Nottingham City Council asks for 'exceptional financial support'

Nottingham City Council has asked the government for "exceptional financial support" after it effectively declared itself bankrupt.

The authority issued a section 114 notice in November after it was unable to close a budget gap of £23m.

Extra financial support has now been requested for both the current and next financial years.

The council has a separate budget gap of £53m for the year, beginning April 2024.

Chief finance officer Ross Brown said the council was unable to set a balanced budget as legally required, owing to reduced government funding and soaring demand and costs for social care and homelessness services.

The collapse of council-run Robin Hood Energy and unlawful spending from its Housing Revenue Account also left its reserves depleted.

Despite issuing a section 114 notice, the authority still faces the challenge of balancing its books for the next financial year, the Local Democracy Reporting Service said.

If the support is granted by the government, the support will not be in the form of a grant.

Instead, it is likely to be a combination of loans and special permission to raise money from council assets and spend it on day-to-day operational costs. 

A council spokesman did not say how much the council is seeking.

He said: ""A request for Exceptional Financial Support for the current financial year 2023/24 and next year, 2024/25, is being discussed with the Government Department for Levelling Up Housing and Communities.

"In practical terms this will be to seek permission to 'capitalise' revenue expenditure so that it is treated as capital expenditure and can be met from the council's capital resources."

The council was previously granted exceptional support from central government in two tranches, the first being £20m for 2020-21, and an in-principal allocation of up to £15m in 2021-22 to support ongoing transformation.

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