Today the Nottingham Post / Nottinghamshire Live is calling for action at Nottingham City Council as further revelations of serious financial mismanagement are laid bare. The city had first been alerted to significant failings at the Labour-run authority after the collapse of Robin Hood Energy in 2020, with millions in taxpayer cash thrown at the faltering vanity project. However, recent investigations have uncovered much more.
Castle ward councillor and portfolio holder for finance, Sam Webster, had adamantly argued Robin Hood Energy was a "one-off", but just weeks later this turned out to be far from the case. Two independent reviews claimed millions could have been “systematically taken away from some of its most vulnerable citizens” through a series of payments, spanning several years, between Nottingham City Homes and the council.
This money was intended to benefit council tenants but was instead used to patch budget pressures on other services. Despite the argument it was done for ethical reasons it was deemed £15m of these had been unlawfully spent. The overall scale of these issues could total more than £40m however and there must be consequences for those involved.
Read more: Employees told not to rock the boat at city council
The sorry saga began when Robin Hood Energy (RHE) was founded in 2015, under the leadership of Jon Collins, with ambitious but principled goals: To reduce fuel poverty in the city and take on the 'big six' energy firms such as British Gas. This, as we all know, wasn't to be - and now we are beginning to learn the failures in governance run even deeper.
By 2018/19 RHE had posted losses totalling £23.1m and, in perhaps the council's most controversial move to keep the project afloat, it then purchased £7.5m in shares in its own company which could not be sold or transferred. The issues began to mount when bills were left unpaid.
A sale was soon on the cards and, during this time, a public interest report conducted by Grant Thornton revealed all which had been going on behind the scenes for many years. It was utterly damning with words seldom used.
By September 2020 the council agreed a sale to Centrica, the parent company of British Gas, and 230 staff were soon informed they were to be made redundant. The losses to the taxpayer are estimated to be around £38.1m.
These colossal failings eventually led to the Government appointing an independently-chaired improvement and assurances board and, so far, the council has managed to appease Government ministers with its own plans. Such drastic measures have come at a dear cost and some of the most vulnerable people in our city are set to suffer the most with three treasured libraries and five children's centres facing the axe.
The expertise required for the council to meet its legal duty has also cost hundreds of thousands of pounds. Some external consultants have been charging more than £1,000 per day, for example, and as more stones are upturned we wonder how much more money will be needed to repair the damage done.
It is indeed understood the Conservative Government regimes have, over the past 12 years, been reducing funding paid in the form of grants to local authorities. Nottingham alone has seen grants reduced by £100m a year in favour of councils hiking taxes.
And while we accept this is playing a significant role in the financial challenges faced not only in Nottingham but within other councils across the country too, the recent revelations have left the city and its residents appalled and, quite frankly, tired. It has been argued the mismanagement of funds, which will place even more pressure on the council's pot of money for services, could ultimately be turned into a "positive result".
This continued blindness to the impact on the city's residents is not fair and we deserve better. Just this month Prime Minister Boris Johnson raised the failings at the city council in the House of Commons during Prime Minister's Questions, on the national stage, and turned us into a laughing stock in front of the whole nation.
For how much longer can this really go on?
