Northamptonshire, the canary in the mine

Every so often, I try to address an issue on this blog that goes wider than the specific concerns of the Division that I represent. The implications of the crisis at Northamptonshire County Council are such an issue.

Northamptonshire has fallen into deep financial crisis. It has twice had to issue what is called a Section 114 notice, stopping all but essential spending to meet its stautory obligations. Following the Caller Report into the financial problems at the authority, local government in the County is to be restructured, with both the existing County and seven District and Borough Councils being replaced by two unitary authorities. The Councils have agreed to this, effectively voting to end their own existence. The leadership, both officer and Councillor, at the County Council, has been removed. I know the new Leader, Matthew Golby, with whom I sit on the Local Government Association's (LGA) Children's and Young People's Board; he is an able man with an excruciatingly difficult job. Government inspectors have been sent in to oversee the Council's activities.

What has happened? The Caller Report identified many errors made by the Council's previous leadership, reflected in over-optimistic budgeting and excessive faith in ill-defined 'transformation' projects. The Council seems also to have clung too long to holding down Council Tax. But all this was an inadequate response to a set of pressures that are affecting all of local government, and County Councils in particular. As Professor Tony Travers, perhaps the country's foremost local government expert, put it: "the burden of lowering the deficit has fallen on unloved sectors and services, notably provision within the oversight of the Home Office and the Ministry of Housing, Communities and Local Government. Grants to councils in England fell by almost 50% between 2010-11 and 2017-18, and spending in real terms has tumbled by almost 30% on average."

This reduction came at a time when spending pressures were increasing. In the early years of austerity, a lot of attention was paid to what was known as the 'Barnet Graph of Doom' - a set of projections by that London Borough to show how rising demands in social care and waste disposal, coupled with grant reductions, would inexorably squeeze out other spending.

This is exactly what has happened, as commentators such as Tony Travers and Simon Jenkins have recorded. Adult social care needs continue to rise, even if in Kent we have partially mitigated this by delivering savings from an overhaul of services. Government has, to a degree, recognised this through allowing dedicated increases in Council Tax and support through the Better Care Fund, but this is only a partial response. Children's social care - part of my Cabinet responsibilities - continues to see upward pressure; the LGA estimates that there will be a £2 billion spending gap in this area by 2020. And so other services - the visible, universal services that most directly connect Councils to their communities - such as Highways and amenity services, as well as the preventative services such as youth work have taken the strain. Ever wondered about the state of roadside verges? This is why.

This affects all of local government, but as the County Councils Network has pointed out, counties are particularly vulnerable, because they have huge exposure to demand-driven services such as social care, yet benefit less from revenue from new homes than District or Unitary authorities. It is little wonder that other councils, some Counties notable among them, have been identified as being at risk.

In Kent, under the skilled stewardship of the late John Simmonds and of Andy Wood, we have delivered over £600 million in cumulative savings since the start of the grant reductions. While our reserves are not as high as those of some authorities, we have maintained a stable financial position. We have done this while defending services as much as possible; for example, our youth service is much reduced from its levels of a decade ago, but remains more substantial than that of many councils.

However, the next few years will remain very testing, not least because central government is approaching the end of its current spending cycle and will undertake a fresh Comprehensive Spending Review to cover the years from 2020 onwards. Additional commitments have been made to the NHS; by contrast, it is unclear whether local government will again be expected to be in the front line of reductions. With reducing government grant, a narrow financial base of its own and strong demand-led pressures, local government is in a position where, without significant change, something has to give. Whatever its past errors, Northamptonshire is telling us something.







 

John Simmonds, public servant

My colleague John Simmonds, KCC Cabinet Member for Finance 2009-18 and Deputy Leader of the Council 2013-17, died on Sunday. He was 82.

It was quite a long life - though 82 is not exceptional these days - and a very good one, and in that sense we cannot mourn too much. But the sense of loss is still very big.

John was elected to KCC in 2001 after a successful banking career. He was community-minded and a public servant before he was a Councillor, deeply involved in the life of Whitstable (in which he had lived since 1964), chairing the Whitstable Castle Trust and serving on the council of the University of Kent.

In his long tenure of the Finance portfolio, he had to oversee huge savings, amounting to over £600 million, as local government was put in the front line of central government's austerity drive. He cared passionately about the services that the Council commissions and provides - he served two years in the post that I have held subsequently, of Cabinet Member for Education, and brought huge commitment to it - but he also knew that the books had to balance. In these toughest of times, he delivered nine consecutive balanced budgets.

In this, the Council benefited from his financial acumen, as it did when, working with some exceptionally able officers, he oversaw the full recovery of KCC's balances with Icelandic banks. But what also marked him out was the sensitivity with which he oversaw this difficult process, and slowly and steadily built consensus behind the savings. He was never a Treasury hatchet man. In this, he formed a great partnership with Andy Wood, who left as KCC's Director of Finance a couple of months ago. One of Andy's great sadnesses at his farewell to the Council was that John was by then too ill to attend.

John and I sat next to each other in Monday morning Cabinet meetings for many years. He was delightful company, thoughtful and well-informed, and with a lively and sometimes risqué sense of humour. He was, until his final illness, inspirationally vigorous in his late seventies and into his eighties. He was a family man and a public servant, a moderate and internationalist Conservative - as his Conservative Association chairman put it, "he was one of the good guys." This is farewell to a colleague and a friend.