Conservative chancellor Rishi Sunak says it is only "right" Nottingham City Council is held accountable for the financial failures of the past. However Boris Johnson's chief financial minister refused to admit successive Government's had slashed cash injections for local authorities over the past decade to the detriment of cities such as Nottingham.
Local authorities across the country have been grappling with "unprecedented" financial pressures, the Institute for Fiscal Studies says, particularly as demand on services such as adult social care continues to rise due to an ever-aging population. Government grant money had been the primary source of income for these services until around 2010, when cash injections were cut and continue to be slashed to this day.
In Nottingham the council receives roughly £100m less every year, which equates to around £427 per person. Successive Conservative Governments have placed income generation more so in the laps of councils ever since, and the primary source to fill this gap is through council tax hikes.
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Roughly 80% of Nottingham's properties, however, are in tax bands A and B, which rake in less cash due to their smaller size, meaning the city now struggles to get as much income out of this compared to other cities with a larger urban conurbation. Combine these challenging circumstances with the council's own financial failures including Robin Hood Energy which cost £38m, the £9m lost in the rubble of the Broadmarsh and the most recent mismanagement of the Housing Revenue Account, and the result is a very precarious situation.
While Mr Sunak was in Nottingham, visiting Boots' HQ to discuss the economy, Nottinghamshire Live sat down with the chancellor for an interview. He was quizzed on the dwindling cash for councils and asked to provide a message to Nottingham's residents as children's centres, libraries and youth services face the axe due to the city's severe financial constraints.
Mr Sunak argued funding for councils, while evidently in significant decline for over a decade, has this year started to rise. He said: "The first thing people should know is the local council will have almost eight percent more money to spend this year than it did last year and that is about £300m.
"It is going up in Nottingham a bit more actually than the average elsewhere In England. That's the first thing in terms of how much money do we have locally, so people trying to say there isn't well actually it is going up a lot, eight percent."
Funding for local government is just one side to the story, however, and the city council wouldn't have been placed under the scrutiny of an independent Improvement and Assurances Board if its own handling of finances and governance had been all rosy. Upon the collapse of Robin Hood Energy a public interest report was conducted, with investigators accusing the council of "institutional blindness" and discovering a workplace marred by poor governance, severely lacking financial risk controls and a negative culture.
So far the council has managed to appease the board, which reports back to the Government's Department for Levelling Up, Housing and Communities, after it finally published its medium-term financial plan after a worrying delay. This plan sets out how it is to balance its books, now a legal duty, over the next four years.
If it fails to keep those who are watching happy, Government commissioners could be sent in to take control. This outcome perhaps looked more likely recently after it was discovered millions of pounds intended for council tenants had been incorrectly, and £15m unlawfully, transferred to help finance the council's general services.
Patience is therefore wearing thin among the taxpayers, the improvement board and the Government. As such the chancellor was asked for his thoughts on the matter.
"Local people will rightly be angry at the mismanagement of their money by previous decisions and that was the well-documented failure of the council with Robin Hood Energy, costing millions, but also I think more recent problems have emerged in terms of how the council has been using their housing money," he added. "And it is absolutely right given that the Department is engaged intensively with the local council to improve those things.
"[Taxpayers] should be reassured in the same way that we are funding local government everywhere, there is going to be almost eight percent more money that is going to be able to be spent this year compared to last year, and that is more than it is elsewhere and they should know the Government is working intensively with the council to fix some of the failures of the past. It is right people are held accountable for those failures because the people of Nottingham deserve better."
