Nottingham City Council’s finance chief says he is “cautiously optimistic” that the authority will balance its budget this year despite a £1m overspend.
The council says its budget gap for the current financial year, which ends on 31 March, has decreased to just over £1m.
It must set a balanced budget, as required by law, every year.
The Labour-led authority says it is still overspending despite £41m in Exceptional Financial Support (EFS) being used.
EFS is an accounting mechanism that allows the council to use property sales to cover day-to-day costs, something that is not typically permitted except in serious circumstances.
During an Executive Board meeting on Tuesday (11 February), Stuart Fair, the council’s interim director of finance, said: “We’re moving in the right direction.
“I’m cautiously optimistic that we will land, by the year-end, just under budget.”
The council says some of its main problems include escalating costs, particularly due to increased demand for adult and children’s social care services.
Cllr Neghat Khan (Lab), leader of the council, said: “It is really important that we get a grip on our finances.
“Previously, we heard about the overspend of an extra £4.9m. It is good that we have pulled it back down to £1m.
“But £1m is still over. It is good progress, but we need to make sure we go further.”
The Labour-led council’s budget gap for the next financial year, beginning in April 2025, has also been reduced from £69m to £22.5m.
During the meeting, Cllr Linda Woodings, executive member for finance, said the gap had been reduced even further after the Labour Government confirmed it would be giving the council more money in its financial settlement.
Each year, the Government informs councils how much funding they will receive to help run vital services such as social care, homelessness support, housing, bin collections, leisure centres, and more.
The Government announced its provisional financial settlements for councils in December, with Nottingham set to receive more than £30m extra.
Finalised settlements were confirmed at the beginning of February, and the council was informed that it would be receiving even more money than initially set out in its provisional figure.
The council will receive an extra £732,000 to help with employers’ National Insurance contribution increases, alongside an additional £237,000 to support children’s social care costs.
This has further reduced the authority’s budget gap for the year beginning in April 2025 from £23.3m to £22.5m.
The overall cumulative budget gap over the next four years has also fallen from £172m to £56.8m.
Budget papers, which will receive final approval in March, state that the council will again require Exceptional Financial Support of up to £25m for the 2025/26 financial year and up to £10m in 2026/27.
Cllr Khan said it is hoped that the council can achieve a balanced budget without using asset sales after two years, with the help of the Government’s recovery grant and the delivery of further savings.
The authority has proposed a raft of further savings and cuts totalling £24.191m in the four years to 2028/29, with £17.91m to be delivered in 2025/26.
These include reviews of adult social care packages and a number of “back-office” savings, such as reducing team sizes.
It has now been confirmed that council tax will rise again by 4.99 per cent from April.
• Nottingham: Historic bell stolen from war memorial at Arboretum Park
• Nottingham: Man banned for life from keeping animals after punching dog 40 times gets second ban
