£11m cost rise for scaled back Northamptonshire unitaries

The cost of creating two new councils for Northamptonshire has risen by £11m, despite the new authorities being a scaled back version of what was originally planned.

Figures released in the latest masterplan for the West and North unitaries now predict the cost of setting them up for next April will be £55.8m rather than the £44m originally planned.

The document says: “Prior to the Covid outbreak, the extent of efficiency and transformations savings were forecast at circa £90m with a budget of £44.4m.

“There is now considerable financial risk emerging, that will not be fully understood for some time yet although early assessments have been made. There are a number of assumptions in the analysis that will require ongoing review as the country starts to return to normal and enter into a recovery phase which will be challenging in the lead up to setting budgets for the two unitary councils.”

It adds: "Although there may be some delay in delivering the benefits due to COVID impacts we still expect to achieve annual benefits rising to £85m a year. With one off costs of £55m this still represents a significant return on our investment and a positive legacy for the two new Unitary Councils."

The document does not make the additional cost breakdown explicit, but says it has been tallied by bringing in the costs of social care transformation and the creation of the children’s trust, which has had the majority of funding already allocated by the county council and the department for education.

The new super councils will not be as fully functioning as first planned due to local government officers in Northamptonshire diverting their attention to dealing with providing services and looking after residents during the pandemic.

They will now be ‘safe and legal’ and Northamptonshire County Council’s chief executive Theresa Grant who is leading the local government reorganisation has said the two new shadow councils being set up this week could decide to ask government to postpone unitary reorganisation for another year if they don’t think they can do it.

The main difference between the original unitary aspiration and the current plan is that the two councils will be linked and commission services from each other in the initial period.

Elections due to be held this month were cancelled due to Covid-19, meaning long-serving existing councillors will be those making important decisions about what shape the new council services will take.

Leader of the Liberal Democrats group at NCC Cllr Chris Stanbra says the situation was ‘all a bit worrying.’

He said: “We are having to pay £11m to more to get less. Now the plan is for the new councils just to be safe and legal.

“I have sympathy for the officers trying to deliver this, as they appear to be stuck between a rock and a hard place.”

It is not known how much impact the pandemic will have on the finances of the eight councils that are being wound down to create the two new unitaries. Due to years of government funding cuts to local authorities, and in some cases poor financial management, none of the authorities are carrying huge amounts of reserves.

To deal with the crisis, central government has handed out million pound cashpots to every local authority in the country but many are saying the funding has not been enough and are warning they will need additional cash to keep afloat.

Northamptonshire County Council has already outlined that it may have a financial blackhole of up to £27m due to the pandemic costs.