Cuts to public services at Nottingham City Council amongst highest in UK

Cash-strapped Nottingham City Council is planning to make a greater cut to public services than most other authorities in the United Kingdom, as it attempts to balance the books.

An investigation of 190 councils by the BBC’s Shared Data Unit found Nottingham was ranked fifth nationally for planning the highest amount of savings as a proportion of its net budget this year.

Its £36.9m schedule of savings amounts to 14.1 per cent of its annual net budget.

This is greater than neighbouring councils, including Derby (5.7 per cent), Derbyshire (2.4 per cent), Leicester (1.7 per cent) and Leicestershire (2.4 per cent).

Nottinghamshire County Council did not respond to the BBC’s data request.

Inflation, the National Living Wage and energy costs have placed further pressure on council finances, which have seen £15 billion in Government funding slashed from national budgets between 2010 and 2020.

Cllr Audra Wynter, city council deputy leader and portfolio holder for finance, said: “We are operating in a very volatile economic climate, with inflation, rising energy and fuel costs and an increased demand on our services driven in part by the cost-of-living crisis, all combining to make budget-setting extremely difficult.

“This is on top of the reduction in core Government funding over recent years placing an increased reliance on council tax for income, which creates a particular problem for places like Nottingham, where the predominant property types don’t allow us to raise sufficient funds.

Nottingham has a very low council tax base, with 80 per cent of properties in Band A and B – almost double the national average.

In addition, the main Government grant for the council fell from £126.8m in 2010 to £26.7m this year.

The authority said demand for vital services such as adult social care has increased and now makes up more than a third of the council’s entire budget.

Cllr Wynter added: “There are also issues that led to the appointment of an Improvement and Assurance Board which continue to have an impact on our financial resilience.

“We are having to make difficult decisions about transforming the way we deliver services and doing some things differently to set a balanced and realistic budget over the medium term, and keep the council on a sustainable financial footing.”

In June, auditors Ernst and Young found the authority’s financial management practices are “not fit for purpose” and concluded it had “very serious concerns”.

It comes after Nottingham City Council illegally transferred more than £51m that should have been ringfenced for housing and tenants to the authority’s general fund.

A public interest test is being conducted to decide whether the financial report can be published.

A Government-appointed improvement board is also monitoring the council following the collapse of Robin Hood Energy, which cost the taxpayer in the region of £38m.

As part of the cost-saving measures, Nottingham City Council has agreed to stop collecting waste bins that are put out on the wrong day, cease the Shopmobility scheme that loans wheelchairs and mobility scooters, and mothball council-owned buildings to reduce energy costs, amongst other reductions.

The council’s financial difficulties have been well documented in recent years, however, the authority forecasts it will have cleared any deficit by 2025-26 as a result of the savings, according to the data unit research.

Unison, the Government union, warned some councils would not be able to offer the “legal minimum of care” next year.

Mike Short, head of local government at Unison, said: "Council finances are in the direst of states.

“As the government tightens the squeeze on local budgets, services either vanish or are scaled down dramatically.

"Cash-starved councils have had to go cap in hand to ministers for emergency support or raid already depleted reserves in a desperate attempt to balance the books.

"This is not a sustainable situation.”

A spokesperson for the Department for Levelling Up, Housing and Communities said no decision on funding levels for beyond 2024-25 in England has yet been taken so forecasts of future deficits are “unsupported”.

It added: “Councils in England have benefitted from an increase in Core Spending Power of up to £5.1 billion in 2023-24 compared to the previous year, with almost £60 billion made available for local government overall.

“We are making up to £4.7 billion available for the adult social care system in England in 2024-25 and have also confirmed an uplift to the Revenue Support Grant, whilst setting out a core council tax referendum principle for 2024-25 of three per cent, plus a further two per cent for councils with adult social care responsibilities.”