Four-year dispute over defunct council cash ends

The dispute arose from splitting the balances of the defunct Northamptonshire County Council

A four-year dispute over cash from a defunct council has been resolved.

West and North Northamptonshire councils had been unable to agree about how to split £40m from the accounts of Northamptonshire County Council, which was abolished in 2021.

Politicians had been warned that the process was taking too long and there was a risk of "reputational damage" if no agreement could be made.

But the Conservative leader of North Northamptonshire Council, Jason Smithers, said he was "really pleased" both authorities could now "sign on the dotted line".

Four years on from the shake-up of local government in Northamptonshire, the detail of the reorganisation is still being finalised.

Northamptonshire County Council was abolished in 2021 after effectively going bankrupt and the government decided the seven district and borough councils should also be scrapped.

Northamptonshire County Council, which had offices at John Dryden House in Northampton, was abolished in 2021

Two unitary councils, covering everything from social care to planning, were created instead - West Northamptonshire and North Northamptonshire councils.

Handing over the finances of the old districts and boroughs caused no issues because none of them crossed a boundary between the two new councils.

The issue that created a major headache was dividing the assets and liabilities of the county council, which covered both areas.

County Hall was one of the Northamptonshire County Council assets inherited by West Northamptonshire Council

The councils said some of the accounts were "technically difficult" and could only be sorted out by examining decisions made decades ago.

According to the Local Democracy Reporting Service, an external auditor told West Northamptonshire Council he could not sign its accounts until the dispute was resolved.

"To be candid, I just think you're being too slow," said the auditor.

"We're into year four now of the organisation's life and we've not agreed a position."

It appears the councils have now heeded the warning and hammered out a deal.

Adam Brown (left) of West Northamptonshire Council and North Northamptonshire's Jason Smithers are pleased they have an agreement

Mr Smithers said: "I’m really pleased to say we find ourselves in a position now where we are ready to sign on the dotted line.

“It was really important that both authorities weren’t left disadvantaged in any way, shape or form.”

Adam Brown, the Conservative leader of West Northamptonshire Council, said: “Thankfully, with a lot of hard work from officers and the political will from the two leaders, we’ve got to an agreement we’re both very happy with."

North Northamptonshire Council's executive is expected to approve the split on Thursday, and West Northamptonshire's Cabinet will also consider the issue in due course.