Nottingham City Council leader mystified by £16m error

Nottingham City Council's finances were already under the watch of a government inspector

The leader of Labour-run Nottingham City Council said he was "mystified" how almost £16m meant for the council's housing stock was misspent.

A total of £15.86m from the Housing Revenue Account - intended for things such as repairs - was instead used for general council services.

The sum has accumulated since 2014-15, it has been revealed.

David Mellen said an inquiry would look at how the mistake had continued for so long without being noticed.

Council leader David Mellen said the mistake was seemingly approved by finance officers missed by auditors

The Housing Revenue Account is strictly ring-fenced for transactions related to council housing landlord functions and cannot be used for other purposes.

Mr Mellen, Labour, told the Local Democracy Reporting Service: "It is not something that has been brought to my attention until fairly recently, and at that point I agreed when questions were not being answered that an external body should be brought in to look into this.

"This mechanism of moving money from one account to the other has seemingly been approved by finance officers and [was] not being picked up by auditors.

"It is mystifying I guess how this could have been signed off by so many people before and it is clearly not the right way to spend that money.

"We know about it, now we need to do something about it and there are questions, and as leader of the council I will make sure we get answers to the questions."

Government inspector

The Housing Revenue Account will now be refunded from General Fund reserves.

The council is already under scrutiny of a government-appointed inspector, who was drafted-in after the authority lost an anticipated £38m due to the failed Robin Hood Energy project.

It also recently moved forward with plans to close two-thirds of its children's centres, in a bid to save £28m.

At the same time, the authority confirmed it was to bring in-house a cash-strapped energy company that needed £17.5m of investment.

Kevin Clarke, leader of the opposition Independent Group on the council, described the news as "outrageous" and said Nottingham's council tenants had missed out.