Government sends in commissioners to help run Nottingham City Council following ‘bankruptcy’

Loxley House, as seen from Carrington Street
Loxley House, as seen from Carrington Street
By Joe Locker, Local Democracy Reporter

Commissioners are being sent in by the Government to oversee financial improvements at Nottingham City Council after it effectively declared bankruptcy in November.

The Labour-run council issued a Section 114 notice amid a £23m in-year budget gap.

A separate budget gap of £53m in the year beginning April 2024 has also resulted in a series of sweeping cuts being planned.

The council has already been under intervention since the Improvement and Assurance Board was first appointed in January 2021, following the collapse of Robin Hood Energy.

The move to commissioners was announced by the Department for Levelling Up, Housing and Communities on Thursday, February 22.

It will effectively remove power from Nottingham’s elected councillors and place it in the hands of three officials in a bid to speed up financial improvements.

Under the plan a lead commissioner, a commissioner for finance, and a commissioner for transformation will be appointed.

“The Minister for Local Government, Simon Hoare MP, announced that the Secretary of State, after due consideration of representations received, is using his powers under the Local Government Act 1999 to implement his proposals of 13 December 2023 by issuing new directions to Nottingham City Council and appointing commissioners,” the department says.

“The Secretary of State has appointed Tony McArdle OBE as Lead Commissioner and Margaret Lee as Commissioner for Finance.

“A Commissioner for Transformation will be appointed in due course.”

Mr McArdle was previously lead commissioner at the former Northamptonshire County Council and is currently Chair of the London Borough of Croydon Improvement and Assurance Panel.

Commissioners are expected to cost up to £650,000 per year and must be paid for by the council itself.

The lead commissioner is expected to be paid £1,200 per day, while the other commissioners will be paid £1,100.

The current improvement board arrangement will be removed, including its chair Sir Tony Redmond.

Writing to Sir Tony, minister for local government Simon Hoare added: “Moving forward, the Secretary of State and I expect a managed transition from the Board to the Commissioners and that momentum isn’t lost, particularly over the critical budget setting period for 2024/25.

“Thank you once again for your work and for your diligence in contributing to the improvement at Nottingham City Council.”

The council says significant pressures affecting local government nationally, including the cost of increased demand for children’s and adults’ social care and rising homelessness presentations, have led to the budget overspends.

As a result it has requested £65m in Exceptional Financial Support from the government in the form of a capitalisation direction, which allows the council to use capital receipts from asset sales to meet ongoing day-to-day costs as a short-term measure. 

Councillor David Mellen, leader of the council, said: “Our preferred option was to continue to work with the Improvement and Assurance Board which has been overseeing improvements at the council since 2021.

“We feel that significant progress was being made across the council. However, we are committed to working constructively and collaboratively with the Commissioners to tackle Nottingham’s current challenges.”

Mel Barrett, the council’s chief executive, said: “The council is committed to working in collaboration with the Commissioners to continue our improvement journey at pace, reshaping the organisation to put the authority on a stable financial footing, while delivering essential services for Nottingham residents within the resources that we have.

“Our wider transformation work is already well under way and the expert input and challenge from the Commissioners will be invaluable to our officers and councillors as they look to accelerate that process further.”

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