Nottingham City Council has confirmed that councillors will meet next week to discuss the next steps that need to be taken to address budgetary issues that led to the issuing of a Section 114 notice.
The notice was issued by the council’s Chief Financial Officer on the 29th November, with the council unable to deliver a balanced budget and leading the council into a period of 21 days prohibition. This saw a tightening of the cost controls that were already in place and a stopping of any spending that was not already committed. Now, the council will hold a full meeting to try and decide on the actions that should be taken.
Council budgets are being stretched across the country, with this mainly coming due to increased pressure on adult and children's social care services, as well as increasing homelessness. This has led to an overspend in Nottingham of £23 million, however, the Revenue Support Grant that the council has received from the government has decreased by £97 million per year since 2013/14.
An Improvement and Assurance Board was appointed following issues in previous financial governance, with this contributing to challenges in the council’s ability to draw on its reserves. To find a solution to this problem, the council is in discussions with the Department for Levelling Up, Housing and Communities to gain permission to meet expenditure from the council’s capital resources.
Speaking about the ongoing challenges, Leader of Nottingham City Council Cllr David Mellen said:
“Every day now, headlines tell of the crisis in local government funding and the impact this is having on councils across the country.
“In Nottingham, a Section 114 had to be issued for the current year as the cost of providing care for adults and children and people presenting as homeless has meant we simply can’t balance our budget this year.
“This needs to be seen in the context of our main grant from government being cut by nearly £100m each and every year since 2013 and the failure to properly address the issues facing both the adults and children’s care system nationally with rising demand and costs overwhelming council budgets.
“As things stand, unfortunately, the budget pressures we are seeing are unlikely to reduce next year and like many councils, we are facing a serious gap in our budget for 2024/25.
“This means officers have had to put forward proposals for significant savings and service reductions which no one would want to make but have to be considered by councillors if the council is to meet its legal requirement to set a balanced budget. The proposals include some valued services and funding that we have been able to continue to provide in Nottingham but have already been stopped by many other councils. Some of the proposals reluctantly have support from the Majority Group on the council, whereas others do not have that support at this stage. We are seeking views of the public on all proposals put forward.
“All of our services are important to us as councillors. Like many other councils, we are faced with some extremely tough decisions over the coming months with our budget gap next year being the worst in living memory. But we are all in this position due to the continued underfunding of local government over many years and the huge increases we are seeing in demand for services as a result of the national cost of living and housing crises.
“We want to be open and transparent about the scale of the challenge the council faces and the difficult decisions that need to be made and give people the chance to have their say…”
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