Nottingham City Council would need to put council tax up by 46 per cent – or get a 70 per cent boost in funding from the Government to continue operating as it is, a new report says.
Managers at the authority are not always present because of hybrid working and policies are being reviewed to make them more accessible.
The verdict comes from a team of commissioners – Government-appointed experts – who were first sent in to help run the Labour-run council in February, just months after it declared effective bankruptcy towards the end of 2023.
The authority has announced a raft of further savings for the next financial year, which begins April 2025, as it faces a £69m black hole in its budget. Over the next three years the budget gap is expected to reach a total of £172m.
Commissioners Tony McArdle, Sharon Kemp and Margaret Lee, published their first report on the progress the council has made to becoming financially sustainable on Thursday (December 12).
They note they have established “a firm, cooperative working relationship with the council”, but emphasise the challenge the authority is facing “cannot be overestimated”.
“The council is operating considerably beyond its means,” the report says.
“Notwithstanding that financial challenges face the sector as a whole, it is sobering to reflect that in order to continue operating as it has done, the council would require a 70 per cent uplift in Government grant funding.
“Alternatively, it would need to raise council tax by 46 per cent. Such impossible solutions must be avoided, and they can be.”
The report reveals while councillors and officers are “very committed and highly capable”, the commissioners have not found a unified organisation with a sense of shared purpose.
They say senior managers are not always present, and the council’s hybrid working policy is being reviewed to make managers more accessible as a result.
“We have seen many examples of systems and processes for decision making and service operation which are neither effective nor efficient,” the report adds.
“Most worryingly, we find a constant requirement to seek ‘permission’ or ‘clearance’ from multiple sources before a matter can progress. This endless checking and rechecking of whether something is ‘good to go’ saps energy, depresses initiative and delays improvements.”
The report further highlights the council’s IT systems, and how they are used, are “problematic”.
Artificial Intelligence (AI) will be better used to combat some problems, including to intervene earlier in social care cases “as a means for reducing demand”.
The report concludes the setting of the 2025/26 budget over the next few months will be the hardest it has ever been, adding: “It requires rapid modernisation of its service operations and the taking of difficult decisions to bring this about.
“It requires thorough application of better working methods and the systems for supporting these.
“It requires debt to be paid down through rationalisation of its estate and the sale of surplus assets. ”
In a joint statement council leader Cllr Neghat Khan (Lab) and Chief Executive Sajeeda Rose said: “The fact that commissioners have so far not needed to use any of the powers they have available with the full council to make change clearly demonstrates that they feel we are heading in the right direction and that we understand what needs to be done.
“But we are under no illusions about the challenges ahead, in particular that we are operating considerably beyond our means.
“Our budget proposals for next year and our ongoing Improvement Plan will give the council financial sustainability for the years ahead, ensuring we put our house in order and get the basics right.”
Jim McMahon, Minister of State for Local Government and English Devolution, added: “The road to financial recovery must be met with the seriousness it deserves, and I am pleased to see a clear commitment to move to a new operating model.
“Because of the scale of the challenge in Nottingham it is self-evident that there will still be difficult decisions to come.
“It is essential that in making these decisions there is a clear strategy for the form the Council will take as its new operating model, and that prevention and reform of local public services is central to it.”
He added the Government will be providing an immediate national funding injection worth over £4 billion, including a £600 million Recovery Grant, which will be distributed to places with greater need and demand for services, as part of the annual financial settlement.
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