Northamptonshire County Council overspend 'may break law'

Auditors KPMG said the council may have overspent by £58.9m

A cash-strapped council may have broken the law by overspending by nearly £60m and failing to balance its books, an auditor has said.

In April government commissioners were sent in to run "failing" Northamptonshire County Council due to its financial problems.

It announced it had ended 2017-18 with a £12.7m overspend, which it met from reserves to balance the budget.

But auditors KPMG said it may have overspent by £58.9m.

KPMG lead auditor Andrew Cardoza criticised the "non-compliance culture at Northamptonshire County Council".

He told councillors at a meeting of the council's audit committee the situation was "something that you have to address".

By law all councils must balance their books and no authority in the country has ever failed to do so.

'Microscopic' reserves

Mr Cardoza said some of the capital receipts used to balance its budget may not have been allowable.

"There is a possibility that the council's budget did not balance. Until we have completed our work I can't say yes or no," he said.

The council's chief finance officer Mark McLaughlin said: "The current level of reserves is microscopic and there is nothing to play with.

"Do we have a negative fund balance? It is a possibility and the implications are unknown. We would need to take legal advice."

Along with all local authorities the council has had to make huge savings over the past few years due to big cuts from central government.

An independent report said the council had "failed in its duty" to provide services and should be scrapped.