By Andrew Topping and Anna Whittaker, Local Democracy Reporters
Opposition leaders at Nottingham City Council have warned the Labour-led authority has a “long way to go” despite the Government deciding against sending in commissioners to intervene in its decisions.
The Department for Levelling Up, Housing and Communities confirmed on Friday (September 2) it would not directly intervene and take over control of the authority’s spending and decision-making.
The announcement came after months of speculation commissioners could be sent in to run the authority following a series of serious financial problems.
Had commissioners been sent in, decisions could have been taken out of the hands of elected members and senior officers and handed to Government-appointed officials.
It came in response to a number of problems including the collapse of council-owned company Robin Hood Energy in 2020, understood to have cost city taxpayers an estimated £38m.
Separate internal investigations also found up to almost £40m had been wrongfully transferred out of the ringfenced Housing Revenue Account (HRA) and spent on other services.
In June, the Government said it was ‘minded to intervene’ following the HRA investigations and asked submissions for and against intervention to be sent by July 7.
Twenty-five responses were received as well as a direct plea from council leader David Mellen (Lab), with the Government reading assessing the submissions up until last week.
On Friday, the Secretary of State Greg Clark said the authority had made “significant progress” on a wide-reaching improvement plan aimed at addressing several financial and governance issues.
These were overseen by a Government-appointed improvement board, chaired by Sir Tony Redmond, who has seen his powers increase after the council were told to continue following his advice.
Sir Tony will continue to monitor the authority and another review is due by the Government in the new year.
Now, following the news, opposition leaders say the authority is not yet safe when it comes to intervention.
Councillor Kevin Clarke (Nottm Ind), opposition leader in the chamber, told the Local Democracy Reporting Service: “I still don’t feel enough has been done.
“There’s the money from the HRA and that’s one of the main stumbling blocks for me, I don’t think it’s been explained enough and how quickly it’s going to go back into it.
“I think this is probably why the Government is still keeping a close eye on them. I’d like to know a little more detail about it, nobody seems to have held their hands up.
“But I think the Government probably has made the right decision because we can see a little bit of progress, it’s come after a lot of pressure but it’s there.
“The next three months will be vital for the council and I’m sure if there’s not vast improvements and more speed, there’s still time for the Government to come in and take over.”
Cllr Andrew Rule, leader of the Conservatives, also believes the council is not “home and dry” when it comes to intervention.
He Local Democracy Reporting Service: “Frankly, if we were out of the woods, the improvement board would’ve been disbanded.
“The leader has already been saying this is testament to the success he’s had, but the fact budget issues will have even more scrutiny may indicate the level of improvement he is suggesting is not quite the case.
“I think there is still a long way to go, we’ve still got significant issues with council debt that needs addressing and clearly the Secretary of State will be watching what happens.”
The council was praised by the Government on Friday for successful steps it has taken to improve operations at Loxley House.
This includes setting a balanced four-year budget, reducing debt levels, reviewing council-owned companies like EnviroEnergy and selling Thomas Bow, and transferring housing services back into council control.
It was also praised for implementing new governance models and for creating its new constitution.
Senior leaders must report to the Secretary of State at six-monthly intervals with the board’s oversight to last until at least September 2024.
Responding to the announcement, the council’s leader Cllr Mellen said: “We know there is a lot more work to do but we have demonstrated our determination to address the issues.
“I’m confident we will continue to work well with the board to make the progress needed to emerge a better council.”
