Staff said Nottingham City Council used parking fines as 'cash cow'

In interviews, staff said that historically, the council had been "commercially-driven"

A secret report into how Nottingham City Council managed its money revealed staff thought the authority treated the parking and road fines system like a "cash cow".

The Labour-run council was ordered to release an independent assessment into their finances by the Information Commissioner's Office (ICO).

The report also said a £5m grant did not reach the right department.

A city council spokesman says "good progress" has since been made.

The published report comes after the improvement board overseeing changes at the authority said government-appointed commissioners could take over the running of the council within days.

The council declared itself effectively bankrupt, meaning it would stop all spending other than services it must provide by law.

Accounting firm Ernst and Young (EY) was first asked to review its books after unlawful spending from the council's Housing Revenue Account was uncovered in 2021.

Millions of pounds strictly intended for council housing and tenants had been wrongly and unlawfully transferred to the authority's general fund over a series of years, the Local Democracy Reporting Service said.

It is estimated the cost to make amends is about £51m.

The council refused to publish the full report despite numerous requests under the Freedom of Information (FOI) Act, saying there was a need to consider what it described as a technical report for officers in a "safe space".

Nottingham City Council declared itself effectively bankrupt last year

Instead the council only published a 10-page summary.

The Local Democracy Reporting Service appealed against the decision to the ICO, which ruled in favour of publishing the report in January - six months after the initial FOI request was submitted.

The series of documents published on Monday show EY looked at accounts across financial periods 2019 to 2022, and identified "a number of significant concerns within [the council's] control environment".

It investigated six areas including parking, traffic regulation and bus lane enforcement, the Better Care Fund, capital expenditure, the Transforming Cities Fund, the Dedicated Schools Grant and licensing income.

'Management override'

"Four of the six areas were identified as having a medium risk of management override of controls," the report said.

"One area, namely parking, traffic regulation and bus lane enforcement, was identified as having a high risk of management override of controls."

In this area, EY noted from interviews with council staff, that historically the council "has been commercially-driven and set income targets for the enforcement team, contra to the regulatory guidance".

It was said the corporate centre had treated this division as a "cash cow".

The report also said the council received £5m from central government for lost car parking income during the pandemic, but the enforcement team "did not receive any of this money and it is not clear how it was used".

The assessment identified "significant weaknesses" that needed to be addressed, a council spokesperson said

Issues with a lack of audit trails in numerous areas were also found, meaning it was difficult to "demonstrate that these funds are used for the specified purposes".

The report added an overriding "commercially-driven culture" within licensing and traffic enforcement created risks.

Councillor Kevin Clarke, the leader of the Nottingham Independents and Independent Group, said: "It is very damning. You don't even have to read between the lines to see all is not right.

"It shows the culture of the whole council."

A city council spokesperson said: "The council took the view that the full assessment report was of a technical nature designed to support the work of professional officers.

"The information commissioner made clear that the council had legitimate concerns around the disclosure of the full report and that it had engaged the exemption not to publish correctly.

"However they decided that on balance, the public interest outweighed the exemption in this case."

They added the council has been open about the nature and seriousness of the assessment's findings, adding: "Good progress has been made to address the issues raised and through the council's Finance Improvement Plan, reported at every audit committee, to ensure the necessary controls are in place."