Nottingham City Council’s financial problems have improved from “terminal to critical”, its deputy leader says. The Labour-led authority says its budget gap for the year beginning April 2025 has reduced from £69m to £23.4m.
An overall cumulative budget gap over the next four years has also fallen from £172m to £56.8m. Deputy leader Cllr Ethan Radford (Lab) says the improved finances are down to a combination of factors, including a better than expected settlement from the Government and “large-scale transformational changes”.
A raft of new savings and cuts, including £17.9m to be delivered next year and £24m over the next four years, were also announced in December. Among the plans are reviews of adult social care services, including “high-cost” care packages, as well as back office savings, including the “streamlining of layers of management and team sizes”.
The latest budget plans have been drawn up with an expectation council tax will increase by 4.99 per cent from this April – the maximum amount allowed. However, this is yet to be confirmed, and discussions are still taking place with the Government to determine if further increases of up to 9.99 per cent may be needed in future years, budget reports say.
“While the financial situation has somewhat improved going from a terminal situation to a critical one – which is the direction of travel we want – we still cannot rule out all the options available to us,” Cllr Radford told the Local Democracy Reporting Service (LDRS).
“We will receive an extra thirty-plus million pound in our settlement from the Government. You will see the difference in that in some of the decisions we now have to make.
“It is not necessarily the extra money has bailed us out of having to make difficult choices, but it does go a long way to redress the damage that has been done from 14 years of austerity.”
The council declared itself effectively bankrupt in November 2023, after it was unable to set a balanced budget. It was subsequently given Government permission to use asset sales to fund day-to-day operational costs to the tune of up to £65m.
According to budget documents, published on Monday (January 13), the council is again expecting to require Exceptional Financial Support of up to £25m for the 2025/26 financial year, and up to £10m in 2026/27.
It is then hoping it can achieve a balanced budget without support after two years, with the help of the Government’s recovery grant and the delivery of further savings.
A team of commissioners – Government-appointed experts – were first sent in to help run the Labour-run council in February last year. The team consists of lead commissioner Tony McArdle, finance commissioner Margaret Lee and commissioner for transformation, Sharon Kemp.
Addressing the council’s latest financial position, the commissioners said in a statement: “It reflects considerable work undertaken reviewing the finances of the authority and the finance team should be congratulated for this work.
“Uncertainty remains on some areas of the budget including the final government settlement. The authority must monitor delivery of this budget carefully to ensure savings are delivered and risks managed.”
Cllr Kevin Clarke, leader of the Nottingham Independents and Independent opposition group, added: “I think the culture is changing and changing rapidly.
“It was legacy cultural issues that kept us like mushrooms in the dark. But I feel [council leader Cllr Neghat Khan] is more forthcoming and more willing to work with us. It is a credit to her the way things have changed.”