Nottingham City Council’s accounts won’t be reviewed by deadline amid ‘dreadful’ national backlog

Lead commissioner Tony McArdle (LDRS)
By Joe Locker, Local Democracy Reporter

An auditor cannot provide total assurance over Nottingham City Council’s accounts by a Government deadline due to a significant national backlog.

The financial accounts of public organisations, such as councils, are reviewed by auditors to ensure everything is in order.

The Audit Commission conducted these assessments until it was closed in 2015 under the previous Conservative Government. Work is now outsourced to private firms.

A backlog in audited accounts has since reached an “unacceptable level”, the Government said under former Prime Minister Rishi Sunak.

To address the problem, a statutory deadline has been proposed, which will compel councils to finalise outstanding accounts, even if an auditor fails to complete them and provide assurances.

The number of outstanding accounts peaked at 918 in September last year.

External auditor Grant Thornton is currently reviewing Nottingham City Council’s yearly accounts from 2019/20 through to 2023/24.

During an Audit Committee meeting on Friday (July 26) Andrew Smith, key audit partner at Grant Thornton, said he felt confident the 2019/20 accounts would be done by September.

September had been proposed as the original backstop deadline, however, the recent General Election prompted delays.

Mr Smith said it is anticipated a mid-December date will be brought forward, but this is yet to be confirmed.

Despite the delay, he said it remains “quite likely” opinions on accounts for the remaining years are unlikely to be published by the backstop date.

Lead commissioner Tony McArdle, who was appointed in February to help improve the council, said drawing a line despite audits being incomplete is the “least-worst” option available amid the national challenges.

“The frustrations that are being expressed are being expressed in many council chambers by members all over the country,” he said.

“No one wants to be in the position we find ourselves in, particularly so in a council which has got some of the challenges and difficulties you have got, that is particularly galling, really.

“But we are where we are. What is being reached for here is not the best solution, but the least-worst solution for the circumstances of which we are in.

“The least-worst solution which has been concluded is to draw that line and be able to move on… and get back on a level playing field, albeit without the assurance that you would want to have.

“No one can defend we have got into this position. It is dreadful. But it is the least-worst solution that is currently available.

“By all means express frustration but we are where we are, and the best thing that can happen now is that we start from the other side of that line.

“Let us hope that when the review of previous years is carried out that we don’t find something we didn’t know about.”

Cllr Adele Williams (Lab), the chair of the committee, said she would be drafting a letter to the new Labour Government expressing concerns the external auditor is not providing the service required.

“I think Nottingham people will feel they are very poorly served by the system of external audit and the way that it works,” she said.

“We fully recognise we’ve had some historical challenges, and there are still challenges which we all recognise exist in Nottingham City Council.

“In a way that makes it even more important that we are able to have the service that we are paying for to ensure it is being delivered in a timely [manner] and helps us to function well, and better, as a local authority.”