Council risks ‘confidence’ crisis after £40m misspend
LEADER SAYS OTHER RING-FENCED GRANTS WILL BE CHECKED
THE leader of Nottingham City Council says one of the biggest risks the Labour-led authority is facing is whether or not there is “confidence” in its own efforts to turn things around.
Concerns have been raised by a Government-appointed improvement board over what else may be uncovered following the revelation up to £40m may have been misspent.
The Department for Levelling Up, Housing and Communities intervened at the city council following a damning report into Robin Hood Energy, the collapse of which cost the taxpayer an estimated £38m.
This intervention saw an independently-chaired improvement board appointed to oversee and scrutinise the council’s road to recovery.
So far the council says the board, chaired by Sir Tony Redmond, had been pleased with the progress.
However, during a scrutiny committee meeting on Wednesday, May 11, it was said one of the biggest risks the authority faces is confidence in its ability to continue this progress amid the discovery of a series of misspends, including £15m which had been ‘unlawfully’ used.
Up to £40m had been transferred from the council’s Housing Revenue Account (HRA), a pot of cash intended to benefit council tenants and housing stock, to the general fund for other services.
“This happened at the detriment of some of the “most vulnerable” in Nottingham and the money must now be paid back.
Councillor Andrew Rule, the Conservative councillor for Clifton West, said: “What, if any, response have you received from the Department for Levelling Up, Housing and Communities in relation to the issues with the HRA and have they given any feedback as to timeframes in terms of repaying the estimated £40m back to the HRA?”
David Mellen, the leader of the council and Dales ward councillor, responded to say: “We’ve received some direct communication and some through Sir Tony that there is a great concern about this, that clearly it is something on top of historical failures or things where we have fallen short. There is a sense of wanting to sort this out as soon as we can.
“We cannot just pay it back, we have to get a licence from the Government to pay it to the HRA, that has to be an accurate amount in pounds and pence in terms of how much should be paid. Yes there is a sense of urgency.”
Councillor Mellen says it is understood the repayment of the money could be done through assets, not just cash. Concerns over how feasible this is have been raised because the general fund is, and historically has been, under growing financial constraints. And so councillor Jane Lakey, Labour for Bulwell, asked what the “biggest risks” are in not achieving the planned transformation. Should the council fail to keep the board and Government appeased, the commissioners may be sent in to take control, something which the Post has already called for amid worsening financial revelations as time goes on. “There is a sense of which the improvement board is saying to us we knew when we came that Robin Hood Energy was the main reason we came because of the failures there and since we have been here we now have two incidents where failures in terms of the ring-fenced HRA have emerged,” councillor Mellen added. “There is a sense of which is there anything else?
“There will be someone looking at other ring-fenced grants to check if they have been spent correctly. The other risk is really about confidence that although we have a strong improvement plan will the council be able to see it through?
“We’ve done that in a number of areas and clearly setting a four-year budget is something that should be seen as an achievement. But now we need to not just set that budget but also keep to that budget and see things through in other areas.”
Although we have a strong improvement plan will the council be able to see it through?
Cllr David Mellen