Balancing the books Northamptonshire's £165m challenge

1. Balancing the books Northamptonshire's £165m challenge Theresa Grant Chief Executive of Northamptonshire County Council 26th June 2019

3. For those of you on Mars last year. This happened………… INVESTIGATION LAUNCHED INTO COUNCIL COMPANY Council slashes budgets to stave off bankruptcy FRESH SPENDING CONTROLS AT CRISIS COUNCIL SCRAP NORTHAMPTONSHIRE COUNCIL INSPECTORS SAY COUNCIL MISSPENT £8M OF PUBLIC HEALTH MONEY FOURTH CHIEF IN EIGHT MONTHS FOR BANKRUPT COUNCIL

4. Too challenging an opportunity to pass up INVESTIGATION LAUNCHED INTO COUNCIL COMPANY Council slashes budgets to stave off bankruptcy FRESH SPENDING CONTROLS AT CRISIS COUNCIL SCRAP NORTHAMPTONSHIRE COUNCIL INSPECTORS SAY COUNCIL MISSPENT £8M OF PUBLIC HEALTH MONEY FOURTH CHIEF IN EIGHT MONTHS FOR BANKRUPT COUNCIL

5. On arrival in July 2018 the in-year deficit was unknown First achievement – identifying the deficit in 2018/19 £64.4m * We had eight months to fix it - with no reserves * As per S114 statement

6. First task: Stabilise Create Belief Single focus Transparency / Trust Standards Pace Doing the boring well (Max Caller)

7. Stabilisation and Recovery Plan Financial Plan Prevention Productivity Investment

8. What was true financial position – both 2017/18 and 2019/20? Stabilise – new controls on spend following s114 Team approach and ownership to identifying new options Stabilise – new savings plan for 2018/19 in August (known as the Stabilisation Plan) Regular monitoring – need to identify further measures: workshop 7 Jan ‘19 Use of LG finance regime – capitalisation direction November ’18 Budget set for 2019/20 Create dialogue with new external auditor Financial Plan

9. Capital Dispensation Three components: Deficit from 2017/18 (£41.5m) Create unallocated reserve (£20m) Management of savings in Stabilisation Plan (£8.5m) Allowed use of £3.7m to address legacy financial issues and £4.8m into reserves No cash injection from government

10. Reserves Position Assumed Flexible Use of Capital Receipts in revenue budget: 2016/17 £12m 2017/18 £17m 2018/19 £31m

11. The 2018/19 Story.From Bankruptcy to Balanced: • 2017/18 – From a deficit of £35m (which rose to £41.5m) to a balanced position. • 2018/19 – From an in year shortfall of £30m (and a budgeted savings target of £35.4m) to an underspend of £2m. • In addition earmarked reserves of £8.5m have been created. • 2019/20 – From a projected shortfall of £60m with no plans to deliver to a savings target of £41.4m supported by a transformation plan. • In addition a general reserve of £20m has been created.

12. 2019/20 NCC Budget 4.99% Council Tax Increase £m Gross Budget 1.218.0 Income 800.3 Net Budget 417.7 66% of net budget spent on care services No Pay Award! Saving £41.4m

13. 19/20 Savings Breakdown Total savings: £41.415m Transformation Activity £21.753m in 19/20 plus £3.766m in 20/21 full year effect £19.662m deemed low risk

14. TRANSFORMATION THEMES

15. Example Children’s Services • Total Budget £134.9m • Spend on staff £53.2m (too much of this though is on Agency) • Spend on Care packages £81.7m • One cause of cost = high case load ratios leading to crisis management and lack of planning and result…too many young people in expensive care placements. • Staff morale suffers, people leave and the situation gets worse and recruitment becomes very difficult, so we have to spend more on high cost agency staff. • We need to do more • Prevention • Capacity in the system (Foster Care, Guardianship, Adoption) and local provision where possible • Better business models to address high cost care and shape the market Causes of Cost

16. The next challenge following stabilisation is to make sure it’s sustainable • The past approach, ‘salami slicing’ savings which didn’t work and has left scars on the workforce • Trying to build trust at all levels and changing the past reputation of failure and addressing the impact negative media has on morale • The organisational culture, working in silos, protecting budgets • Basics not in place, like no corporate centre, no stability in financial reporting, no accountability or ownership People, culture and Behaviours

17. Dynamics and Political Landscape Leadership Team, Cabinet and Commissioners ONE TEAM WORKING TOGETHER FOR NORTHAMPTONSHIRE

18. Rebuilding relationship with Government

19. Striding confidently to the futureUnitaries Programme

20. PROSPECTUS FOR CHANGE An integrated plan for Local Government Reform and Transformation in Northamptonshire

21. Local Government Reform 2 Unitary Councils

24. Our Growth ambition • Both West and North have delivered significant housing and jobs growth in recent years and will continue to do so as two unitary councils. While the North has well-established development planning arrangements to build on, LGR will provide the West with an opportunity to create a stronger, united voice within SEMLEP and the Oxford – Cambridge Arc and with Government departments so that the benefits of growth can be maximised across both unitary areas. Page 9 Page 9 Page 10 Page 10

25. So…it’s been quite busy! And now we have to deliver two unitaries, to an immovable deadline, that cannot fail…