By Andrew Topping, Local Democracy Reporter
Nottingham City Council must have financial plans in place by next month showing three years of balanced budgets to reduce the risk of Government intervention, the council’s leader has said.
The Labour-run authority is under the scrutiny of Government assessors following a string of financial issues, including setting up failed Robin Hood Energy company.
The company’s collapse caused an estimated £38 million in losses to the authority. The Government has since given the Labour administration three years to get finances back on track.
The Government has already stressed the risk of “statutory action” to limit the council’s debt, estimated to be slightly below £1 billion, while an Improvement and Assurance Board (IAB) has been set up to monitor the council’s ongoing progress.
This board is required to produce a quarterly report to the Secretary of State for Housing, Communities and Local Government, now Michael Gove, on the council’s progress against its Recovery and Improvement Plan.
And now Councillor David Mellen (Lab), leader of the council, has confirmed the authority must ratify a balanced three-year budget by its November 16 executive board to reduce the risk or likelihood of Government intervention.
He says the council is aiming to produce a four-year financial plan.
Speaking at the overview and scrutiny committee meeting on Wednesday (October 6), he said: “It would be true to say our medium-term financial plan is the biggest priority for the improvement board.
“They want us by the executive board in November to have set a balanced budget, not just for this year but for three years, though we’re aiming for four [years].
“That involves budget savings and our transformation programme, to try and change the way we do things, to drive up savings.”
He added: “There are some things we absolutely have to do.
“If we haven’t got this budget by November 16, the risk of Government intervention is then greater than the risk of taking our time.”
It comes as the council looks to sell off some of its surplus assets to help both balance its books and meet the IAB’s requests.
Cllr Mellen told the committee around £13 million of council-owned land was sold last year, with the authority in the process of selling off about £12 million of land over the coming months using the same method.
He says ‘many assets’ have been listed for sale, stressing however this would still not be enough and more cuts or sales would be needed to meet the financial targets.
This includes the controversial closure of John Carroll Leisure Centre, in Radford, and other initiatives designed to recoup finance.
He added several projects have been put on hold as a result of financial pressures and debt, including halting a housing scheme in the Arboretum.
The council will also not be planning any new projects moving forward unless funding can be found.
The authority is currently seeking Government support in the Levelling Up fund for the Broadmarsh shopping centre redevelopment, the Island Quarter and transport infrastructure.
A transformation programme featuring 33 projects, which is in its early stages of development, will also be used to help address the council’s debt and finance challenges.
This, the committee was told, will drive the authority’s recovery, supported and overseen by the external Improvement and Assurance Board.