By Joe Locker, Local Democracy Reporter
The leader of Nottingham City Council says the “biggest challenge” facing the Labour-run authority is now inflation as it seeks to balance its books and make big organisational changes amid soaring costs.
In June the Government said was “minded-to” send in commissioners to take control of the council’s operations because of concern over finances.
The decision, which could have cost the taxpayer upwards of £1,000 per day for a lead commissioner alone, came after a series of misspends, some unlawful, were discovered concerning the council’s ringfenced Housing Revenue Account.
Up to £40m, intended for council tenants and the council’s housing stock, had been incorrectly transferred to its general fund.
However, the authority was given the opportunity to appeal this decision, and 30 letters of support were submitted in favour of the council and its continued efforts to improve its culture and finances.
This followed the collapse of Robin Hood Energy in 2020, when a public interest report led to the installation of a Government-appointed improvement board.
Following a cabinet reshuffle, the Government said in September it had decided against commissioner intervention.
However, a series of lesser measures were nonetheless enforced, and there are now 67 requirements the council must adhere to by the end of November, when the chairman of the improvement board, Sir Tony Redmond, will again report to the Government on the council’s position for further judgement.
Leader of the council Cllr David Mellen (Lab) said in a scrutiny meeting on Wednesday (October 12) one of the more significant issues was that of setting a budget for the next four years amid the cost of living crisis, all while enacting the required improvements.
“Recent progress has included work on the revised Medium-Term Financial Plan, we are again working towards a four-year budget like we did last year, clearly in the face of the energy costs, they are really affecting our ability to balance this year and a lot of hard work is going on that,” he said.
“I would say the biggest challenge for us is not just for us, but for all councils around the country, who are facing inflationary pressures and facing fuel pressures, particularly for councils who run swimming pools which cost a lot of money to run.
“There are some things they are more concerned about than others, but we are not at all being complacent that whilst six out of eight things in a particular section might be fine, we need to make sure the other two are as well.”
The council must also conduct a ‘refresh’ of its Together for Nottingham Plan, which seeks to enact change in its culture, operations and finances.
It must now also consider the recent ‘inadequate’ Ofsted rating of its children’s services, which cares for around 725 children at present.
Cllr Jane Lakey (Lab), who represents Bulwell, asked Cllr Mellen: “Given the regular cost overruns and the inadequate Ofsted rating on children’s services, are you comfortable with the detail and credibility of that transformation plan or do you think something more jolting than a refresher will be needed?”
Cllr Mellen said the council had started to work with an organisation called Newton Europe, a specialist in operational improvement, which has been helping other local authorities with similar problems across the country.
He said: “They have worked in many other authorities, not just leafy suburbs, but actually in city councils not dissimilar to our own, where they have brought about significant reductions in the costs of children’s services.”
This, he added, was due to preventative work to stop children going into the care of a council-owned home in the first place, which is typically the most costly intervention.
Intervention in the council will remain until at least September 2024.
At the end of November Sir Tony Redmond will report back to the Government and the position will be reconsidered.
Cllr Mellen added “We are not at all being complacent. There is lots of work to do.”
