News, Politics

Commissioners ‘greatly concerned’ over Nottingham City Council’s IT systems despite financial improvements

By Joe Locker, Local Democracy Reporter

---

Government officials appointed to oversee improvements at Nottingham City Council are “greatly concerned” about its IT systems – despite positive progress toward financial sustainability.

The team of three commissioners – led by Tony McArdle – has been providing progress reports since February 2024, just months after the authority declared effective bankruptcy in November 2023.

In their second report, published on May 8, they were “pleased” with the council’s continued “constructive and cooperative working interaction”.

They said they have not formally used any of their powers, with the authority having adopted “clear direction in instituting a wide range of reforms, some of which are bearing fruit”.

However, the report highlights a raft of problems, including dated IT systems, ignored audits, and a continued reliance on emergency measures to set a balanced budget.

The concerns come after the council’s core IT systems and phone lines were disrupted by a “once-in-a-lifetime” outage in March, which impacted its data centre.

All systems went offline, causing damage to files and hard drives.

“We are greatly concerned over the council’s IT infrastructure and systems,” the commissioners’ report says.

“We have required a review of this area due to mounting concerns and despite reassurances, this has revealed some serious and systemic weaknesses.

“These weaknesses are being urgently addressed and are under new management arrangements, but will require some investment to complete.”

The report states that internal audit – where the council checks to see if everything is in order and law-abiding – is largely ignored.

Risk management remains in its infancy, the report adds.

The Labour-run authority says it is still expecting to spend £20.79 million more than it has coming in during the financial year beginning April 1, 2025.

Exceptional Financial Support (EFS), an accounting mechanism that allows the council to use property and land sales to fund day-to-day running costs, has been used to balance the books.

The council hopes to become fully financially sustainable by 2027 to 2028, without using property sales to bridge gaps.

The commissioners say this is a concern, and means the authority continues to operate “beyond its means”.

However, if all actions in a recently adopted Improvement Plan are completed, the reliance on property sales – and EFS – will reduce to just £10m in the year beginning April 2026.

This is down from £41m in the previous financial year, and £25m in the current year.

A reduction in external debt, by £44m over the past 12 months, has also been praised.

It is expected this will reduce by a further £100m by 2029.

Approved budget savings, totalling £38m, also pose a challenge – and “far exceed the level of savings delivered in the past”, the report adds.

Baroness Taylor of Stevenage (Lab), Parliamentary Under-Secretary for Housing and Local Government, said she is pleased with progress – but notes “significant challenges remain”.

“The months ahead will be critical,” her letter, responding to the commissioners’ report, says.

Council leader Cllr Neghat Khan (Lab), and chief executive Sajeeda Rose, said in a statement: “We welcome the commissioner’s second report and the accompanying ministerial statement.

“The progress made over the past year marks an important step forward in improving how we work and how we serve the people of Nottingham.

“While the report rightly highlights that challenges remain, we are fully committed to continued improvement.”