By Matt Jarram, Local Democracy Reporter
The Leader of Nottingham City Council has responded after the Government announced plans to bring in commissioners to intervene in the running of the local authority.
The Labour-run Council is already being monitored by a Government-appointed board, chaired by Sir Tony Redmond, after the collapse of Robin Hood Energy in January 2020.
The council energy company lost taxpayers an anticipated £38m and the board was set up to monitor a recovery plan.
But in May it was revealed that up to £40m of ringfenced cash from the council’s Housing Revenue Account had been misspent on the wrong services.
The council housing tenants’ rent – which should have been pumped into council housing and repairs – was put into general council services instead.
The subsequent Penn Report, commissioned by the council, says the money was misspent, and in some cases was used to prop up other council services and to avoid job losses.
It found that the local authority has misspent up to around £22.8m since 2014/15 while Nottingham City Homes, which manages the council housing stock on behalf of the authority, misspent up to £17.1m.
The Labour-run authority said commissioners would take over “some decision making functions”.
This includes strategic financial management, governance and strategic decision making and appointment of statutory officers.
Cllr David Mellen (Lab), leader of the council, said: “The government’s decision to appoint commissioners follows our discovery last December that Housing Revenue Account funds had been allocated unlawfully.
“This was a significant setback but it’s important to understand that we brought the matter to light ourselves as part of our work to tighten up our financial and governance arrangements and have already taken swift and direct action to address the issue, including seeking the necessary ministerial direction to pay the money back into the Housing Revenue Account.
“In light of the improvements we have been making, it’s clearly disappointing that the Housing Revenue Account issue has led to the Government taking the action it has.
“We understand that it will be a major concern for city residents, council staff, our partners and local businesses but we are committed to working with Commissioners on any further improvements we need to make.
“Our staff do a great job providing vital services to city residents and we will support them to continue to do that in the months and years ahead.”
Chief Executive of the council, Mel Barrett, added: “We have been making good progress on our recovery and improvement plan over the last 18 months, working closely with the independent Improvement and Assurance Board appointed by the Government to oversee its implementation.
“We have had a positive relationship with the Board and its chair Sir Tony Redmond. Sir Tony’s appointment as the lead commissioner therefore provides reassurance and continuity.
“This, and the fact that commissioners have been appointed for two years rather than the normal three, is recognition of the progress we have already made over the last 18 months.”
The council says it has made some significant improvements including making £38m savings over the next four years.
It has also brought down its overall debt, which at one point sat at around £1bn as well as selling off buildings and land it no longer requires.