Home City Council’s response to Government statement on proposed intervention

Nottingham City Council has pledged that the major improvements it has been making to financial governance and management will continue in light of the Government’s announcement that it is minded to appoint Commissioners to take over some decision making functions to ensure compliance with the council’s best value duty. This relates to:

  • The governance and scrutiny of strategic decision making by the Authority
  • The strategic financial management of the Authority under section 151 of the Local Government Act 1972
  • The appointment and dismissal of persons to positions the holders of which are to be designated as statutory officers, and the designation of those persons as statutory officers under section 112 of the Local Government Act 1972.

Council Leader, Cllr David Mellen said: “The Government’s decision to appoint Commissioners follows our discovery last December that Housing Revenue Account funds had been allocated unlawfully. This was a significant setback but it’s important to understand that we brought the matter to light ourselves as part of our work to tighten up our financial and governance arrangements and have already taken swift and direct action to address the issue, including seeking the necessary ministerial direction to pay the money back into the Housing Revenue Account.

“In light of the improvements we have been making, it’s clearly disappointing that the Housing Revenue Account issue has led to the Government taking the action it has. We understand that it will be a major concern for city residents, council staff, our partners and local businesses but we are committed to working with Commissioners on any further improvements we need to make.

“Our staff do a great job providing vital services to city residents and we will support them to continue to do that in the months and years ahead.”

Chief Executive, Mel Barrett said: “We have been making good progress on our recovery and improvement plan over the last 18 months, working closely with the independent Improvement and Assurance Board appointed by the Government to oversee its implementation.

“We have had a positive relationship with the Board and its chair Sir Tony Redmond. Sir Tony’s appointment as the lead commissioner therefore provides reassurance and continuity. This, and the fact that commissioners have been appointed for two years rather than the normal three, is recognition of the progress we have already made over the last 18 months.”

The council has agreed a balanced Medium Term Financial Plan covering the next four years, a key requirement of the previous Non Statutory Review, and within that a balanced budget for this year without the need for any other financial support or intervention.

It is also continuing to bring down overall debt levels significantly and taking a strategic approach to disposing of property assets to bring an income to the council.

A review of council-owned companies is continuing and all the recommendations of two independent reports into the Housing Revenue Account issue commissioned by the council are being implemented, including bringing housing management back in-house, to ensure problems are resolved, the money is returned to the HRA and the same mistakes can never happen again.