County Hall budget overruns despite Whitehall help

12.00.00am BST (GMT +0100) Wed 15th Apr 2009

A crunch financial report to County Councillors yesterday saw County Hall budgets overrun by £1.1m this year, despite one-off savings gained from new accountancy rules.

County Hall bosses benefited from government rules allowing roads and other major works to be accounted for differently, resulting in one-off balance-sheet savings of up to £4m this year.

Without the changes, Northamptonshire County Council would have overspent on key projects by over £5m, instead of the £1.1m indicated in today's papers.

The report also highlighted the council's failure to deliver its budget on target, citing budget pressures of £8.5m planned as 'savings' last year.

The figure - a shortfall of 30% on the council's savings target - will come as a further blow to the embattled Conservative administration just days after news of its mismanagement of a £34m privatisation deal.

Commenting ahead of this afternoon's meeting Liberal Democrat Opposition Leader Brian Hoare said:

"The accuracy of this year's overspend must be called into question. There is no provision in today's report of the huge legal costs that will flow from scrapping the Conservatives' Carillion contract two years early.

"There can be no doubt that County Hall bosses will have run up thousands in legal fees for a report that said that Cllr. Parker had agreed to an illegal deal in 2007.

"There are also concerns that the termination of the Carillion contract could event result in claims for commercial compensation - a further cost not covered in the report.

"Taxpayers will need to know that the council's overspend could in fact be much higher."

ENDS

Notes to Editors:

1. Cabinet Agenda 14th April 2009 item D8 (Page 165 to 178)

2. Reference to £8.5M budget pressure Para 6.3

3. Reference to £3.75M Minimum Revenue Provision Para 6.10