Improvement board 'disappointed throughout term of office' with Nottingham City Council

The Improvement and Assurances Board (IAB) was appointed by the Government three years ago following the collapse of council-run Robin Hood Energy.

It is now leaving as commissioners are instead taking over to try to improve the authority’s stricken finances.

The IAB’s final report was published on May 16.

While it acknowledges the sector-wide cost pressures in local government, which have been affecting adult social care, children’s services and homelessness in particular, the report says Nottingham’s position is ‘made much worse by its failure’.

It concluded: “The IAB has been disappointed throughout its term of office at the pace of change in Nottingham.

The report highlights some ‘encouraging advances’, including improving risk awareness, companies governance and its finances.

It commends the generation of a significant level of savings of £35m between 2023-24 and 2024-25 to help bridge budget gaps of £28m and £50m respectively through reviews of its spending practices.

Yet, the IAB says the council has still been forced to rely on Government exceptional financial support, which has allowed it to apply £41m-worth of its own capital resources to set a ‘technically’ balanced budget for 2024-25.

This still leaves the authority with a total gap of £172m over the next four years and, as a result, ‘the council will need to put in place, urgently, a revised financial planning methodology’.

Upon the appointment of the IAB, the Labour-run council also adopted a ‘voluntary debt reduction policy’.

It was recognised debt was too high and the council decided to cease all borrowing for capital investments.

Its overall debt figure, known as its capital financing fequirement (CFR), was £1.4bn in 2020-21.

In March last year this had reduced to £1.3bn and was forecast to decrease by £66.3 million to £1.249bn by the end of March 2024.

The IAB says the decision to adopt the policy was the ‘right one’ and said it has been sensible in this area.

In other areas such as companies governance the report notes there has been ‘a substantial de-risking of the portfolio of companies and improvement in their governance’.

The operations of Enviroenergy, Nottingham Revenues and Benefits and Nottingham City Homes have been brought back in-house and the sale of construction firm Thomas Bow has been completed.

But the report says the council ‘still faces a number of large and complex commercial issues’ and that there has been ‘significant slippage in achieving fundamental change’.

The report also highlighted further issues in human resources, including the fact it says the workforce has more than 500 people more than comparable authorities.

It concluded: “The council’s financial position remains a very serious one, with significant shortcomings in budgetary control and the underlying level of spend, despite progress with the financial improvement programme.”

A council spokesperson said: “The IAB’s final report has informed the council’s work with commissioners on the further improvements that are needed in order to build on the progress already made.”