Nottingham City Council Finances Face Significant New Weaknesses

Nottingham City Council has money problems. New weaknesses in their finances were found recently, and concerns exist about budget forecasts. Auditors worry the city can’t predict gaps, departments seem understaffed, and risk management also needs improvement.

Grant Thornton checked the council’s 2024 finances and shared a report with senior officials. Last year, they issued a legal notice because they felt some members didn’t grasp the crisis.

The report mentions budget problems, stating that demand modeling was inadequate and accountability was unclear. Reserve policy changes also created confusion, and the report notes the city declared bankruptcy last year.

Grant Thornton suggests better teamwork, recommending finance and budget holders collaborate and agree on a budget together. A clearer view of demand would help boost better financial performance.

A full audit is delayed nationwide due to a backlog affecting many councils. The Audit Commission once did this work, but it closed in 2015. Now, councils hire private firms like Grant Thornton.

The government wants to clear the backlog and set a deadline for past accounts of December 2024. For 2023/24, the deadline was February 2025, but Grant Thornton won’t meet this deadline.

They will issue a ‘disclaimer opinion,’ which they say meets regulations. The government will set more deadlines, covering years up to 2028, and will name councils missing dates.

Risk identification wasn’t consistent, so Grant Thornton wants a plan fast to improve managing risk. Training officers and members will help in this effort.

The council needs a permanent staffing solution in their internal audit team. The council acknowledges tough choices as they aim for stable, sustainable finances.

The council must change its operations and will reshape or cut services. Budget decisions will make the council very different to ensure long-term survival.