More than £18m was spent on agency staff to fill gaps in Nottingham City Council’s workforce, a new report says.
Auditor Grant Thornton, which has been assessing the authority’s yearly accounts, says it found “significant spending” on temporary staff to make sure roles were filled in critical services and departments.
The financial accounts of public organisations are regularly reviewed by auditors to ensure everything is in order.
Grant Thornton has now published its assessment of the council’s accounts from the year ending March 31, 2024, which highlighted a number of significant weaknesses.
One vulnerability was in workforce planning, with more than £18m spent on temporary staff to fill gaps in job roles.
Around £6.6m was spent on agency staff in people’s services, which includes social care, and £5m to fill gaps in the finance department’s workforce.
There was a large vacancy rate in the finance department, with around 122 vacant posts – or 13 per cent of the entire workforce.
Responding to the concerns, the Labour-run authority has insisted improvements have been made since this financial year.
“Significant weaknesses in respect of workforce planning continued to impact on the capacity and capability available to ensure the council is effective in its core activities of finance and other critical corporate functions, as well as critical areas of statutory services such as social work,” the audit report said.
The previous Conservative Government appointed commissioners to oversee improvements at the council in February last year, just months after it declared itself effectively bankrupt in November 2023.
One of the key reasons for their appointment was an “ineffective culture of budget accountability”.
The auditor acknowledged the council has published a revised medium-term financial plan – which sets out its expected finances between April 2025 and March 2029 – showing improvements.
It had been anticipating a £172m budget gap over this period, but it has managed to reduce this to around £55.5m.
However the auditor says the scale of the gap remains significant, and planning has been hindered in the past by “feelings of confusion and chaos reported by officers”.
“Inconsistencies in budget information, inadequate forecasting, unclear lines of accountability, and poorly communicated reserves policy changes all hindered the process for identifying and managing financial pressure,” the report adds.
“We raise a new key recommendation around the need for collaboration between the central finance team and budget owners for future budget planning and for better holding financial performance to account.”
Responding to the report, the council’s interim director of finance, Stuart Fair, says “marked progress” has been made since the accounts were reviewed.
The authority is now expecting to come in £1.4m under budget in the year ending March 2025, while the expected budget gap for the following year has been reduced from £41m to £22.5m.
Mr Fair said the progress is “certainly not indicative of a council judged to have significant weaknesses” in financial sustainability.
“At this point in time, Nottingham City Council has achieved financial stability, with a sufficiency of reserves and an improving position on actual financial performance,” Mr Fair said.
“Whilst Nottingham City Council is now financially stable, it does not yet possess full financial sustainability. As a corporate leadership team, we fully acknowledge that medium term financial sustainability will only be achieved through the successful delivery of the planned transformational change programme.”
Mr Fair said “significant improvements in the effectiveness of the finance team”, including better working between officers and budget holders, have also been made.
He said the council has repaid £56m of legacy debt in the past nine months, showing positive progress being made in the management of finances.
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