Nottingham City Council fully accepts the findings of a rapid review carried out on behalf of the Ministry of Housing, Communities and Local Government and is committed to continuing to build on the strong action already taken to address the issues it identifies.
In response to the report, Council Leader Councillor David Mellen has stressed his determination to continue to make the stability of the council’s long-term finances and services one of his very highest priorities.
The non-statutory review led by Max Caller raises serious concerns around past financial management and governance, stemming from a recent Public Interest Report into the council’s governance of Robin Hood Energy.
The review team said it was impressed with the determination of the council’s new leadership to stabilise the current situation and take the necessary decisions to bring about improvement.
Councillor Mellen said: “This report highlights significant concerns around our budget management, levels of borrowing and debt and reliance on savings and income from commercialisation. These are many of the areas that my team and I have been focused on tackling since I became the Leader.
“I was determined from day one when I took over just 18 months ago to ensure that there is financial and service stability at the council. I will never shrink from tackling the big issues on behalf of residents and my determination is stronger than ever. This latest report triggered by the Robin Hood Energy issue has served to strengthen my resolve, and I want to assure the people of Nottingham that under my leadership, we will always aim to work with integrity, listening to those who elected us.”
Cllr Mellen said that during his short time in post as Leader he has taken decisive action on Robin Hood Energy, and has driven forward an action plan to address the governance issues highlighted in the Public Interest Report. Further action is underway to find new ways to protect essential front line services which have been so important during the pandemic, while making hard choices about the sort of council that will be needed in the future, through service changes and reductions.
The report highlights that Covid has made the financial challenge for the City Council much more difficult. Cllr Mellen said: “Throughout the Covid crisis we have been focused on making sure our services are there for people when they are most needed and that the council can go forward with ambition for our city and our residents.
“The review acknowledges that, like local authorities across the country, we have seen a substantial reduction in Government funding as a result of years of austerity but despite this, we have managed so far to protect front-line services and jobs.
“One of the ways we have been able to do this is though developing commercial opportunities to bring in additional income. However, Covid-19 has had a huge effect on this activity and exposed the risks associated with it. While the pandemic is not the cause of the issues raised by the Review, its financial impact has intensified the already very difficult challenges we face.
“The review highlights the ambitious vision the council has had for the city and recognises how important it is that councils seek to improve their areas for everyone’s benefit. We won’t lose our ambition to do the best for Nottingham but like councils up and down the country, we need to modernise and change to meet the needs of local residents and businesses and establish a sustainable financial footing.
“We have made a good start but we know there is much more work to do and we will continue to engage fully with the MHCLG about next steps and our focus on further improvement.
”The fact that I and my new team of Executive Councillors were highlighted positively in the report tells me that we’re now on the right track to delivering a stronger and better council for the people of Nottingham.”
Mel Barrett, the council’s new Chief Executive who joined the authority in September, said: “The review team said it was impressed with the determination of the Leader and his Executive colleagues to stabilise the current situation and take the necessary decisions to bring about improvement.
“We hope and believe this demonstrates confidence that we can deliver the changes needed, building on the work we have already begun following the publication of the Public Interest Report in the summer. We are confident that the plans we are currently developing will enable us to balance the budget next year and stabilise our financial position beyond that.
“In the short time I have been here, I have also been impressed by the focus and determination to not shy away from these issues and to find a way forward that ensures we have a council fit for the future and serving our residents in the best possible way.”
The report recommends that the council should:
- Produce a three-year recovery plan by January 2021 to set out the actions needed to restore the financial viability of its capital programme and revenue budget and implement a more robust medium-term financial planning process. The plan should be overseen by a new Improvement Board established by the Ministry of Housing, Communities and Local Government in partnership with the council and led by a strong, independent chair with sector experience with members appointed as non-executive directors/mentors to support and improve performance.
- Review its constitution within six months to ensure that the roles and responsibilities of members and officers and the framework within which they operate to clearly define decision-making processes, performance management and procedures within the Council
- Conduct an in-depth assessment of its group of companies during the first year of the Improvement Plan and integrate conclusions within the medium-term financial planning process to determine the future status of each company as part of the council group
- Produce a clear policy statement within six months which establishes the roles and responsibilities of nominated non-executive directors and shareholder representatives and incorporates it as an element of the Constitution, ensuring that this relationship is clearly defined within all council owned company agreements within a further six months.
Read the rapid review report here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/943647/201127_NCCreport.pdf
Read a letter from Robert Jenrick MP to head of the review Max Caller here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/945822/201217_SoS_response_to_Nottingham_Review.pdf h