We have announced details of how we will tighten spending controls after our Director of Finance issued a Section 114 notice.
What does the Section 114 notice mean?
The notice means that no new expenditure is permitted, with the exception of safeguarding vulnerable people and statutory services. We will continue to honour existing commitments and contracts.
The notice refers to 2017/18 and applies at least until the Full Council meeting on 22 February. The controls may continue thereafter and into 2018/19.
It was issued in light of the severe financial challenge facing the authority and the significant risk that it will not be in a position to deliver a balanced budget by the end of the year. This is an emergency situation where a response is required by legislation.
In order to clamp down on spending an Emergency Expenditure Control Protocol has been set up.
This will ensure that council workers carry out their duties in line with contractual obligations and to acceptable standards, while being aware of the financial situation. Any spending that is not essential or which can be postponed should not take place and essential spend will be monitored.
To that end a Chief Executive Approval Panel has been established to examine and monitor all expenditure and make sure money is only spent as required under statute, to safeguards the vulnerable residents of the county or meet our existing contract obligations.
What spending will be allowed?
The only allowable expenditure permitted under the emergency protocol will include the following categories:
- existing staff payroll and pension costs
- expenditure on goods and services which have already been received
- expenditure required to deliver the council’s provision of statutory services at a minimum possible level
- urgent expenditure required to safeguard the vulnerable citizens of the county
- expenditure required through existing legal agreements and contracts
- expenditure funded through ring-fenced grants
- expenditure necessary to achieve value for money and / or mitigate additional in year costs
Councillors have 21 days from when the Section 114 notice was issued to discuss the implications and this is due to be addressed at the Full Council meeting on 22 February.