Nottingham taxpayers will foot the bill for thousands of pounds of extra fees and expenses as a Government-appointed improvement board extends its powers over the city council.
The Nottingham authority has been under the watch of an improvement and assurances board, appointed by the Conservative Government, ever since a public interest report into Robin Hood Energy was published in 2020.
The board is independently chaired by Sir Tony Redmond and the council has been required by law to improve its culture and finances ever since.
While the authority recently narrowly avoided Commissioner intervention, whereby external experts costing upwards of £1,000 per day would have been deployed to take control of some council operations, greater powers have been given to Sir Tony and the improvement board as an alternative.
Simon Clarke, who replaced Michael Gove as the Secretary of State for the Department for Levelling Up, Housing and Communities, revised the previous cabinet’s decision to send in Commissioners “in light of representations received that highlighted the close working between the council and the Improvement and Assurance Board and the positive attitude of the council towards the required improvement.”
Instead of the improvement board ‘guiding’ the council, it now has additional powers which will allow it to ‘direct’ the authority.
As such “significant progress” is expected to be made over the next three months before Sir Tony reports back to the Government.
The council must now prepare, agree and amend its improvement plan “to the satisfaction of the Improvement and Assurance Board”.
It must also implement the recommendations contained in previous independent reports by the Local Government Associate Richard Penn and the Chartered Institute of Public Finance and Accountancy (CIPFA).
The reports came upon the discovery of a series of misspends totalling £40m between its Housing Revenue Account (HRA) and the general fund, with some cash intended for council tenants ‘unlawfully’ transferred to the authority’s general fund for other services between 2014/15 and 2019/20.
However, these new powers will come with an additional cost.
The current approved Medium-Term Financial Plan, whereby the council sets out a budget for four years, has designated £300,000 per year to meet the costs of the improvement board for 2022/23 and 2023/24.
But now Government intervention is set to remain in place for longer.
In documents intended for discussion at Full Council on October 31, Debbie Middleton, the council’s interim director of finance, says: “New directions will remain in force until September 1, 2024 unless the Secretary of State decides to revoke or amend them beforehand.
“This time-frame is outside the budgeted provision for the improvement board and therefore an additional cost for the improvement board will be need to be included within the 2023/24 budget and MTFP to include £0.125m (£0.300m pro-rated for 5 months) in 2024/25.”
The council will also be required to pay for the fees and expenses in relation to the additional actions resulting from tighter control. These costs will come on top.
Ms Middleton adds: “This will require a full resource plan and may result in addition costs for temporary staff and consultants over the period of
2022/23 through to 2024/25.
“Any further resourcing which is in addition to the already approved £0.300m budgeted cost will be subject to separate approval processes in line with the council’s constitution.”
Secretary of State Mr Clarke will again consider exercising his powers under
the Local Government Act 1999, including the appointment of Commissioners, in the new year.
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