Some councillors ‘may not have grasped’ scale of city’s financial crisis – auditor

REPORT SAYS THINGS MUST CHANGE AT COUNCIL

THE company inspecting Nottingham City Council’s accounts says some elected members “may not have fully grasped” the severity of its financial crisis.

A report by Grant Thornton calls for “fundamental change” to how the council operates after it effectively declared bankruptcy last year.

Finding even more savings and reforming its services are among the recommendations from its auditor.

A council’s auditor would not usually issue such legal notices, but Grant Thornton says the “serious nature” of Nottingham’s financial issues has forced it to, and that it may take further action.

The council responded to the legal notice by saying that it recognised the “urgency” needed to find further savings.

Although recent Government support effectively filled the council’s financial gap for the coming year, its overall budget gap until 2028 was previously estimated at £172m.

The authority has confirmed that it will be proposing further cuts on top of those already planned and will provide an update in June.

Savings already planned range from the cutting of hundreds of jobs to the closure of care homes and parks.

As well issuing a report making recommendations, Grant Thornton has the power to apply for a court order stating that the council’s accounts are partially unlawful.

It can also give the public the chance to raise questions and objections in relation to the accounts.

Grant Thornton has warned that it may need to consider such further steps if the council does not address its current issues.

The company’s report says: “Fundamental change to the council’s operating base is required to ensure that it is on a firm financial footing and can live within the resources available to be deployed.

“The council will need to both transform the way in which it delivers its services and what it is able to deliver.”

The report comes ahead of a crucial budget meeting at the Council House today at which councillors are being asked to give final approval for a series of brutal budget cuts.

Although the council’s legal duty is to set a balanced budget for the coming financial year, beginning in April, councillors have said they are taking legal advice due to their continued opposition to many of the planned cuts.

It therefore remains possible that despite the council’s legal duty and an instruction from Government officials earlier this year, some Labour councillors may choose to vote against the budget.

Such a situation leads Grant Thornton to say in its report: “The current challenges in setting a lawful budget for 2024/25 suggest that some members may not have fully grasped the severity of the council’s financial position.”

Grant Thornton’s report is also being discussed at today’s meeting, before which the council said it had accepted the recommendations

Grant Thornton has also revealed that its level of concern about Nottingham’s finances last year meant that it wrote to the council’s chief executive Mel Barrett saying the council was likely to exceed the resources it had available. That situation was confirmed when the council issued a Section 114 notice weeks later.