Secretary of State beefs up powers of Improvement and Assurance Board at city council, decides against sending in commissioners “at this time”

The Secretary of State for Levelling Up, Greg Clark, has decided to strengthen the powers of the Improvement and Assurance Board overseeing Nottingham City Council, rather than appoint commissioners at this time.

This was “after reviewing evidence of the close and positive working between the council and the Improvement and Assurance Board”, which is chaired by Sir Tony Richmond, a former Local Government Ombudsman.

In June this year the Government said it was minded to appoint commissioners at the council after independent reports commissioned in response to the discovery of unlawful Housing Revenue Account expenditure found “serious historical financial and governance failings” as well as “cultural failings and a reluctance to escalate issues appropriately.”

In December 2021, the council acknowledged unlawful accounting practices associated with its ring-fenced Housing Revenue Account over six years, totalling £15.86m.

The latest measures will give the Improvement and Assurance Board statutory powers to compel the city council to act on their advice.

The Secretary of State said: “Under Sir Tony Redmond’s leadership of the Improvement Board, working with the council leader, Nottingham City Council has taken important steps to deliver the changes expected by local residents.

“However, it is clear that more action is needed to ensure the council is able to meet its best value duty.

“I have therefore issued Directions today that will empower the Improvement and Assurance Board and accelerate improvements at the council.”

Clark has asked the Board to report to him in three months and advise whether progress continues to be made at sufficient pace, or whether it requires further action, including stronger statutory interventions. As part of this evaluation, he has required the council to strengthen its approach to longer term budgeting.

Nottingham, which had pleaded with ministers not to send in commissioners to run it, welcomed the announcement. It said that in practice the Government’s decision would mean that recommendations from the Board in relation to the council’s ‘Together for Nottingham’ improvement plan would now have the weight of Statutory Direction.

“In short, the IAB will have the power to direct the council in relation to its improvement programme, in addition to offering advice,” the council said.

Nottingham argued that, working with the Board, it had made “significant progress” on improvements over the last 18 months, which included:

• Agreeing a balanced Medium-Term Financial Plan for the next four years, a key requirement of the non-statutory review, and within that a balanced budget for this year without the need for any other financial support or intervention
• Reducing debt levels and taking a strategic approach to disposing of property assets to bring an income to the council
• Carrying out a review of council-owned companies including bringing Enviroenergy in-house; selling Thomas Bow and transferring housing services back to the council
• Identifying and responding to issues with unlawful HRA misallocation – commissioning and implementing recommendations from two independent reports
• Working with bodies such as the Local Government Association and the Chartered Institute of Public Finance and Accountancy on implementing best practices at the council
• Implementing a modernised Council Constitution, including a new Councillor-Officer protocol

City Council Leader, Cllr David Mellen, said: “The decision not to appoint Commissioners shows that our representations about the positive progress we were making with the current Improvement and Assurance Board have been listened to and taken into account by the Government. 

“I would like to thank the significant number of partners and stakeholders who wrote to the Government in support of the council and the progress we were making. This was acknowledged by the Secretary of State who said that he wants to offer help not punishment.

“We know there is a lot more work to do but we have demonstrated our determination to address the issues which led to the non-statutory review and I am confident we will continue to work well with the Board to make the progress needed to emerge a better council.”

Chief Executive Mel Barrett said: “We have had a positive relationship with Sir Tony Redmond and the Improvement and Assurance Board and have valued their support and challenge as part of our improvement journey. I have no doubt this will continue as we work together in the interest of providing services in the best possible way for Nottingham residents.

“It is reassuring that Government has identified that our Together for Nottingham recovery and improvement plan remains the basis of the council’s required improvement, but we understand the pace of improvement needs to increase and that the plan will need to be reappraised to ensure we continue to head in the right direction.

“We will continue to support our dedicated and committed staff in the highly valued work they do to provide vital services to city residents and continue to engage constructively with partners.”