Nottingham's Labour council has sought to explain just why it has been paying significant sums of cash to experts and consultants as it looks to meet its legal duty to balance its books. A Conservative councillor however argues it "just shows the level of financial cost the Labour group has brought on the council".
The council recently set aside up to £100,000 to pay for an extension of the role of corporate director of finance, which belongs to Clive Heaphy. Mr Heaphy is also the council's section 151 officer, a legally-required role through which the proper administration of finances is conducted.
This extension, to June 30 this year, comes on top of a £139,000 sum paid between April 1 and September 31 2021, and additional £134,000 granted for an extension to the post between October 1, 2021 to March 31, 2022. It brings the total which could be paid out for a single role in just over a year to £373,000.
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Mr Heaphy is not the only external consultant being paid such sums, either. An external financial consultant has been paid £110,000 for five months work, while the interim director for transformation and improvement, Richard Grice, is being paid more than £1,000 per day over a 132-day period.
Furthermore, just recently council documents also revealed the council is gearing up to pay more consultants almost £150,000 to give advice on the city's tram network. This comes amid concern over the financial viability of the network when Government support, which has helped prop-up the network throughout the pandemic, comes to an end.
Many of these consultants have been employed as the Government's monitoring of the council, through the independently-chaired Improvement and Assurances Board, continues. Such supervision was required upon the collapse of Robin Hood Energy, and throughout the course of this programme more financial failures have been uncovered.
Such failings only exacerbated financial struggles within the council brought on by decreased funding from central government regimes. Nottingham, for example, receives £100m less a year and therefore must find this cash elsewhere.
'They are a necessary short-term measure to help us move forward'
Explaining why such costly experts are being employed City Council leader and Dales ward councillor, David Mellen, said: "The Government’s non-statutory review of the council places a requirement on the council to improve, with a focus on financial and governance arrangements. We are making good progress on this, but we need external expertise at this early stage of our transformation, with changes required at pace.
“We made a request to Government for capitalisation, allowing us to borrow up to £20m against capital assets, which has helped us to create a transformation reserve. Some of this reserve money is being used to appoint external experts and set up new business support and customer service arrangements to drive the transformation activity that’s been identified is needed at the council. This does not impact on our budgets for running day to day services."
As part of the ongoing work to balance its books and create a better working culture the council is also paying £500,000 towards a 'Transformation Academy'. Through this existing staff members are trained to graduate with new skills and it is hoped this will mean less external expertise will be required going forward.
“We have planned and are delivering in-house skills and development programmes aimed at developing new skills in our own staff so that they can pick up the reins and continue to deliver the changes that are needed," Councillor Mellen added.
“There are also posts such as the statutory S151 officer role which are currently filled on an interim basis. There are higher costs involved, including agency fees, when appointing temporary staff, and we are working towards making permanent appointments as soon as possible.
“We understand that these costs are high, when the council is having to make huge savings from its budget. However, they are a necessary short-term measure to help us move forward, while the budget savings will help to place us on a sound financial footing over the long-term."
'It is unacceptable that things have got to this position...but there is no alternative'
So far the council has managed to appease the Government and avoid commissioners. These commissioners, who would cost the taxpayer between £700 and £1,200 per day, would take control of council operations should its own actions be inadequate - as has been seen most recently in Liverpool.
So are these expensive consultants therefore value for money, as to avoid such a costly consequence? Yes and no, argues Andrew Rule, who represents Clifton West for the Conservatives.
Councillor Rule does believe Mr Heaphy in particular is "worth every penny." It was, after all, Mr Heaphy who uncovered the unlawful payments from Nottingham City Homes housing revenue account to its general fund.
The issue had reportedly gone undetected for many years, even through rigorous audits. And, as mentioned, the council has so far managed to avoid any further drastic action despite such failings, with consultants therefore providing sufficient answers to the difficult questions being asked about the council's financial woes.
However councillor Rule added: "It is a shame we cannot get [Mr Heaphy] on the books permanently because he is a troubleshooter. But then you have to ask why did we need a troubleshooter in the first place?"
"This just shows the level of financial cost that the Labour group has brought on the council and they need people with this level of expertise to get them out of the financial situation they have brought on themselves.
"The council has a significant problem at the moment recruiting staff because of the reputation that it has built up following Robin Hood Energy, then you have the £15m that was unlawfully spent, which does not appeal well to professionals coming into the council on a full-time basis.
"And the Tramlink accounts do not make great reading. Their bankers are getting quite concerned about the financial stability. You have therefore got to have some expertise to develop a contingency plan. I've been saying this for many years through budget amendments for the worst-case scenario.
"It is unacceptable that things have got to this position they are in and that we have got to spend this money, but there is no alternative.
"If you do not have the expertise to deliver then you are looking at £1,000 per day for a lead commissioner and a deputy commissioner who charge anywhere between £850 and £900 per day."
