City council 'house in order' after £20m underspend

Nottingham City Council underspent by £20m in the last financial year, the authority's deputy leader has said.

The Labour-run authority effectively declared itself bankrupt in November 2023, but Ethan Radford said the council's financial position is now "good".

Radford, who represents Bulwell on the council, said the position for the 2025-26 financial year was reached by "being more efficient with our resources and getting a better grip on our budgets".

"It should give people reassurance that we have got our house in order when it comes to the authority's finances," he said.

"If it were a £20m overspend I'd completely understand the scepticism but this is a demonstrating factor that we are actually using taxpayer's money more efficiently."

He added the money would be reinvested in frontline services rather than put into the council's reserves, which he said are "already at a healthy level".

"We're going to address the problems people see around cleansing, safety, and go further on some of the packages we've put in for younger people."

Asked if the money could be used to offset a potential future increase in council tax, Radford said any decision for the next financial year would be made after Christmas.

"It's entirely possible we could take this £20m and decide not to increase council tax and use this £20m to offset that increase, I don't think it's necessary at this moment in time," he said.

"Other authorities are using their reserves to not increase council tax, which is an artificial approach and it does not provide best value for the taxpayer."

"I think what people want to see at the moment is that £20m invested in frontline services so their streets are cleaner, safer, and people have more money in their back pocket."

During a full council meeting on Monday, leader of the Nottingham Independents, Andrew Rule, asked if some of the money should be placed into reserves in order to bridge future funding gaps outlined in the council's Medium-Term Financial Plan.

In response, Radford said the plan does not take into account potential future savings or council tax rises.

The most recent council tax increase of 3.5% in Nottingham was the lowest rise in 18 years.

Commissioners were appointed to help run the council in 2024 but left earlier this year.

They were replaced with "ministerial envoys" who have fewer powers but are still able to advise the authority.

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