City Council sets its budget – agrees Government package for the future

Loxley House image


Nottingham City Council has accepted an arrangement with Government allowing it to borrow £20m this year, which will help to secure stable finances over the coming years, as part of an overall package of £35m offered to the council.

Earlier this week the council set its budget for the forthcoming 2021/22 financial year, making limited use of reserves to deliver a one-year balanced budget after an exceptional year.

With unmet Covid costs and loss of income totalling £26m, as well as one-off costs relating to Robin Hood Energy, the council took a number of difficult decisions to ensure that there is an agreed budget for the year ahead.

However, it recognises that to maintain longer term financial stability, more work is needed to modernise its services, embrace new ways of working and strengthen its financial position.

During the year, the council received two important reports – a Public Interest Report from the external auditor and a Government-led non-statutory Review – which raised concerns around past financial management and governance. The council has accepted all recommendations in the reports and has committed to a Recovery and Improvement Plan which will modernise and change the way services are delivered. 

The Government is allowing the council to borrow £20m this year through capitalisation – a process allowing the council to spread certain day-to-day costs over a number of years – enabling it to put the Recovery and Improvement Plan into action and smooth the impact of Covid and other financial pressures. Several other councils from across the country, including Peterborough, Eastbourne, Luton, Wirral, Croydon and Bexley, have already agreed similar arrangements. The council is working closely with the Recovery and Improvement Board to ensure delivery of its plan.

A further £15m has been agreed for 2021/22 subject to the council demonstrating ongoing need and meeting certain conditions. 

A special meeting of the council’s Executive Board is meeting today (March 12th) to agree the approach.

City Council Leader, Cllr David Mellen, said: “The city needs a strong, resilient council which can deliver effectively and efficiently for its residents and businesses and can continue to play a central role in shaping a fairer, greener, more inclusive city post Covid  – and this step will help us achieve that. This is not a grant to the council, it is permission to spread the costs of Covid and other one-off costs over a longer period. This, along with the input of the Improvement Board, will help us change the way we operate as a council and secure stable finances over the longer term.

“Despite the challenging economic climate over the past year, our ambition for Nottingham remains undimmed.”

Portfolio Holder for Finance, Growth and the City Centre, Cllr Sam Webster, said: “We have taken some difficult decisions to set the budget for the forthcoming year. Now we are turning our attention to longer-term recovery. 

“We are working with our new Recovery and Improvement Board to transform and modernise the council so that our key services are high quality, accessible and financially sustainable given the trend of reduced Government funding. This head room will ensure that we maintain a firm financial footing and are able to deal with future challenges effectively. Government has allowed us to spread some of our costs over a longer period to help stabilise our finances.”

Share this post!