Section 114 notices

Northamptonshire County Council has issued a section 114 notice, a technical tool that halts all non-essential expenditure as the Council cannot be confident of meeting current liabilities and does not have the reserves to bail it out. Unlike the NHS, local government must demonstrate through its accounts a balanced budget of income and expenditure. Northants CC has in effect declared bankruptcy; a care provider would in this case be sold or the company wound up, but local government cannot do this due to its unique position. This extraordinary move in the south midlands, the first since Camden Council did the same in the 1990s, is an indication of the extreme financial pressures that all local government, and in particular rural councils, face. Whilst the section 114 will not affect statutory adult social care directly (although there is a downward pressure on care contract prices as in all areas), the impact of cutting non-statutory services further will be felt further down the line as people become more isolated and loneliness increases, as well as with key prevention services being cut.

It’s hard to see an end to the current impasse of austerity policy causing ever-tightening financial constraints and it would not be a surprise to hear of other councils making the same move – Birmingham, Brighton and Surrey have all raised concerns over recent years – even if Northants appears to be in a particular pickle of its own making with extreme out-sourcing.

Without substantial policy change at a national level, nothing will happen. A section 114 will be just a formal notice that there is not enough money in the system to provide adequate public services. However, like all notices that we observe, we note them, and then they slip from our consciousness without really perceiving the root cause.