More than £1m will have been spent on a single consultancy firm to help Nottingham City Council draw up and deliver a financial improvement plan. The Labour-run authority has approved spending more than £600,000 on PricewaterhouseCoopers (PwC).
It had already approved a spend of up to £500,000 on the international consulting and auditing firm, to deliver the first phase of a financial improvement plan, just under a year ago. Council documents published on January 27 now say an extra £455,000 is needed to meet the cost of PwC delivering ‘Phase 2A’ of this plan, and a further £157,000 will be reallocated to deliver ‘Phase 2B’.
Just over £44,000 of the total will be spent on PwC’s expenses. It comes just days after the Local Democracy Reporting Service received a response to a Freedom of Information request, which revealed the council has so far spent £5.5m on external consultants.
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The council had spent this sum in the years since the Government appointed an improvement board in 2020, to oversee the authority’s recovery following the collapse of Robin Hood Energy. In the documents the council says: “The initial work order for Phase 1 of PwC work was approved in May 2022, and was focused upon a review of financial performance over the period 2019/20 to 2021/22, and assessing the robustness of 2022/23 budgets, given that the council had incurred substantial year end variances in out-turn compared to budget in successive years that were not reliably forecast.
“An initial diagnostic was also undertaken and identified that improvement work on financial processes was required, covering specific areas, and would be split into two phases. Phase 2A provides analysis of issues and support the council to design the solutions across specific work streams.
“Phase 2B provides support to the council in rolling out and implementing the agreed solutions.” Council leader, Cllr David Mellen (Lab), previously said some of the spending is on short-term, essential support which will improve the authority in the long-term and so provide value for money.
The council cannot borrow any money at present as agreed by the improvement board, however the Government has allowed it to borrow £20m to fund external consultants and other improvement activities. The council’s own assets have been used as security against the sum.
PwC is is considered one of the ‘Big Four’ accounting firms alongside KPMG, Deloitte and EY. It has been working as the council’s ‘strategic delivery partner’, a role which ensures the delivery of savings included in its four-year financial plan and its Together for Nottingham improvement plan.
Its contract as the delivery partner was extended for six weeks towards the end of last year, costing a further £149,000. Council documents add: “It is important to note that PwC will provide critical professional capacity and capability to deliver this work where the council’s own resources are currently deficient.
“A substantial improvement agenda is in development and is focused upon improved data quality within the general ledger and end to end transactional processes. This will include the review and revision of accounting standards, transparent and streamlined budget monitoring and forecasting processes and procedures, and refinement of financial administrative processes.”
Documents say the £157,000 for Phase 2B will come from money which had already been allocated to funding interim finance staff. However the money had not been used for this purpose. It will now be reallocated to financing the required PwC work.
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