Council's cash crisis nearly forced merger

The Craven District Council emails contain serious concerns raised by the authority's executive director of resources, Susan Goodhall, who believed talks were taking place over a merger with Harrogate Borough Council.

In the correspondence, which was between her and Craven council leader Christopher Knowles-Fitton, she claimed the merger could result in significant job losses and "death by a thousand cuts" for the authority.

Craven chief executive Paul Shevlin and his opposite number at Harrogate, Wallace Sampson, denied there are plans to merge the authorities.

Mr Shevlin said the finances at Skipton-based Craven are now secure and it has a partnership agreement with both Harrogate and Selby Council, with each authority retaining their own sovereignty.

The correspondence includes a discussion in late October last year, when Coun Knowles-Fitton states the two councils are expected to "get closer over the nest few years" and possibly reach a stage for a unitary authority.

Ms Goodhall said: "I am not involved in discussions in respect of the potential merger with Harrogate probably because Paul (Shevlin) is aware that I don't support it.

"Any merger for the future should ensure that as a prerequisite that this is not a process of death by a thousand cuts and a significant loss of employment to Craven." She later states: "We seem to be moving very quickly to a takeover situation."

Earlier correspondence between the two, in June last year, revealed it was the council's fragile financial position that was the main cause of concern.

Ms Goodhall stated that the authority was in "an extremely parlous financial state", that she was certain that the witch hunt to blame officers for the economic problems would prompt a move for "forced merger" and the council would "not exist for much longer".

The council has made numerous changes in the past year to try to rectify its finances after it was left in difficulty when projects were approved in the belief there was 500,000 budget underspending – only to later discover 700,000 overspending.

In February it announced savings of 270,000 for this financial year and will contribute 300,00 to its depleted reserves.

In December the agreement between Selby, Harrogate and Craven was announced.

The Collaboration Concordat sets out a framework for investigating areas in which they can pool resources and is based on a number of key principles, including that political sovereignty will remain with each council.

Mr Shevlin said: "Craven District Council is not considering a merger with Harrogate Borough Council. The emails contain individual viewpoints made in a private conversation that was never part of formal council business over eight months ago.

"At the heart of the concordat is an agreement that each council would retain its own sovereignty with its own set of members and decision-making processes.

"The concordat is not a legally binding agreement – any authority can walk away from it at any time."

Mr Shevlin said that as a result of the agreement, the council shares a director with Harrogate, as well as audit and strategic housing staff.

He said: "A report will go to the three authorities explaining how the concordat will be taken forward. In this time of Government cuts we are very sensibly keeping our options open in terms of how we can work with our neighbouring authorities."

The news came as it emerged that Hull Council has been paying about 800 a day to two interim managers – deputy chief executive Ian Stratford and corporate director of business support Siobahn McHale.

Temporary chiefs' 800-a-day fees 'obscene': Page 4; Comment: Page 12.