The government is minded to send commissioners into Nottingham City Council to manage its decision making and finances. This is in light of mistakes including the misspending of £40m and issues caused by the failure of Robin Hood Energy which is thought to have cost taxpayers £38m.
The idea has not been well received by the Nottingham Labour group, who still maintain that a big part of the local authority's problems stem from Conservative government cuts. They said it would be an 'attack on our local democracy'.
The proposal comes as people in Nottingham have had to put up with rising council tax rates, the proposed closure of libraries, and rents increasing for some living in Nottingham City Homes accommodation. Many people are wondering how things can be made better after continuing bad news on Nottingham's finances and the loss of key services.
Following the collapse of Robin Hood Energy, the local authority is already being monitored by a government-appointed board, chaired by Sir Tony Redmond. In May, it was found up to £40m of ringfenced funding from the Housing Revenue Account (HRA), only to be used on council-owned housing including repairs, was misspent on other services, and the Penn Report found in some cases, the money was used to prop up other council services and to avoid job losses.
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A letter from Kemi Badenoch MP, Minister of State for Equalities, Local Government, Faith and Communities, to Sir Tony Redmond states: "The Secretary of State has carefully considered the findings and recommendations of the independent reports from Richard Penn and the Chartered Institute of Public Finance and Accountancy (CIPFA) regarding the unlawful HRA expenditure, alongside the evidence presented in the latest progress report and assessment of the council's response to the HRA issue. He is satisfied on the basis of the evidence provided that Nottingham City Council is failing to comply with its Best Value duty.
"The 'minded to' decision is not a reflection on the effectiveness of the board in helping the authority to drive forward the necessary improvements, indeed it is clear that the progress that has been made to date would not have been achieved without that support. Despite this progress, more difficult decisions will be required moving forward and the scale of the challenges facing the council cannot be underestimated."
Best Value duty is how a local authority continuously improves in how it functions, including in economy, efficiency and effectiveness. If commissioners do come in, they have the power to do what ever is necessary to make sure the council can deliver its statutory services effectively and efficiently, which includes decision making, finances and hiring and firing statutory officers.
Government is inviting representations from the council on the reports and proposals until July 7, and the people of Nottingham can have their say too if Sir Tony Redmond should be appointed as the lead commissioner. Yet Nottingham Labour group said they were strongly opposed to the idea.
In a statement, Nottingham Labour said: "The appointment of commissioners would be unjustified, and an attack on our local democracy. We will use our opportunity to respond to this proposal from government to ask questions. If it is the case that the government does take this action, this will be based not on what is best for the city, but what is best for the Conservative Party.
"The government cuts to our budgets means that it is more difficult to do everything we want to do to help our communities at this time but we have been fighting for Nottingham and protecting our services against the worst effects of Tory cuts. We made sure that Nottingham City Council - and our amazing staff - were there for you during the Covid crisis and we fought hard to get what we needed for our city to help keep people safe.
"We understand what twelve years of Tory austerity and now the cost of living crisis means to you, because we do not just represent our communities, we are part of them. We will carry on fighting for what Nottingham needs and will still be ready to help with the problems you are facing, or hear your views and hopes for the city."
Nottingham City Council Labour leader David Mellen he is "disappointed" the measures are being minded.
Councillor Mellen said: "The government's decision to appoint commissioners follows our discovery last December that HRA funds had been allocated unlawfully. This was a significant setback but it's important to understand that we brought the matter to light ourselves as part of our work to tighten up our financial and governance arrangements and have already taken swift and direct action to address the issue, including seeking the necessary ministerial direction to pay the money back into the HRA.
"In light of the improvements we have been making, it's clearly disappointing that the HRA issue has led to the government taking the action it has. We understand that it will be a major concern for city residents, council staff, our partners and local businesses but we are committed to working with commissioners on any further improvements we need to make."
Mel Barrett, chief executive of Nottingham City Council, was appointed around 18 months or so ago to take these sort of issues on. He's adamant that progress has been made though despite these measures being planned.
In a statement, Mr Barrett said: "We have been making good progress on our recovery and improvement plan over the last 18 months, working closely with the independent Improvement and Assurance Board appointed by the government to oversee its implementation. We have had a positive relationship with the Board and its chair Sir Tony Redmond.
"Sir Tony's appointment as the lead commissioner therefore provides reassurance and continuity. This, and the fact that commissioners have been appointed for two years rather than the normal three, is recognition of the progress we have already made over the last 18 months."
In all statutory interventions, the cost of commissioners is met by the council. It could cost Nottingham City Council up to £1,200 per day if commissioners are deemed necessary.
In a statement, Ms Badenoch said: "It is important that the council leads their recovery but that it does not lose momentum in making the necessary improvements. Sir Tony Redmond has forged constructive working relationships with the Council leadership and has an intrinsic understanding of the scale and nature of the challenges facing the city.
"I hope it will not be necessary for the commissioners to use these powers, but they must be empowered to do so if they consider that required improvement and reforms are not being delivered. The government does not take these steps lightly and recognises and respects the role of local councils in our communities and our democracy."
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