By Joe Locker, Local Democracy Reporter
New documents have revealed Nottingham City Council “does not have a good financial grip” on its budget over the coming year and faces even more cuts and savings to bridge a £26m gap.
According to the Labour-run authority the hole in its budget for 2023/24 has opened up due to factors including rising inflation and a nationally-agreed staff pay award.
The cost of supporting people who are homeless because of the cost of living crisis and reduced Government funding have also been blamed.
The council is also predicting a gap of £50.9m in the 2024/25 financial year.
Then, over a four year period up to 2027, this is expected to rise again to £58.7m.
The holes in its budgets will now have to be met through yet more “difficult” savings, which must be decided before March next year.
They will come on top of a range of cuts and other measures which have already been carried out, including the axing of jobs and a rise in council tax.
The council’s deputy leader, who also looks after finance, Cllr Audra Wynter, said: “The identification of a £26m in-year budget gap is significant and serious, and some difficult decisions about transforming the way we deliver services and doing some things differently will be needed, along with strong financial discipline.
“We are determined to do so, to set a balanced and realistic budget over the medium term, and keep the council on a sustainable financial footing.”
These predicted gaps also follow an overspend in its general fund last year.
As of the end of the financial year up to March 31, 2023, the council noted a £9.8m overspend, around four per cent over what it had anticipated in its budget for the year, as approved back in March 2022.
This overspend will be met entirely using a fund called the Financial Resilience Reserve.
However, in terms of the budget gaps over the next four years, the amount of savings required exceed what is left in the council’s financial reserves.
Cllr Kevin Clarke, the leader of the Nottingham Independents and Independent Group, said city residents “had better hold on to your hats”.
“Here comes another council tax rise, it is crazy,” he said.
“That is what they will do. There will be more cut-backs.
“People are questioning what they get from these council tax payments.”
The council has broken down its budget pressures in documents released ahead of an Executive Board meeting on July 18.
People Services are forecasting the most significant pressures of £14.536m, of which £7.1m relates to adult social care, largely driven by external placement costs and growing demand, as well as a further £6.9m relating to children’s services due to similar reasons.
The Community, Environment and Resident Services department is
reporting a net budget pressure of £1.273m, largely due to a £700,000 markets overspend.
Around £600,000 is related to Victoria Centre Market, £137,000 due to lower stall occupancy at Bulwell Market, £83,000 due to lack of investment at the Colwick Car Boot, and £41,000 at Clifton Market due to low occupancy.
The total overspend was slightly offset by staff vacancies which saved £200,000.
The Growth and City Development department is reporting a net overspend of £2.946m, largely due to an increase in demand and costs of using bed and breakfast accommodation as temporary housing.
Further, the Finance and Resources department is reporting a net overspend of £2.9m, driven by a failure to deliver previous budget savings as well as historic budget issues.
The Corporate department is also reporting a £4.2m pressure, which the council says is due to the nationally-agreed pay increase which led to an overspend of £9.7m.
The £9.7m has been offset by a £5.9m underspend in treasury management, put down to income from investments.
Other costs have arisen due to the ongoing need to meet targets set by a Government-appointed improvement board, which was put in place upon the collapse of Robin Hood Energy.
Costs largely come from the need for consultants and agency staff in many departments.
