Nottingham City Council leader says councils being 'starved' of funding - but admits past mistakes ate into reserves

But Coun David Mellen (Lab) also said the declaration of effective bankruptcy points to a worsening national crisis in local government.

On Wednesday, council chief finance officer Ross Brown issued a Section 114 notice, having decided the council would not be able to set a balanced budget as required by law with the authority facing a budget gap of £23m.

Speaking to the Local Democracy Reporting Service, Coun Mellen admitted reserves had been lower due to past decisions, including the collapse of Robin Hood Energy, which cost taxpayers £38m

He said: “Some decisions in the past which were well documented, have meant our reserve levels are lower than some other councils.

“Councils are using their reserves in greater value than us this year to solve their budget problem, and unless the Government come forth with proper funding of social care, they will be in problems next year.

“Other council leaders, not just Labour council leaders, have been in the media talking about this problem.

"This is a national thing where local government is being starved of resources.”

A meeting of all councillors will now take place within 21 days to consider the Section 114 report and an immediate prohibition period takes effect from November 29.

Until councillors have met, the spending controls already in place will be further tightened.

Coun Mellen issued his reassurance to those working for the council and taxpayers in the city.

He said: “If you work for Nottingham City Council, if you receive a service from Nottingham City Council, if you have done some work for the city council and are owed money, you will continue to receive your service or to be paid as appropriate.

“It will have to go through a process of being agreed and much non-essential spending will cease.”

The Government’s Department for Levelling Up, Housing and Communities (DLUHC), which appointed an improvement board to oversee the council upon the collapse of Robin Hood Energy, says it is now considering if any further intervention is required.

Coun Mellen added: “This overspend is not down to the council wasting money.

“This is about adult social care overspending, this is about being greater demand for children in care and placements being made more expensive.

“This is because many more people are presenting to us as homeless and we have a duty to house them, and it is because the rate of inflation over the last year have sky-rocketed.”

Answering a question as to if he will remain as leader of the council, he said the situation requires leadership and that he would be the one delivering that.

Robert Jenrick, the Conservative MP for Newark and former Local Government Secretary, posted on X, formerly Twitter:

“Nottingham City Council and its Labour leadership have proven themselves utterly unfit to govern this great city.

“Their breathtaking waste and incompetence have let residents down for long enough.

“It’s time for the Secretary of State to appoint commissioners to restore order.”