Government inspectors have been sent in to Northamptonshire County Council over concerns about the authority’s finances.
In a ministerial statement this week, communities secretary Sajid Javid said that the initial focus of the inspection would be on corporate governance and financial management systems.
The intervention comes after external auditor KPMG issued adverse value for money opinions in relation to the councils’ last two years of accounts.
Javid said: “This decision is not taken lightly. I hope it sends a strong signal that robust processes are in place to investigate allegations of failures in financial management and governance in local government.”
The communities secretary said he had also considered a peer review of the council, published last year, carried out by the Local Government Association.
That review found “signs that the council may be experiencing in some areas weaknesses in the compliance with proper financial and other processes”.
It also found that, although the council understands its short and long-term financial prospects, “the difficulty was being able to identify solutions to address the scale of the challenge it faces.
“There is a tradition of producing medium-term financial plans — but they have not worked because too many components of those plans have proved to be unreliable and undeliverable,” the report said.
It also raised concerns over transparency and “a lack of sufficient challenge among officers and from members”.
In a statement, council leader Heather Smith welcomed the government’s inspection announcement.
She said: “We have been very clear with senior government ministers and civil servants about the issues facing the county and the growing financial pressures we are facing.
“This announcement means they will be coming to the county to assess the situation for themselves and be able to see how we have continued to deliver public services in an ever-challenging financial context.
“We have been fully open and transparent with the government about our situation and have been direct in our request for assistance.
“We have also been clear that our proposed funding settlement from them includes no recognition of the pressures we face with the escalating cost of, and demand for, adult social care and children’s services respectively. We look forward to the next stage of the conversation that this inspection will necessitate.”
The inspection, called by Javid using powers under the Local Government Act 1999, is being expected to report by March 2018.
Javid said: “Once the inspection is complete, I will carefully consider the inspection report. If it shows that the council is in breach of its best value duty I will then consider whether or not to exercise my powers of intervention under section 15 of the 1999 Act.”
A year ago, Damon Lawrenson, interim director of finance and section 151 officer at Northamptonshire, told Room151 that calls from Daventry District Council for intervention were an attempt to “deflect the spotlight from our proposal to create a unitary authority for the county”.
The LGA report said that since Lawrenson was appointed, “there has been a much stronger financial grip”, although there was “much more to do”.
