Nottinghamshire and Ashfield councils confident their finances are in good shape

The city council issued a ‘Section 114 notice’ because it expects it won’t have enough money to cover its costs in the current financial year and is facing a budget deficit of £23m.

Councils across the country have struggled with budget black holes over the last few years as a result of cuts, rising social care and wage costs and – in some cases – their own expensive decisions.

Coun David Mellen (Lab), the council leader said while he accepted past decisions had cut its reserves, the authority’s decline pointed to a worsening national picture for the finances of local councils.

By law all councils must be able to set a balanced budget – meaning they do not spend more money than they receive in 12 months.

The Local Democracy Reporting Service has asked both the county and local district and borough councils for their latest financial positions as of December 1.

A report that went before cabinet in November revealed Nottinghamshire Council as running at £700,000 over-budget for the financial year – around 0.1 per cent of its annual budget.

However, it is confident this will be closed within the financial year.

Coun Ben Bradley MP (Con), council leader, said back in November: “We’re in a reasonable position given the challenges everyone is facing.

"We are managing the situation well.”

Senior councillors were hopeful of closing the gap, and said it compared favourably to other nearby county councils such as Derby, which has a £46m predicted overspend.

Over the next three financial years to 2026-27, it is estimated the council will spend £60.2m more than it brings in, although this gap too could close.

Ashfield Council reported that it doesn’t have a deficit, and its current forecast spend is ‘significantly within budget for this financial year’, meaning no reserves will need to be used.

Gedling Council estimates that £978,700 would be required from the reserves when it set its budget in March 2023.

At the time it said: “The challenges that lie ahead are increasing compared to those in previous years, due to inflationary pressures, but whilst recognising the significant challenges ahead, this plan is considered robust.”

It has not provided an updated figure since then.