Nottingham City Council 'must act quickly' over finances

The report found the council's finances had been out of control for the past four years

Nottingham City Council has been told by the government it must "act quickly" to turn around its poor finances.

The authority was the subject of a rapid review after the collapse of its company Robin Hood Energy.

Details of the review, which warned the council risked bankruptcy without a bailout, were leaked earlier this month.

Local government secretary Robert Jenrick has chosen an expert panel to help address the council's failures.

'Warnings'

The independent investigation, which has now been formally published, was set up by the Ministry of Housing, Communities and Local Government.

It found the council could not afford to approve a legally-required budget for 2021-22, after the energy company collapsed in September.

The review team found the council's financial strategy and commercial investment decisions over the past four years "have resulted in a very significant budget gap and low levels of reserves".

It said the council "failed to act on warnings" to manage their budgets and criticised the use of councillors on the boards of its companies without sector-specific knowledge, which it said led to huge debts.

The city council sold Robin Hood Energy to British Gas in September

Mr Jenrick said: "Taxpayers and residents have been let down by years of disgraceful mismanagement and inept ventures such as Robin Hood Energy, that have wasted tens of millions of pounds that should be being spent on public services.

"The council has a window in which to demonstrate that it is capable of running the city and turning the situation it has created around.

"Given the scale of the changes needed, it is vital that the council act quickly for the benefit of the communities they serve."

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The government report did, however, say it was "impressed" with the current leadership's commitment to tackling the problems.

It put together a set of measures for the council to improve which includes producing a three-year recovery plan by the end of January to plug a hole of between £53m and £64m by 2023-24.

It also advised changing its "structures, culture and mechanisms at member and officer level" and submitting regular progress reports.

If the Labour-run council fails to approve a legally-required budget for 2021-22, it would have to effectively declare itself bankrupt.

This would mean a freeze on non-essential spending, putting thousands of jobs at risk.

Council leader David Mellen said he was determined to stabilise the authority's finances

Nottingham City Council said it "fully accepts" the review's findings and is "committed" to addressing the issues.

Leader David Mellen said he was determined to stabilise the council's long-term finances and had put together an action plan.

"I will never shrink from tackling the big issues on behalf of residents and my determination is stronger than ever," he added.

"This latest report, triggered by the Robin Hood Energy issue, has served to strengthen my resolve, and I want to assure the people of Nottingham that under my leadership, we will always aim to work with integrity, listening to those who elected us."