By Matt Jarram, Local Democracy Reporter
Nottingham City Council has placed more than £10m into a resilience fund over fears that inflation has reached a 40-year high.
Cllr Adele Williams (Lab), portfolio holder for finance, said there were real fears on the impact the ‘cost of living crisis’ and the rise in inflation will have on the Labour-run authority.
She said a lack of commitment from government on how they will support local authorities is also adding to the pressure.
Cllr Williams addressed the Executive Board at Loxley House on Tuesday, July 19, on the resilience fund.
The council’s net budget for 2021/22 was approved in March and is £243.7m, but with an underspend of £13.9m.
It has therefore been recommended that £3m to be transferred to the IT reserve to enable future investment and £10.9m to the Financial Resilience Reserve.
This will support the council in managing the anticipated financial pressures arising due to rising inflation associated with adverse global events that have occurred after the 2022/23 budget was set in March 2022.
Cllr Williams said: “We see a wave of inflation coming our way just as the cost of living crisis is here – a 40 year-high in inflation and the cost will expand over the next year and how it will fall on different areas of the council.
“I am happy to put the underspend in the resilience reserve because we will absolutely need it. There has been nothing from government on whether they will help out with that cost. It will help us ride out that storm.”
Council leader Cllr David Mellen (Lab) said it shows “a good level of financial management”.
In the same meeting, the council said it has also reduced its debt. It once stood at nearly £1bn but is now £900.9m as of March 31, 2022.
The council is currently under the watchful eye of a government-appointed improvement board following a number of financial issues including the collapse of council-run company Robin Hood Energy, which lost taxpayers an anticipated £38m.
It was also uncovered in May that up to £40m of ringfenced council tenants’ rent money from the council’s Housing Revenue Account (HRA) was put into the wrong services. This money must be put back.
The government has said it is ‘mindful’ to bring in commissioners to help run the authority after the HRA misspending. The council has recently written to the government appealing this decision and said it uncovered the misspend itself as part of its transformation programme to improve the authority.
