Nottingham City Council building

Nottingham City Council to develop financial recovery plan

With a clear urgency, Nottingham City Council faces a need to swiftly develop a recovery plan to rectify a potentially perilous financial situation at the local authority.

The situation has come as a result of a highly critical recently-published report, which was delivering the findings of a review set up in the wake of the collapse of the authority-launched Robin Hood Energy – which led to an estimated £38m in losses.

The report, produced by government lead inspector Max Caller, suggested there had been an overlooking of the financial situation at the council, with a three-year rescue plan now needed.

A number of recommendations were laid out by Mr Caller in the report to Government around how to restore financial stability to the local authority, including:

  • Legal limits on how much more debt the council can acquire
  • A Government panel set up to monitor progress
  • A three-year recovery plan to be published by the council by January
  • New national guidelines on putting councillors on the boards of council-owned companies

Responding to the report, Local Government Secretary Robert Jenrick, who is also MP of Newark in Nottinghamshire, said: “I am minded to agree that, on balance, Nottingham City Council should be able to respond to their challenges and take the steps you have recommended.

"This reflects the Leader and Chief Executive’s commitment to change and the fact that the necessary budget management work is now underway. However, it is clear that the Council will require significant and ongoing support.

"As a first step, I agree with your recommendation that the Council should submit a three-year recovery plan by the end of January. This is a short timeframe to produce a substantial piece of work and so I would welcome any support and advice that you and your team can provide to the Council over the coming weeks on this issue.

"In view of the scale of the challenges outlined in your report, I will need ongoing assurance that Nottingham is working at pace to deliver a recovery.

“I intend to appoint sector experts to provide advice and support to the Council over the longer term, including on delivery of the recommendations which relate to governance and company ownership issues.

"I will announce the membership and terms of reference for a Nottingham Improvement and Assurance Board, which will provide regular quarterly reports to me, in due course. I have asked my officials to ensure that the Improvement and Assurance Board is established within weeks.”

In addition to giving the authority time to set up a recovery plan, Mr Jenrick acknowledged that the council would need 'additional support from government in order to balance their budgets'.

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