City Council admits there is a ‘mountain to climb’ after leaked report into finances

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Loxley House, home to Nottingham City Council
By Kit Sandeman, Local Democracy Reporter

The report has now been sent to the Government, and is yet to be formally published, but a Government response to the recommendations made  is expected imminently.

It found that without Government help, the city council is currently unable to set a balanced budget for next year – something which has to be done by law by March 11.

It also recommended the Government impose legally-binding borrowing restrictions on the council, and that a Government task force be set up to monitor progress.

A statement from the council issued today said: “Nottingham City Council has fully accepted the findings of a rapid review carried out on behalf of the Ministry of Housing, Communities and Local Government.

“The non-statutory review led by Max Caller focused on issues identified in a recent Public Interest Report on the council’s governance of Robin Hood Energy, the not-for-profit company it set up to tackle fuel poverty in the city.

“The report has not yet been formally published and is currently with the Local Government Secretary for consideration.”

The review was led by Government Investigator Max Caller, who also led the review of Northamptonshire County Council.

The leader of the council, Councillor David Mellen, who represents the Dales ward for Labour, said: “Max Caller, who came in and asked very searching questions of us … concluded that the government can have confidence in the political leadership and Mel (Barrett) as the new chief executive to take us forward and make the decisions that are necessary.

“He didn’t have to conclude that, and we didn’t know before he came that he would and of course we gave a good account and an honest account of our situation and of our determination to do better.

David-Mellen
City Council leader, David Mellen, admits there is a ‘need to change’. Photo: Joe Raynor.

“We have a great ambition for our city and although we are in difficult times that doesn’t mean our ambition is any less strong. It’s not diminished, it just means that there are tough times to come through in the next year or so to get ourselves through this.”

Asked about how he would achieve the huge scale of cultural change which the report says is necessary, he said: “I think it’s already started, and we will continue to do that.  I think we need to be open and have a level of humility that there are things that have gone wrong in the past and we are trying to put those right.

“There is a need to change and there is a need to take notice of what people coming in have looked at and said we need to do and there’s also a need to to respond in a medium to long-term way.

“It’s not about what we can do in the next few weeks, it’s what we can do in the future to exist within a budget that is less than the ones we’ve had.

The Chief Executive of the council, Mel Barrett, said: “I think it’s been seen that we’ve made good progress in relation to the Public Interest Report and the action plan, that we’ve been doing well in terms of progressing against that.

“It’s about understanding how we move forward with a smaller budget than we’ve had before.

“We hope and believe this demonstrates confidence that we can deliver the changes needed, building on the work we have already begun following the publication of the Public Interest Report in the summer. “

Asked about what level of support he expected would be needed from the government in order to be able to set a balanced budget for the forthcoming financial year, Councillor Mellen said: “We’re currently in our budget processes as we normally are at this time of year, and looking to make reductions, and savings and plan for next year’s budget.

“Not only have we got the implications of Robin Hood Energy and the losses we will make because of that we also have COVID which like many other councils around the country not all of our COVID costs have been met (by the Government).

“But we do need to make significant changes.  We had an in-year budget this year where we made significant savings and reduced the headcount by around 200 staff and we will have to look at new savings and we will go out to consultation for those in the new year.

He went on to say: “The review clearly raises serious issues around financial management and governance that need to be addressed urgently.

“It highlights that we have been slow to act on warnings about the risk of relying on one-off savings and income through commercialisation and that we should have been managing budgets on a longer term basis to reduce core expenditure and transform services.

“The council’s capital expenditure and high levels of debt compared to other cities is also flagged up as a major concern with the cost of borrowing restricting our flexibility on day-to-day spending.”

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