Nottingham City Council has obtained permission from a capitalization directorate to borrow £ 35million from the government as it attempts to deal with looming pressure on the £ 36million cost l ‘next year.
LGC understands that key members of the Nottingham cabinet are currently willing to accept the offer, which was made last Friday.
The loan would be split into two parts – one for £ 20million and the other for £ 15million – to be spent on a transformational program designed to save money in the long run, especially in its special education divisions, according to LGC.
Nottingham applied to the Department for Housing, Communities and Local Government in December for permission to borrow up to £ 35million for transformation projects, as part of a three-year plan to restore its finances in difficulty.
A well-placed source said LGC Nottingham was seeking the loan primarily to enable it to “ease demand pressures” in adult and child services and “move away from children entering long-term care as a first resort. , focusing more on early intervention and foster homes rather than nursing homes ”.
The need to reform the Nottingham Children’s Services Division was highlighted during two Ofsted inspection visits in 2018 and 2020, where serious concerns were raised. During the last visit, the inspectors claimed that the situation had deteriorated and highlighted “systemic weaknesses in the practice of social work throughout the service”, according to Nottinghamshire Live.
In addition, the MHCLG – commissioned for a quick review by Max Caller in Nottingham reported last December that in recent years increasing cost pressures in adult and children’s services have “challenged the board’s finances” and has concluded that the council would need additional government support. .
In his response to the review, Communities Secretary Robert Jenrick said he may also impose a borrowing cap on the cash-strapped authority, although it is not yet clear whether this was stipulated in his ministry’s offer.
Meanwhile, Nottingham councilors yesterday approved a 1.99% and 3% municipal tax increase in the precept of adult social care, as part of plans to save £ 15.6million l ‘next year.
But following an amendment, three more proposals that would have saved the council £ 183,315 – to charge for public toilets, cut funding for the arts and cut funding for the council’s missing children team – have not been adopted or have been watered down.
It also emerged during the meeting that Nottingham had spent £ 129,000 on an unsuccessful court case it brought against Barclays. Last month, the High Court judge dismissed the case brought by the Greater Manchester Combined Authority, North East Lincolnshire Council, Newham LBC, Oldham MBC and the city councils of Leeds, Newcastle and Sheffield, as well as Nottingham, in about the loans they had taken out. The councils claimed their lender option loans had been “marred” by the Libor-rigging scandal, but the judge said the case had “no real prospect of success.”
Andrew Rule, leader of the Conservative group, said spending money on the case at a time when finances were so strained had been “frivolous”.
“Although in our financial situation £ 129,000 is less than a drop in the ocean, this is exactly the sort of thing we should avoid because it all adds up,” he said.
A spokesperson for MHCLG said: “We recognize that even with the tremendous support already provided, there will be individual counseling with unique circumstances. In some cases this has been exacerbated by financial mismanagement on the part of the councils.
“We’ve had conversations with a few boards around exceptional financial support. These are confidential discussions and we cannot disclose any details until final decisions are made. The MHCLG is committed to publicly announcing any exceptional financial support provided to individual councils. “
A spokesperson for Nottingham said: “We are in discussions with the Secretary of State who has briefed us on his current position on funding and asked us to respond.”