Council 'would have to raise tax by 46% to carry on'

Nottingham City Council would need to increase council tax by 46% or receive a 70% rise in government funding to continue operating as it has done, a new report states.

Commissioners were appointed to help run the authority in February after it effectively declared itself bankrupt in 2023.

The commissioners' first report on the council's progress, written in August, was published on Thursday alongside a ministerial response.

The report states there have been improvements under the council's new leadership, but added the authority "operates significantly beyond its means and is currently far from sustainable".

It added "impossible solutions" such as a steep council tax rise or major funding boost "must be avoided, and they can be".

Council leader Neghat Khan, who took over in May, said the Labour-run authority had "faced up to the challenges that the council must tackle".

The commissioners' report said the council's budget for the 2025-26 financial year would be "the most difficult that it has ever had to set".

It added it came "hot on the heels of an already difficult" budget for 2024-25, which saw a wide-range of front-line services facing the axe. Plans for £24m of further cuts and savings were published on Monday.

The latest published figures predicted a £172m gap in the council's budget over the next three years, but updated figures are expected in the coming weeks.

Meanwhile, the report gives details of failings in the way the authority has been run, highlighting how senior managers are not always accessible.

It said the council's hybrid working policy was now being reviewed as a result.

"Delegation of decision-making is haphazardly applied, and accountability does not always accompany it," it said.

"This builds in delay, risk, and cost. It also engenders frustration.

"Relationships between the political leadership and senior managers have consequently become strained over the years. These relationships are being reset, and expectations made explicit."

It acknowledged, however, that the "new leadership cohort is facing up to the challenges that the council must tackle" and said commissioners had not been forced to use their powers to intervene with decision-making.

Council leader Khan welcomed the report but accepted there is further work to be done.

"Commissioners have highlighted the firm cooperative working relationship they have with the council and that we have welcomed them constructively and established a positive and productive approach to engaging with them," she said.

"They have also said that, as new leader and chief executive, we have faced up to the challenges that the council must tackle in full acceptance of the reality of the difficulties and have a declared resolve to overcome them."

In a letter to the commissioners, local government minister Jim McMahon said: "The road to financial recovery must be met with the seriousness it deserves, and I am pleased to see a clear commitment to move to a new operating model.

"Because of the scale of the challenge in Nottingham, it is self-evident that there will still be difficult decisions to come."

The commissioners' next report is expected to be provided to ministers in March next year.

By Hugh Casswell, BBC Nottingham political reporter

46% is an absolutely stunning figure for a council tax rise, albeit a hypothetical one.

No-one expects it to actually come to that, with changes already being made to try and get the council on a more stable financial footing.

It's perhaps the clearest distillation we've seen yet, though, of the scale of the challenge.

And with a very, very long way to go, some of the changes needed will hurt.

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