A meeting has been scheduled before Christmas for councillors to discuss Nottingham City Council’s effective bankruptcy.
On November 29 the authority’s chief finance and Section 151 officer Ross Brown, issued a Section 114 notice having determined the council would not be able to set a balanced budget this year.
A £23m overspend had been forecast, having already been reduced from £57m before a whole host of corrective actions and savings.
Once a Section 114 notice is issued, councillors are required to meet within 21 days to consider Mr Brown’s report and decide what actions are intended.
Until all councillors have met, all new further expenditure must stop.
Mr Brown has initiated and will chair a ‘Spend Control Board’ that will review all requests for spending.
“Further spend control measures are likely to be implemented following the meeting of all councillors which will then remain in place until lifted by the Section 151 Officer, ” the council says.
“It should be expected that these will remain in place for the foreseeable future.”
The Full Council meeting to discuss the report will take place on December 18 at 6 pm at the Council House.
The Labour-run council said the Covid pandemic, inflationary pressures, and soaring demand for costly social care and homelessness support accounted for over 80 per cent of the budget gap.
Government funding cuts, amounting to £100m a year over the last decade, were also blamed.
However council leader Cllr David Mellen (Lab) admitted past mistakes had played a part in leaving the authority less financially resilient.
The collapse of council-run Robin Hood Energy, which resulted in the appointment of an improvement board, cost taxpayers’ £38m.
In 2021, chief finance officer Clive Heaphy uncovered millions of pounds intended for council homes and tenants had been unlawfully transferred from the Housing Revenue Account.
The cost of this is estimated to be in the region of £51m.
Millions of pounds have also been lost amid the collapse of shopping centre giant intu, which had been in the process of regenerating the Broad Marsh Centre.
The council had invested £17m in the regeneration scheme before intu’s collapse.
Millions were further lost in Nottingham Castle, after the trust overseeing its reopening was liquidated.
Going forward, money can continue to be spent on existing staff and payroll costs, goods and services which have already been received, and contractual commitments, the council says.
However, problems have been encountered in the days since the issuing of Section 114.
During a Schools Forum meeting on Tuesday, December 5, education director Nick Lee issued reassurance to schools and staff who had been hit with delays.
He said some staff had encountered issues in getting sign-off for travel to jobs.
In a letter to suppliers and grant holders, the council’s chief finance officer sought to quash any concerns.
He said: “I want to reassure you that all suppliers with a formal contract and grant to supply goods, services or works to Nottingham City Council will continue to be paid in line with the terms of the agreement.
“If you require further information about this, then please contact the council officer who manages your contract or grant.”
The letter added all invoices must now be sent directly to a third-party scanning provider, not the council’s own services.