Nottingham City Council confirms £23m spending black hole

Nottingham City Council has confirmed that it is facing a spending black hole of some £23m for its current financial year.

A report published on Monday afternoon by the Council’s corporate director finance and resources, Ross Brown, show that while this figure has dropped by just over £2.5m from last year’s figures, the authority is in grave danger of issuing a Section 114 notice, which could effectively end with it cutting all spending bar that which it is legally obliged to carry out.

The report, which will be discussed by the Council’s Executive Board at a crunch meeting next Tuesday (November 21), shows that its People spending – which includes care and special needs services – is worst affecting, with an £18.7m overspend.

The authority had already cut £27m from its financial years budget, which runs to April.

The report says: “It is expected that corporate directors will seek to take mitigating actions to contain expenditure within the approved budget. Where pressures cannot be contained within a single department, the Corporate Leadership Team will explore those issues and agree how they will be managed within the overall approved General Fund Budget for the Council.”

If the Labour-led council is unable to find the cash it needs to meet the finance gap, its finance boss could issue a Section 114 notice, effectively saying it can’t meet its spending forecast for the year, such as Birmingham City Council did recently. The move would mean that any further spending by the council is banned – unless the chief financial officer gives permission.