Nottingham City Council’s budget and four-year financial plan have been tipped for final adoption by councillors after its chief financial officer ruled them “robust” enough to lay grounds for improvement. In December, councillors endorsed £29m of cuts and savings to go forward for consultation in a bid to fill a budget gap for 2023/24 of £32.2m.
To fill the gap, 110 full-time equivalent job roles will be cut alongside other proposals to save money, such as reviewing fees and charges for parking, cremation and burials, leisure centres and cafés, as well as reviewing grants to community groups and cultural organisations and stopping the collection of household bins put out on the wrong day.
In 2023/24, council tax is set to be hiked by the full 4.99 per cent permitted and it has been proposed that council tenants’ rent will increase by seven per cent. The remaining £3.2m gap has now been filled through the use of a better-than-expected settlement from the Government, and no further cuts were required.
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During an Executive Board meeting on February 21, Ross Brown, the council’s director of finance and chief financial officer, said the budget proposals were “robust”. The changes required over a four-year period, however, have left the council with little wiggle room in its reserves and balances, and so the Medium-Term Financial Plan (MFTP) sets out a path to rebuild these reserves.
The council remains under scrutiny from a Government-appointed improvement board, which now has powers to direct if adequate change is not made. Of the budget and four-year plan, Mr Brown said: “I am really conscious of our direction in an improvement perspective. We are facing some very challenging financial circumstances.
“I am offering the council assurance professionally that they are sufficient and appropriate in terms of the direction of travel.” A report prepared by Mr Brown states the economic outlook beyond 2023/24 “remains uncertain in relation to interest rates, inflation and future Government funding”.
He says the council must seek to strengthen its reserves and balances in important areas, such as its General Fund, which is typically used for the running of day-to-day services. General Fund balances are forecast to grow from £14.6m (5.6 per cent) to £17.6m (6.1 per cent) over the four-year period, but this remains below Mr Brown’s recommended 7.5 per cent.
It is however above the recommended five per cent, but it has been advised any underspends are prioritised for use in strengthening General Fund balances. The Financial Resilience Reserve is also forecast to be overcommitted by the end of 2022/23 “given the calls upon it arising in the year, together with the forecast overspend of £13.6m by the year end”.
This will be replenished through the temporary re-purposing of £20m allocated for other earmarked revenue reserves, to be repaid at the earliest opportunity over the next four years. The council will also temporarily be decommissioning a number of capital schemes totalling £22.8 million, including the renewal of the incinerators at Wilford Hill Crematorium.
More than £10m of transformation investment will further “radically change the way the council operates”, the authority says, helping to achieve almost £60m of savings in a bid to meet targets set by the Government. Cllr Adele Williams (Lab), portfolio holder for finance, said: “Sometimes the picture is painted as inevitable… that every year our budget is getting harder and harder to set sustainably.
“But it is not inevitable, it was a choice. If we had a Government that was serious about levelling up our country, rather than a Government whose Prime Minister has boasted from Tunbridge Wells he has undone work that Labour did, in making sure money was put in to hard-pressed, hard-working areas like Nottingham.”
Cllr David Mellen (Lab), leader, added: “This is the penultimate stop on the journey and we take this, what we have agreed today, to Full Council a week on Monday for final sign-off. It is not a budget full of joy, it is not full of things that we used to have in council budgets called ‘developments’, where we were able to put more investment into things, and we are not able to do that in many areas because of our restrictions we are looking at making savings, and increasing income, to make our budget balanced.”
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