Government commissioners appointed to run 'bankrupt' Nottingham City Council

A Government-appointed board has overseen changes at the council since the collapse of council firm Robin Hood Energy in 2020. Credit: ITV News Central

The Government has appointed commissioners to run Nottingham City Council, after the authority declared itself effectively bankrupt.

The Labour-run authority issued a section 114 notice on 29 November 2023, after revealing it was set for a £23million overspend before the end of the financial year.

A Government-appointed board has overseen changes at the council since the collapse of council firm Robin Hood Energy in 2020, which cost the taxpayer an estimated £38million.

The Government had previously said it was 'minded' to send in the commissioners after investigations uncovered almost £40million had been wrongfully moved out of the Housing Revenue Account.

Local Government minister, Simon Hoare MP, confirmed three commissioners would be appointed - lead commissioner, a commissioner for finance and a commissioner for transformation.

He said: "The Secretary of State is satisfied that Nottingham City Council is continuing to fail to comply with its Best Value Duty, and that the necessary improvements are still not being made quickly enough.

"I am today confirming that commissioners have been appointed to Nottingham City Council and new directions have been issued."

The commissioners have been appointed for two years and will work alongside the existing structure of the council, with all officers, elected officials and the leader, David Mellen, remaining in place.

A report discussed at an Executive Board meeting in November 2023 highlighted that a significant gap remained in the authority’s budget, due to issues including an increased demand for children’s and adults’ social care, a rising number of rough sleepers and the impact of inflation.

The council said it has "sufficient financial resources to meet all of its current obligations, to continue to pay staff, suppliers and grant recipients in this year."

An extensive budget savings package which the council says will have a significant impact on local services, is due to be decided on by councillors at a meeting on 4 March 2024.

In response to the Government appointments, Councillor David Mellen, Leader of the Council, said: “Our preferred option was to continue to work with the Improvement and Assurance Board which has been overseeing improvements at the council since 2021.

“We feel that significant progress was being made across the council. However, we are committed to working constructively and collaboratively with the Commissioners to tackle Nottingham’s current challenges.”

Mel Barrett, the council’s Chief Executive, said: “The council is committed to working in collaboration with the Commissioners to continue our improvement journey at pace, reshaping the organisation to put the authority on a stable financial footing, while delivering essential services for Nottingham residents within the resources that we have.

“Our wider transformation work is already well under way and the expert input and challenge from the Commissioners will be invaluable to our officers and councillors as they look to accelerate that process further.”

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