Government u-turn as city council escapes commissioner after £40m financial error

A Government commissioner now won’t be appointed to oversee Nottingham City Council, it has emerged.

The Government had previously indicated it was minded to back in June, but will instead strengthen the powers of the independent Improvement and Assurance Board (IAB) currently overseeing progress on improvements at the council.

The decision has been welcomed by the council which sent a formal letter of representation to the Government last month outlining why it believed the current support arrangements in place through the IAB had been “working well” and that its preference was for these to remain in place.

The IAB will now have the power to direct the council in relation to its improvement programme, in addition to offering advice.

The chair of the IAB, Sir Tony Redmond, will be required to provide a formal review of progress in three months’ time which will be considered by the Secretary of State.

The council says that, working with the IAB, it has made “significant progress” on improvements over the last 18 months, including putting in place a medium-term financial plan, reducing debt levels by selling off property assets, carrying out a review of council-owned companies and identifying and responding to issues with unlawful housing revenue misallocation.

The Government’s announcement follows the council’s own discovery – as part of its ongoing improvement work – that it had unlawfully allocated over £40m of Housing Revenue Account (HRA) funds to its General Fund. It says action is being taken to remedy this issue, including placing funds back in the HRA and bringing the council’s housing management function back in-house.

City Council leader, Councillor David Mellen, said: “The decision not to appoint Commissioners shows that our representations about the positive progress we were making with the current Improvement and Assurance Board have been listened to and taken into account by the Government.

“I would like to thank the significant number of partners and stakeholders who wrote to the Government in support of the council and the progress we were making. This was acknowledged by the Secretary of State who said that he wants to offer help not punishment.

“We know there is a lot more work to do but we have demonstrated our determination to address the issues which led to the non-statutory review and I am confident we will continue to work well with the Board to make the progress needed to emerge a better council.”

Chief executive, Mel Barrett said: “We have had a positive relationship with Sir Tony Redmond and the Improvement and Assurance Board and have valued their support and challenge as part of our improvement journey. I have no doubt this will continue as we work together in the interest of providing services in the best possible way for Nottingham residents.

“It is reassuring that Government has identified that our Together for Nottingham recovery and improvement plan remains the basis of the council’s required improvement, but we understand the pace of improvement needs to increase and that the plan will need to be reappraised to ensure we continue to head in the right direction.

“We will continue to support our dedicated and committed staff in the highly valued work they do to provide vital services to city residents and continue to engage constructively with partners.”