Nottingham ‘not on verge of bankruptcy’ insists leader

The leader of Nottingham City Council has dismissed reports that his local authority is on the verge of bankruptcy.

Cllr David Mellen denied reports that a report commissioned into the council’s finances, following the collapse of Robin Hood Energy contains the word ‘bankruptcy’.

Over the last few days, several media outlets have reported that a leaked copy of the rapid review, ordered by the Ministry of Housing, Communities and Local Government (MHCLG) last month, warns the local authority is on the verge of going bust.

The decision to carry out the review, led by Max Caller, was taken following a number of issues raised in a report published in August by Grant Thornton.

In September, Nottingham City Council announced that all the customers of its troubled energy company were to be transferred to British Gas.

Nottingham City Council said the report has not yet been formally published and is currently with housing secretary Robert Jenrick for consideration.

‘We have been working closely with Max Caller and his team over the last few weeks as they have carried out the review,’ said Cllr Mellen.

‘We fully accept the findings and remain committed to making the improvements needed to ensure we are the best we possibly can be as a council.

‘The review clearly raises serious issues around financial management and governance that need to be addressed urgently,’ added the council leader.

‘It highlights that we have been slow to act on warnings about the risk of relying on one-off savings and income through commercialisation and that we should have been managing budgets on a longer term basis to reduce core expenditure and transform services.

‘The council’s capital expenditure and high levels of debt compared to other cities is also flagged up as a major concern with the cost of borrowing restricting our flexibility on day-to-day spending.’

Mel Barrett, the council’s chief executive who joined the authority in September, added: ‘The review team said it was impressed with the determination of the council’s leadership to stabilise the current situation and take the necessary decisions to bring about improvement.

‘We hope and believe this demonstrates confidence that we can deliver the changes needed, building on the work we have already begun following the publication of the public interest report in the summer.’

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