'Significant cuts' still needed despite £65 million extra help for Nottingham

Nottingham councillors say “hard decisions” will still be needed despite the Government approving over £65 million worth of extra financial support for the city. Library closures, the loss of hundreds of jobs and a maximum increase in council tax are among dozens of measures set to be approved in Nottingham from April.

Even with all of those plans, the Labour-led Nottingham City Council was in danger of being unable to meet its legal duty to deliver a balanced budget. Councils who feel that they are unable to balance their budgets issue a Section 114 notice, a move which Nottingham City Council took last year.

The authority’s budget for the ongoing financial year is still around £25 million short and its budget for the next financial year, starting in April, was set to be around £40 million short – despite the planned cuts. The Government’s announcement today (Thursday, February 29) is set to fill both gaps.

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The support does not take the form of direct cash payments, but instead gives the council permission to use money raised by selling off assets in a different way. The permission means the city council can use such money to cover its day-to-day running costs.

So far, the Government has only said it is “minded to” allow the extra financial support. Outlining the conditions of it, a letter from local government minister Simon Hoare to Nottingham City Council’s leader, Councillor David Mellen, says: “Your council will need to demonstrate that it continues to take all necessary steps towards improvement.

“The secretary of state will require assurance from the commissioners that you are making good progress.” Three commissioners were recently installed at Nottingham City Council and their first report to the Government is due within six months.

Mr Hoare’s letter also says: “You will be aware that on January 24, the secretary of state announced the expectation for all councils to produce a productivity plan focused on improving service performance and reducing wasteful expenditure. I wish to emphasise that this productivity plan should be completed alongside your ongoing improvement and recovery work.

“I expect you, your members and council officers to work constructively with the commissioners, including in the exercise of your duties to set a budget, for the people of Nottingham.” The council’s final budget meeting is due to take place at the Council House on Monday (March 4).

In a statement on the Government’s announcement, the Nottingham Labour group said: “While this will help achieve a balanced budget for this year and next year, it is not a long-term solution. More importantly it does not address the fundamental underfunding of local government by the Conservative Government.

“This is not a bailout from Government- it just lets us use our own money differently. Austerity means that we still have to make hard decisions.”

Professor Peter Murphy, director of the public policy and management research group at Nottingham Business School, said: “The Government agreement… means that Nottingham City Council can approve a budget at full council later this month, allowing at least some spending in Nottingham across all their services in 2024/25. They will still, however, have to approve significant cuts in their services.

“The fact that [the Government has] issued these amounts of money to 19 councils demonstrates that the number of councils in financial distress is rising and the amount of short-term relief overall has risen. This remains a short-term sticking plaster to what is really a long-term strategic financial challenge for all councils.”

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