Nottingham City Council facing yet more cuts as £26m budget gap opens up

New documents have revealed the council ‘does not have a good financial grip’ on its budget over the coming year and faces even more cuts and savings to bridge a £26m gap.

According to the Labour-run authority, the hole in its budget for 2023-24 has opened up due to factors including rising inflation and a nationally-agreed staff pay award.

The cost of supporting people who are homeless because of the cost-of-living crisis and reduced Government funding have also been blamed.

The council is also predicting a gap of £50.9m in the 2024-25 financial year. Over a four year period up to 2027, this is expected to rise again to £58.7m.

The holes in its budgets will now have to be met through more “difficult savings”, which must be decided before March next year.

They will come on top of a range of cuts and other measures which have already been carried out, including the axing of jobs and a rise in council tax.

Coun Audra Wynter, council deputy leader, who also looks after finance, said: “The identification of a £26m in-year budget gap is significant and serious and some difficult decisions about transforming the way we deliver services and doing some things differently will be needed.”

These predicted gaps also follow a £9.8m overspend, about 4 per cent over what it had anticipated in its budget for the year, as approved back in March 2022.

This overspend will be met entirely using a fund called the Financial Resilience Reserve.

However, in terms of the budget gaps over the next four years, the amount of savings required exceed what is left in the council’s financial reserves.

Coun Kevin Clarke, leader of the Nottingham Independents, said residents “had better hold on to your hats”.

He said: “Here comes another council tax rise and there will be more cutbacks.

“People are questioning what they get from these council tax payments.”

People Services are forecasting the most significant pressures of £14.536m, of which £7.1m relates to adult social care, as well as a further £6.9m relating to children’s services due to similar reasons.

The Community, Environment and Resident Services department is reporting a net budget pressure of £1.273m, largely due to a £700,000 markets overspend, which includes £137,000 due to lower stall occupancy at Bulwell Market.

The total overspend was slightly offset by staff vacancies which saved £200,000.

The Growth and City Development department is reporting a net overspend of £2.946m, largely due to an increase in demand and costs of using bed and breakfast accommodation as temporary housing.

Further, the Finance and Resources department is reporting a net overspend of £2.9m, driven by a failure to deliver previous budget savings as well as historic budget issues.

The corporate department is also reporting a £4.2m pressure due to the nationally-agreed pay increase which led to an overspend of £9.7m, although this has been offset by a £5.9m underspend in treasury management.

Other costs have arisen due to the ongoing need to meet targets set by a Government-appointed improvement board, which was put in place upon the collapse of Robin Hood Energy.