By Steve Battlemuch, Labour Cllr & Executive Member Nottingham City Council
When Nottingham City Council announced it was issuing a Section 114 notice in November last year there was shock and anger in our city. However, it wasn’t a surprise to Councillors here as we had been briefed for some time that the councils in year overspend was already over £23 million. The decision to issue a S114 notice is the sole responsibility of the Chief Finance Officer, and this restricted all non-essential spend until the end of the financial year.
As background Nottingham has 50 of 55 Labour Councillors and has run the council for many years. No Conservative councillor was elected last May for the first time ever. As a smaller core city we face many challenges. The loss of Revenue Support Grant (RSG) totalling £100 million a year for 10 years has pushed our capacity and services to breaking point already. That yearly loss in RSG equates to approx. 38% of our annual general fund budget. This year our proposed spend on the general fund was circa £262 million. Almost two thirds of this goes on adult and children’s services, so every other budget gets squeezed to protect this vital spend.
We have an exceptionally low council tax base, with 80% of properties in band A & B, due to the tight boundaries of the city. Nottingham is a core hub for jobs and has an excellent cultural offer which brings in thousands of ‘visitors’ from the many smaller district councils that surround our city. Nottingham council tax payers cover the costs of the city centre cultural offer, the excellent public transport system and keeping the streets clean and safe via our community protection officers. None of the funding for this comes from the council tax payers in the surrounding districts.
Back to the S114 – last March we passed a balanced budget for 23/24 and had a 4-year Medium Term Financial Plan (MTFP). So how after a couple of months in 2023 did it unravel? Basically increased demand and costs, particularly on adult and children’s social care, alongside a rise in homelessness sent our figures into a spiral. Questions need to be asked about the forecasting too but that is secondary to the increased costs.
The council has had an Improvement & Assurance Board (IAB) in place for almost 3 years. Questions should certainly be asked about their role given that they oversaw this failing. It’s a terrible irony that a council facing financial constraints must pay probably over £500,000 for their direct costs. Many would rightly question if this constituted ‘value for money’. They are now highly likely to be replaced by full blown commissioners after Gove said he was ‘minded to’ replace the IAB with them. The fact he said this in December, and we still do not know if or when they are coming shows the contempt they hold our council in. A parting gift from the IAB was an instruction that the final budget for 24/25 was now under the sole gift of the chief finance officer, thereby in effect bypassing elected councillors even before the expected arrival of commissioners.
We face a shortfall for 24/25 of more than £50 million. A claim for exceptional financial support (EFS) has been submitted but again nothing has been received back yet from DHLUC. The proposed cuts package which went to consultation in December was the worst anyone can remember here. The most draconian cuts came directly from officers without political backing from councillors. This is unprecedented. The ray of hope of the extra funding announced last week evaporated quickly once we realised that our share amounting to around £3 million would most likely be deducted from the claim for EFS meaning we cannot use it to offset any of the dreadful officer proposed cuts. Given that the EFS (if granted) is only an agreement for us to use asset sales or borrowing to cover the money, it makes it even more unacceptable that we can’t use the extra £3 million against some of the cuts.
People in Nottingham are rightly angry at the prospect of further drastic cuts to services which will include threats to libraries, community centres, care homes, cultural grants, ward-based grants, cuts to community protection officers and much more. 5000 people responded to the consultation which is 10 times higher than any previous consultation. We now face the prospect of councillors being forced under legal threat to endorse a budget at the council meeting in February that they have not drawn up. This isn’t local democracy. It’s government dictat.
Is Gove listening to any of this? We suspect he’s only listening to Tory MP Ben Bradley who moonlights as an MP and also leader of Nottinghamshire County Council. It suits 2 jobs Ben who is currently campaigning for a 3rd job as East Midlands Mayor (election in May) to see these cuts in the city as he seeks to discredit Labour locally to enhance his chances in that election. Hopefully Nottingham people and the wider Notts/Derbys electorate will see through his wheeze and stop his power grab by electing Claire Ward as Mayor in May.
We know we are not the only council facing these issues. 5 others have a S114 in place and up to 10 are seriously considering or have asked for EFS. All will struggle to balance their budgets this spring.
The future of local democracy is bleak if we are at the point that councillors have no real say over the budget but are expected to vote for it. What happens in our March council meeting is yet to be decided. Watch this space.
Help Nottingham Fight Conservative Cuts
Pressure on Michael Gove has been ramped up with the launch of a petition by concerned groups in the city. Nottingham Labour supports the demands here Petition: No to Nottingham Cuts – Action Network – this statement sums it up well “ We call upon the government to provide immediate no-strings financial assistance to enable the council, in partnership with local people and organisations, to find a sustainable way forward.”