Inspector could recommend big council changes
PREVIOUS PROBE LED TO AN AUTHORITY BEING DISMANTLED
A “RAPID” Government inspection into the financial situation and governance issues at Nottingham City Council could recommend full root and branch change.
The inspector in charge lead a previous probe which ended in a council being dismantled.
Government inspectors began investigating the Labour-run city council at the start of the month, and are expected to make recommendations to the council and the Government at the start of December.
It comes after the collapse of Robin Hood Energy, with expected losses to the council understood to be around £38 million.
A highly critical external report into the handling of the energy company – which has now been sold to the owners of British Gas – found there had been significant governance failures, and not enough scrutiny of how money was being spent.
The Government inspectors’ report, which is expected to be made public, could recommend that a Best Value Inspection (BVI) – one of the most serious measures available to the Government – be carried out.
When that happened in Northamptonshire, it resulted in the entire council being effectively dismantled.
Nottingham’s review is being carried out by lead inspector Max Caller, who was the same lead inspector in the Northamptonshire review in 2018.
The eventual outcome was that Northamptonshire County Council was broken up and split into two smaller authorities.
Now, the Government inspection is due to be discussed by councillors at a meeting next week.
A council update, which will be discussed by councillors on Friday, says that Mr Caller had made clear to the leaders of the council that he had been asked to recommend actions to the Government, and that a BVI could be a requirement.
The update states the review will look at governance, culture and leadership, financial stability, services and the capability to improve.
On the potential outcomes, the update states: “Max Caller formally met with the political leadership of the council and the chief executive to launch the review.
“During this launch meeting, he made it clear that he and the team have been brought in to provide recommendations to the Secretary of State.
“He outlined that a range of different outcomes may arise from the review, ranging from an agreed improvement plan to a requirement for a BVI to be carried out.”
It also states: “The Ministry of Housing Communities and Local Government identified specific questions that they would like the reviewers to ask, exploring the council’s financial sustainability and their management of commercial risk:
“What level of confidence can the department (MHCLG) have in the Council’s assessment of its financial position, particularly its estimate of their budget gap, for 2020/21 and 2021/22?
“What level of confidence can the department have on the council’s plan to mitigate pressures; including the delivery of necessary savings, the existing resources that can be deployed, and their ability to afford borrowing?
“What is your view of the council’s assessment of future financial risks and adequacy of their plan (or ability to plan), to manage those risks?
“What is your view of the council’s approach to mitigating its budget gap under different scenarios for how much financial support is provided?
“What level of confidence can the department have on the council’s assessment of wholly-owned companies, including the viability of companies to continue without any additional council funding or loans?
“How robust are any forwardlooking commercial strategies/plans and their longer-term approach to borrowing and investment?
“Does the council’s oversight and management of commercial and investment risk feel adequate or fit for purpose?”