By Matt Jarram, Local Democracy Reporter
Nottingham City Council has made a formal case to the Government to oppose plans to appoint commissioners to intervene in its operation and finances.
The Department for Levelling Up, Housing and Communities had written to the council in June over concerns about the way the council had handled the unlawful spending of council tenants’ rent money.
The department said it was ‘minded’ to send in government-appointed commissioners to take control of the situation, as has happened at a small number of other struggling councils across the country.
However, the minister in charge of the department, Michael Gove, who made the deicison to propose intervention, was sacked by Prime Minister Boris Johnson on Wednesday, July 6.
On Thursday, July 7, Mr Johnson said he would resign as Prime Minister just after the new head of the Levelling Up department, MP Greg Clark, was appointed.
Nottingham City Council had originally been given two weeks to make representations against the government’s proposals to bring in commissioners.
Cllr David Mellen (Lab), leader of the council, and chief executive Mel Barrett, have since sent the government an appeal letter, which will be discussed at full council on Monday, July 11.
The letter states: “Over the last 18 months the council has been undertaking a comprehensive organisation-wide transformation and improvement programme, arising from the need to respond to the failures of governance in relation to Robin Hood Energy.
“We have understood that the seriousness of the issues and the need for improvement was not centred on a narrow technical issue of an individual company, but on the underlying way that we do things and we have sought to do this in an open and transparent way.
“Solid progress has been made including the development and adoption of a four-year Medium Term Financial Plan, improved governance and decision making supported by greater clarity around member officer relationships, together with positive progress being made on our large scale transformation and improvement programmes.
“Cultural change in an organisation takes time, we believe the changes we have made (and will continue to make) show the organisation to be very different to the one it was a few years ago.
“The council identified the Housing Revenue Account issue and was immediately seized on the need to take prompt and serious action to put things right which it has done.
“Furthermore the council is working to an accelerated timescale which will bring housing management under the council’s direct management by the end of this financial year.
“The council has recently completed the sale of Thomas Bow Limited, a highways management business it acquired a few years ago, and Enviroenergy the council’s District Heating company was brought back in-house successfully earlier this year.
“These positive steps have reduced the council’s risk exposure in relation to council controlled companies.”
The council said its “preference” would be to continue with this non-statutory improvement board but added it will work effectively with commissioners if that is the government’s final decision.
Cllr Andrew Rule, leader of the opposition Conservative Group at the council, said: “I was expecting a significant delay yesterday as we had no minister.
“But we now have a Levelling Up secretary in Greg Clark and he will be having a meeting with the Prime Minister over the coming days. I think it will be high up in the in tray.”
The Labour-run authority was already under the watchful eye of a Government-appointed improvement board following the collapse of Robin Hood Energy.
The council-owned company cost taxpayers an anticipated £38m when it went bust in January 2020.
Over the last 18 months, Cllr Mellen said many improvements had been made, including reducing the debt from nearly £1bn to £900m and proposing £38m savings over the next four years.
A culture change is also underway across the whole authority over concerns ‘a legacy culture’ had existed for so long that financial decisions were not being properly scrutinised.
But as part of the council’s transformation programme, it was unearthed in May that up to £40m of ringfenced cash for council housing tenants had been spent on other services instead.
The local authority had misspent up to around £22.8m since 2014/15 while Nottingham City Homes, which managed the council’s housing stock on behalf of the council, misspent up to £17.1m.
This money must now be paid back – with Cllr Mellen stressing “we have that money, we know where the money is, and it will be put back”.
However, the government said it is ‘minded’ to send in commissioners over the Housing Revenue Account debacle.
