaper, making savings in borrowing costs and not having to pay out almost £1m on redundancy payments as predicted.