Scale of financial challenges underlined after government announcement

26 June 2013

Northamptonshire County Council will have to make savings in the order of £100 million over the next four years (2014/15 – 2017/18) following the government’s spending review today – roughly in line with the authority’s own projected figures.

Why are the savings needed?

As part of the effort to reduce the nation’s budget deficit, Chancellor George Osborne announced that funding to local government for the financial year 2015/16 would be reduced by 10 per cent.

The county council had already forecast in its medium term financial plan that it would have to allow for government budget reductions of about eight per cent. The extra two per cent equates to about an additional £3million.

However the county council welcomes the news that the government will be funding a further council tax freeze over the next two years as well as the announcement that it will build 20 new university technical colleges (UTCs) nationwide. Northamptonshire already has two UTCs, but the council is keen to see the provision of them extended to the north of the county.

Cllr Bill Parker, county council cabinet member for finance and performance, said: “One of the advantages of the county council making a medium term financial plan is that it helps us make preparations so this sort of announcement doesn’t take us by surprise.

“This reduction in government funding is a little bit more than anticipated which goes to show the scale of the financial challenge we face as a nation.

“What we need to do now is go away and consider this revision of the figures and see what this means for the authority.

“However, it is good news that the government will be funding a further freeze in council tax and will be expanding its programme of building university technical colleges as this is something we are keen to pursue.”

What's happened so far?

The county council has so far responded well to its financial challenge, making savings of £144million between 2009/10 and 2012/13 and being on track to make savings of £33million in the current financial year, 2013/14.

The council’s current medium term plan is projecting savings of about £77.5million for the three financial years, 2013/14 to 2015/16.

Each year as well as a reduction in funding from central government the council also has financial pressures from inflation and population changes.

Nationally, economic output has not yet recovered to 2008 levels, despite some quarters of growth. National debt is also running at about 80 per cent of gross domestic product.


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