Ross Brown CPFA Corporate Director, Finance and Resources and Section 151 Officer for Nottingham City Council issues this report.
Members of the Council are required to consider this report made by me as the Council’s Chief
Finance Officer and s.151 Officer under s.114(3) of the Local Government Finance Act 1988,
because in my professional opinion the expenditure of the authority incurred (including
expenditure it proposes to incur) in the 2023/24 financial year is likely to exceed resources
(including sums borrowed) available to it to meet that expenditure. The purpose of this report
is for me to formally notify the Council that in my opinion the Council is unable to meet its
statutory requirement to deliver a balanced budget for 2023/24.
My reasons for issuing this report are:
• At the end of Period 2 (May 2023) the gross forecast General Fund position was a £28.076m
overspend and a net forecast General Fund position overspend of £25.894m against the
approved net budget for the General Fund in 2023/24 of £261.8m (net 9% adverse variance)
• In June 2023 the Council mobilised a Financial Intervention Strategy to address the in-year
pressures which realised £5.048m of in year reductions
• During the subsequent months, the operating environment and wider economic context
continued to be highly volatile with small changes in demand disproportionately
materialising in large financial pressures, particularly in social care and homelessness
• As these further pressures began to emerge, the Council developed corrective actions up to
the end of October 2023, in response to the issuance of a formal notice of concern by the
CFO (s.151) to the Head of Paid Service which yielded an additional £13.251m of in year
reductions
• In addition to the above, Council considered the appropriateness of the deployment of
service held reserves alongside the release of technical and treasury items. This resulted in
the application of £9.492m, and £5.758m respectively, reducing the gross pressure by a
£15.250m
• At the end of Period 6, the Council was forecasting a gross General Fund pressure of
£56.899m with over 80% of the forecasted pressures being in People’s services.
• The cumulative impact of the one-off in-year management and corrective actions (including
the use of reserves set out above) and the deployment of technical options resulted in a net
forecasted General Fund pressure for the year of £23.351m
• As part of my CFO (s.151) assessment of the Council’s ability to deliver a balanced budget in
year as required under part VIII of the Local Government Finance Act 1988, I have considered
the suitability of deploying further reserves in year. This assessment was undertaken on a
multi-year basis (4-year medium-term financial plan), considered the overall adequacy of
reserves, considered all relevant CIPFA guidance, and an assessment of risk exposure.
I have concluded that it would not be prudent for the Council to act in this way.
