Delays to financial plan seen as key to improvement at Nottingham City Council


By Matt Jarram, Local Democracy Reporter

Nottingham City Council has hit a delay on delivering important plans showing how it hopes to spend money and save a total of £38m over the next four years to avoid Government intervention.

As part of the council’s recovery from serious financial problems, the Government said the authority needed to deliver its Medium-Term Financial Plan by November – but the authority now says it will not be available until February 2022.

The council says it needs to know how much future funding it will get from Government to finish the plan – and this won’t be known until December.

The council is currently under close Government scrutiny after it ran into serious financial problems and was accused of ‘institutional blindness’ over its running of failed Robin Hood Energy.

The energy company set up by the council to compete with the ‘big six’ including British Gas plummeted into administration, leaving taxpayers with an anticipated £38m bill.

Now, the council is being monitored by an improvement and assurance board chaired by former Government ombudsman Sir Tony Redmond.

He must report back to the Department of Levelling up, Housing and Communities on a quarterly basis over the council’s progress.

Progress includes achieving ‘financial resilience’ in terms of setting its budget and creating a ‘culture change’ across the whole of the authority.

If the council fails, then Government commissioners could be called in to run the authority in the future.

The council has already identified £12.2m of savings for 2022/23, which includes proposals to close six children’s centres.

But there is still £15.7m it needs to find to balance its budget next year. Plans on how to close this gap have not been revealed yet.

Cllr Sam Webster (Lab), portfolio holder for finance, said in total £38m is needed to balance its books over the next four years.

And a full Medium-Term Financial Plan is needed –  but this will not now be presented to the council’s Executive Board until February 2022.

Leader of Nottingham City Council, Cllr David Mellen (Lab), previously said the medium-term financial plan is the “biggest priority” for the improvement board and that the council needed at least three years of plans by November 16 – but this deadline has now been missed.

A city council spokesman said: “As noted by our Improvement and Assurance Board, we are reporting progress towards finalising a Medium Term Financial Plan (MTFP) to this month’s (November) Executive Board, and are on track for that plan to be presented to the Executive Board in February and the Full Council meeting in March 2022.

“The council doesn’t receive its financial settlement from Government until next month, and we wouldn’t be in a position to finalise this work until that happens.

“The Board understand both the financial pressures on the council and the work being done to address those pressures.

“We believe we can demonstrate good progress towards the MTFP.

“As well as the budget saving proposals of £12.2m for 2022/23, we have managed to reduce projected in-year overspends significantly and embarked on a widescale and far-reaching transformation programme which will help us to maintain long-term financial stability.

“We trust that all of this gives the Improvement and Assurance Board and the Government the confidence that we are serious about and capable of the change and pace that’s needed.”

Cllr Webster added: “Just as other councils across the country are setting out their spending proposals in challenging circumstances, we are also working through the budget setting process. Councils have a legal duty to balance their budgets each year.

“As we allocate more money to social care services and deal with the costs of Covid, we are faced with a budget gap as are many other councils in England.

“At this stage we have an outstanding funding gap of £15.7million for the next financial year. Our plan to close this gap is being worked on and will be published in February.”

The city council added: “The challenge is considerable and just like many other councils, we are having to make difficult choices to deal with the growing cost of care services for elderly residents and the increasing costs of children’s social care.

“The Local Government Association highlighted that English councils will need £2.7billion in additional funding by 2024 to fund the increasing costs of caring-for and safeguarding the most vulnerable children.

“The growing costs of some vital council services comes on top of unprecedented Government funding cuts in recent years, which for us in Nottingham amounts to over £100million less funding per year than we received in 2013.”

A spokeswoman for The Department of Levelling up, Housing and Communities, said: “The Improvement and Assurance Board continue to work closely with the council and their fourth report will be published in due course.”

Speaking in the last quarterly report, MP Kemi Badenoch, Minister of State for Equalities and Levelling Up Communities, said: “I share the Board’s concern regarding the council’s overall financial resilience, and it is disappointing that the council has yet to produce the three-year Medium-Term Financial Plan (MTFP).

“My expectation is that a robust and balanced MTFP will be brought before the council’s Executive Board in November.”

She then added: “It is imperative that the council continues to engage constructively with the Board and that it makes rapid progress given the scale of the challenge.”

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