News, Politics

Nottingham City Council reduces budget gap in year ahead to just over £20m

By Joe Locker, Local Democracy Reporter

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Nottingham City Council says it has further reduced its expected budget gap in the upcoming year by just under £2 million – but opposition councillors are concerned over continued spending on agency staff.

The Labour-run authority says it is still expecting to spend £20.79 million more than it has coming in during the financial year beginning April 1 2025.

However, this is down from the £22.5 million in February, meaning its financial stability has improved.

The council’s work to become financially sustainable is being overseen by a team of commissioners, who were appointed by the previous Conservative Government in February last year.

They were appointed just months after the council declared itself effectively bankrupt in November 2023, because it was unable to set a balanced budget.

Exceptional Financial Support (EFS), an accounting mechanism that allows the council to use property and land sales to fund day-to-day running costs, has been used to help keep its annual budgets balanced.

The council says it is hoping to be able to become fully financially sustainable by 2027 to 2028, without using property sales to bridge gaps.

A council spokesman said: “Looking ahead, we’ve significantly reduced our budget gap for 2025/26 to approximately £20.79 million.

“This is a big improvement from the £41 million gap we faced in 2024/25, and we expect this gap to shrink even further.

“With our finances now stable, we’re focusing on achieving full financial sustainability. This will involve successfully implementing our planned transformation program, with a key goal of having a completely balanced budget by 2027/28.”

In November last year the commissioners, led by Tony McArdle, introduced monthly Improvement Board meetings.

They are chaired by the commissioners and involve the council’s executive members and corporate leaders, during which the board scrutinises progress, challenges and solutions to any problems.

Documents have been published showing the council’s progress to meet key milestones under its recently-approved Improvement Plan.

According to the documents the council is making good progress on creating a “learning culture” across the authority, including best practice, and the introduction of a ‘walkabout Wednesday’ has helped increase the visibility of leaders in frontline services.

Leadership changes have also made the council “more effective and better equipped to drive change, embedding a stronger culture for improvement”, documents say.

However problems are still present in the council’s work towards becoming financially sustainable.

Problems include a lack of staff to help deliver the improvements, as well as proper planning for any future unforeseen demand pressures in services which could increase costs further.

Staffing problems led to the council spending more than £18 million on temporary agency workers to fill gaps in its workforce in 2023/24, while a high number of vacancies have been reported in its finance department.

Cllr Andrew Rule, of the Nottingham Independents and Independent opposition group, said: “We ended the last year with a small underspend (£1.4 million) which is good, but then it comes back to accuracy of forecasting.

“It is very nice to have an underspend, but when you’ve been predicting an overspend and made cuts to accommodate that, you could argue there could have been less-harsh cuts with better planning.

“We’ve still got a dependence on agency staff. We need processes in place where interim staff are replaced by permanent staff, with a meaningful handover so that they don’t have to start from scratch.

“Where I think we could have an opportunity is to get more embedded with the two universities, and fill these vacancies with graduates.”