Nottingham City Council has been issued with new Instructions relating to its budget-setting process to ensure financial stability in light of current challenges.

They have come from the Improvement and Assurance Board (IAB), which has been working with the authority for the past three years.

Like many others across the country, the council is facing significant pressures on its budget due to the cost of increased demand for children’s and adults’ social care and rising homelessness, which are major factors in an overspend of £23m forecast in the current financial year and a funding gap of £50m in 2024/25.

Following recent confirmation of the Local Government Financial Settlement, discussions are continuing with the Government about Exceptional Financial Support of up to £40m to address the budget gap for 2024/25 and up to £25m for the overspend forecast this year.

Exceptional Financial Support, if granted, does not represent new money or a grant, it would be likely to come in the form of capitalisation which would allow the council to use money from asset sales to deal with revenue pressures.

The new Instructions seek to maximise the number of savings options brought forward as part of the budget-setting process in order to minimise the amount required by the council in Exceptional Financial Support from Government.

The authority has a legal duty to comply with the new Instructions and savings proposals will be brought forward by officers for discussion by councillors at the council’s upcoming budget meeting. 

The significant number of responses received as part of the extensive consultation on these proposals will provide valuable insight which will help to shape implementation and mitigate negative impact as much as possible within the terms of the new Instructions.

The new Instructions from the IAB are set out below:


NCC faces current and serious financial governance challenges, not least the scale of its projected budgetary deficits for 2024/25. The linked ‘minded to’ decision by Government to appoint Commissioners possibly by early February (if the decision is confirmed) coincides with a critical period for NCC in its financial planning leading up to the full Council’s budget setting meeting on 26th February. In these circumstances the IAB have decided there is a need for IAB expectations to be absolutely clear to the Council leadership in the period up to the full budget setting council and to assist smooth transition to Commissioners during that period is if that comes to pass.

Depending on the precise appointment date of Commissioners – if the ‘minded to’ decision is confirmed – the IAB if still in place may decide to issue further instructions in relation to management of the budget setting council meeting

New Finance Instruction(s) for NCC – effective from 25th January 2024

Flowing directly from the existing instructions – namely, ‘2.1,Approval of wholly realistic plans and budgets’ and ‘2.2, Establish and Maintain a sound and prudent reserves policy and practice’ – the IAB further instruct NCC as follows:

  1. The s151 officer, after consultation with the Chief Executive and fellow Corporate Directors, shall present his best professional view on a draft budget for 2024/25 in line with normally expected professional standards but which in particular maximises the level of savings options that Corporate Directors believe can be delivered and thus quantifies the minimum budget imbalance relying on the bid to Government for ‘Exceptional Financial Support’
  2. Subject only to any professionally required changes determined by the s151 officer, the draft budget for 2024/25 as defined in 1 above, shall be presented and recommended to the Full budget-setting Council meeting for its approval.