Government could intervene at Nottingham City Council within days

Nottingham City Council say reduced government funding and soaring demand and costs for social care have contributed to its financial woes

Government-appointed commissioners could take over the running of "bankrupt" Nottingham City Council within days.

An improvement board overseeing changes at the authority said intervention could arrive by "early February".

The Department for Levelling Up, Housing and Communities said in December it was "minded to" appoint commissioners to speed up improvements.

The Labour-run authority has appealed against the decision.

The city council issued a section 114 notice in November, effectively declaring bankruptcy, amid an in-year budget gap of £23m.

A separate budget gap, totalling £53m, for the year beginning April 2024, has also led to plans for a series of sweeping cuts to youth services, funding for community organisations, and public transport infrastructure.

Extra financial support, for £25m for the current year and up to £40m for the next, has also been requested as an emergency response to the situation.

Support will not be given as a grant, but as a combination of loans and money raised from council assets.

'Critical period'

The Improvement and Assurance Board (IAB), appointed three years ago by the government upon the collapse of council-run Robin Hood Energy, issued a series of new instructions, announced on Wednesday.

They seek to "maximise the number of savings options" to minimise the required financial support from government, said the Local Democracy Reporting Service.

The board's instructions said: "The linked 'minded to' decision by government to appoint commissioners possibly by early February, if the decision is confirmed, coincides with a critical period for NCC in its financial planning leading up to the full council's budget setting meeting on 26 February.

"In these circumstances the IAB have decided there is a need for IAB expectations to be absolutely clear to the council leadership in the period up to the full budget setting council, and to assist smooth transition to commissioners during that period is if that comes to pass.

"Depending on the precise appointment date of commissioners, if the 'minded to' decision is confirmed, the IAB if still in place may decide to issue further instructions in relation to management of the budget setting council meeting."

Addressing the IAB's instruction, Nottingham City Council leader David Mellen said he was "disappointed", adding this would give councillors "no flexibility".

A petition, organised by group Resolve, has called on Levelling Up Secretary Michael Gove to adequately fund vital services.

Analysis

By Hugh Casswell, BBC Nottingham political reporter

There's a tug of war going on over the city council's finances - how much of the budget gap should be filled by cuts and how much should come from selling assets?

Labour councillors are pushing for less of the former and more of the latter.

But the new instructions from the Improvement Board - to maximise savings - effectively take it out of councillors' hands.

It's for that reason some in the council feel they already have commissioners in place in all but name and democracy is being trampled on, though critics will say it's a mess of their own making.

Recent meetings have seen grave concerns expressed about the impact of the proposed cuts, but while nothing is confirmed yet, it feels increasingly unlikely any of them will be stopped.