A statement from Councillor Ethan Radford, Deputy Leader and Executive Member for Finance, and the Council’s Corporate Director for Finance and Resources (151 Officer), Stuart Fair
Since the government announced its decision on Local Government Reorganisation there has been a sharp increase in misinformation surrounding the finances of Nottingham City Council.
People are entitled to their own views – of course – but they are not entitled to their own facts, and misinformation should not go unchallenged, nor will it go unchallenged.
Residents deserve an honest conversation about the future of local government in Nottinghamshire, and our city does not deserve to be used as a political football by Members of Parliament and Council Leaders.
There are four main pieces of misinformation being spread:
- That the council is bankrupt
- That the council is crippled by debt
- That the council is being mismanaged
- That LGR is only happening to bail out the city
We will be very clear that not one of these allegations is true. But don’t just take our word for it – here’s the evidence.
“The council is bankrupt”
The financial struggles faced by local government are well documented. And Nottingham City Council is no stranger to those struggles. But we have defied the odds – going from government intervention to a top financial performing core city in just three years.
Our budget gap has fallen to normal and manageable levels, and while the council was given permission by government to use up to £100m of its own resources including capital Receipts in the form of Exceptional Financial Support to balance its books, we used only £20m and have not had to use any for our 25/26 accounts or the 2026/27 approved fully balanced budget which included a reduced rate of increase in Council Tax.
We said we’d get our house in order, and we have. Nottingham City Council’s finances have dramatically improved – so much so that £25m has been invested in front line services such as street cleaning, safety and communities.
It was also announced this month (July 2027) that a £20m underspend would be used for further frontline investment, totalling £45m worth of investment in services in a two-year period. In addition, the council set the lowest council tax increase its seen since 2008, 18 years ago, at 3.5%. Lower than the council tax increases seen in other areas of the county.
These facts do not support the claim Nottingham City Council is bankrupt.
“The council is crippled by debt”
Since 2021, Nottingham City Council hasn’t borrowed a penny and has reduced external borrowings to £392m debt by some 53% from 2020, from £827m.
These facts do not support the claim Nottingham City Council is crippled by debt.
“The council is being mismanaged”
In 2023 the government appointed commissioners, and independent third party, to oversee Nottingham City Council for a two-year period.
In that time the council undertook immense internal changes and improvement to become a renewed council that delivers for local people and leads Nottingham forward.
As a result, Nottingham City Council completed its commissioner-led intervention on time, with the departing commissioners publicly reporting to government that the financial recovery had been ‘almost unimaginable’.
These facts do not support the claim that Nottingham City Council is being mismanaged.
“LGR is only happening to bail out the city”
Nottingham City Council’s finances are now in a stable and healthy position.
The 2026/27 budget was set with a forecasted surplus, the lowest council tax increase in 18 years, no use of reserves and £25m of front-line investment. Within 2025/26, General Fund Reserves increased to some £317m with HRA Reserves totalling some £140m.
While there is still much work to do for residents to begin to see and feel the change, the council’s finances are in a much healthier state than many other councils in England.
Nottingham City Council does not need the assets, council tax or revenue from areas in the county to balance the books, because we are already balancing our books without LGR.
Suggestions that as a result of LGR residents in the county will have their council tax increased and services cut to bail out the city are hard to believe, when the approved option was subject to strict criteria, independent review, a statutory consultation, engagement with councils and stakeholders, and a full assessment by the Ministry of Housing, Communities and Local Government before finally being chosen by the Secretary of State.
Financially, the chosen option has the best equitable allocation of council tax raising capability. Indeed, modelling carried outby PwC used in the submission to government, highlighted that implementation benefits would be greater than implementation transition costs within the early years of operation for the new Nottingham unitary, such is the financial stability that Nottingham city is bringing to the formation of the new arrangements, the most significant change in Local Government in this area for some 50 years.
These facts do not support the claim that LGR is only happening to bail out the city.
Whatever you think about LGR, this is a once in a generation opportunity to shape our region, so it works for the people who live in it. It has its pros and cons, as with all things. But as we embark on this huge piece of work together, let’s do so basing our arguments in fact, not fiction.