By Andrew Topping and Anna Whittaker, Local Democracy Reporters
Nottingham City Council will not be taken over by Government commissioners but must continue to follow recommendations set out by an improvement board.
The Department for Levelling Up, Housing and Communities has today (September 2) confirmed it will not directly intervene with the Labour-run authority.
Instead, the powers of the independent Improvement and Assurance Board, currently overseeing progress on the cash-strapped authority, will be strengthened.
The Government had previously said it was ‘minded’ to send in the commissioners after investigations uncovered almost £40m had been wrongfully moved out of the Housing Revenue Account.
Had that been the case, the financial decisions could have been taken out of the hands of elected members and senior officers and handed to Government-appointed officials.
It was found that the housing cash, which was supposed to be specifically for housing tenants, had instead been pumped into other services through the general fund.
The internal investigation marked another financial blunder at the authority following the collapse of Robin Hood Energy in 2020, costing the taxpayer an estimated £38m.
The authority had already been under the watchful eye of the Government through Sir Tony Redmond prior to the ‘minded’ statement being made.
In making the statement, the Government asked for representations for and against intervention to be made by July 7.
In total, 25 representations were offered to ministers as well as a direct plea from Councillor David Mellen (Lab), council leader, for commissioners not to be sent in.
Now the department has confirmed that, following the representations, it will not be taking over the authority for now.
However, councillors and senior leadership must follow the recommendations of Sir Tony and the board and another assessment will be made in the new year.
During the period of Sir Tony’s oversight, the council was told it had made “significant progress” in improving operations at Loxley House.
This includes setting a balanced four-year budget, reducing debt levels, reviewing council-owned companies like EnviroEnergy and selling Thomas Bow, and transferring housing services back into council control.
It was also praised for its work with the Local Government Association and the Chartered Institute of Public Finance and Accountancy on implementing new models of operations and for its new constitution.
To make further improvements, the Government has said the council must comply with all future recommendations set out by Sir Tony and the improvement board.
Senior leaders at the Labour-run authority must report to the Secretary of State on six-monthly intervals with the intervention of the board to last until at least September 1, 2024.
In a report, the Government said: “The Secretary of State notes the improvements made by the authority with oversight from the Improvement and Assurance Board over the last 18 months.
“The building blocks for recovery have been put in place, and it will be essential this is continued through further constructive partnership working with the Improvement and Assurance Board, sector organisations and the local community.
“The Secretary of State is satisfied that the council is failing to comply with its best value duty.
“However, following detailed consideration of representations received by the authority and other interested parties, he has decided to modify the ‘minded to’ proposal.
“[Instead, he issues] directions [for] the Council to follow the advice of the Nottingham City Council Improvement and Assurance Board as a necessary and expedient action to secure compliance with their best value duty.
“He expects significant progress to be made over the next three months, and he will again consider exercising his powers from the 1999 Act, including the appointment of Commissioners, in the new year.”
Responding to the announcement, Cllr Mellen welcomed the news.
In a statement, he said: “The decision not to appoint Commissioners shows that our representations about the positive progress we were making with the current Improvement and Assurance Board have been listened to and taken into account by the Government.
“I would like to thank the significant number of partners and stakeholders who wrote to the Government in support of the council and the progress we were making.
“This was acknowledged by the Secretary of State who said that he wants to offer help not punishment.
“We know there is a lot more work to do but we have demonstrated our determination to address the issues which led to the non-statutory review and I am confident we will continue to work well with the board to make the progress needed to emerge a better council.”
But Conservative councillor Andrew Rule said the news didn’t necessarily mean the council were “home and dry”.
He told the Local Democracy Reporting Service: “I think the important thing, is although commissioners aren’t coming in at this stage, the government has massively increased the powers of the improvement board.
“I would suggest that on that basis we aren’t home and dry. Frankly, if we were out of the woods the board would’ve been disbanded.
“I think there is still a long way to go, we’ve still go significant issues with council debt that needs addressing and clearly the secretary of state will be watching what happens.”
