Financial doubts on city home rule bid

SHAUN LOWTHORPE Norwich's bid for home rule was dealt a fresh blow last night after auditors ruled the city council's finances were still not fit for purpose.


Norwich's bid for home rule was dealt a fresh blow last night after auditors ruled the city council's finances were still not fit for purpose.

The independent Audit Commission raised continuing doubts about how council taxpayers money was being managed and spent.

The watchdog had trouble tracking how the council kept it accounts in check and warned its finances were “inadequate”.

Overall the report said the indications were of a trend of “slow improvement” across a number of areas, but added weaknesses “continue to impact on the council's financial standing” and performance is generally mixed.

Norwich is one of 16 councils shortlisted to become a unitary council able to run all council services from schools to transport within its borders.

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Ipswich is also on the shortlist, but is facing tough opposition in Suffolk as the county council steps up its campaign against the bid.

Critics argue the 17-page report is a further nail in the coffin for a controversial home rule plan they argue will lead to cuts in nearly 100 frontline posts and library closures and ministers should veto the bid when a final decision is made in July.

But city council leader Steve Morphew insisted the council was getting its financial act together and it was wrong to link the findings to the unitary case.

The commission's annual letter says that no detailed budget book was produced for the current financial year while councillors were in the dark about how far finances were adrift because budget monitoring data was not reported to members on a regular basis.

Spending plans for this year's capital programme were “not prepared and approved in time” while the council's asset management plan and its corporate strategy are “out of date”.

“The council's financial management remains weak,” the report said. “Financial systems are not yet fit for purpose.

“The financial position of the council needs to be strengthened and the budget monitoring process needs to be improved to ensure that budgets are regularly reviewed and updated and the financial position is monitored more closely.

“Until the overall approach to financial management improves there is a significant risk that the council will not be able to achieve its ambitions,” it added.

Mr Morphew, who was in London yesterday meeting ministers about the unitary bid, said turning the authority around was never going to happen overnight.

“It's not a big blow,” he said. “It's an unacceptable state of affairs as it would be for any council in these circumstances, but what we are talking about is looking at the future, not the council's performance under the previous administration.

“What the Audit Commission are saying to us is that the work in hand is good stuff, but we are not there yet, and we accept that.

“We do not want a quick fix,” he added. “We want to sort it out properly. It would have been easy to apply a sticking plaster to make it look better, but we want to get it right.

“All the people responsible for this situation have gone, there's a new chief executive and leader in place. We have restructured and are about to set up an audit committee,” he added.

Daniel Cox, leader of Norfolk County Council said the audit letter raises wider question marks about the city council's ability to get its sums right on the true cost of the unitary bid for Norfolk.

“It's a blow for the residents of Norwich,” he said. “At the end of the day all the figures they have put into the bid are not approved and it raises huge question marks about how reliable the information they have provided is.

“If you are going to be unitary you need to have robust arrangements and systems in place, yet the Audit Commission believes their current systems are not up to scratch and that's a major concern.”

John Fuller, leader of South Norfolk council, which is holding a special 'unitary summit' on June 6 to discuss the city's bid said time was running out for the proposal.

“With each day that passes their unitary dream is slipping away,” he said. “Norwich should never have been on the list. It's much better that they get their own house in order and deliver value for money services for their own council taxpayers.”

The news comes after it emerged that ministers clashed over the number councils which should be shortlisted for unitary status. Chief secretary to the treasury Stephen Timm warned communities secretary Ruth Kelly that doubling the number of councils on the shortlist was too great a risk and likely to raise “significant expectations” which could not be delivered in a tight spending environment.

The city council's ruling executive was due to discuss the letter last night but it will now be considered next month after several key players including Mr Morphew were unable to attend the meeting.

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