Nottingham council issues legal notice over unlawful £16m spending

Nottingham City Council has issued a legal notice after millions of pounds were unlawfully spent.

A total of £15.86m from the Housing Revenue Account - intended for things such as repairs - was instead used for general council services, leading to a section 114 notice.

Last month the leader of Labour-run authority said he was "mystified" at the discovery.

A special full council meeting will take place next year.

The council said it was required to issue both a section 114 and section 5 notice - a formal acknowledgement it had acted unlawfully specifically in relation to housing services.

This, it says, is distinct from section 114 notices covering all council activity, and so means no further spending restrictions have to be imposed.

It comes after a string of financial issues at the council, including the collapse of Robin Hood Energy.

A government-appointed inspector has been brought in to oversee its finances.

In a statement the authority said its officers issued the notices "in line with local government law" to confirm allocating housing funds to its general funds "was unlawful".

David Mellen, leader of the council since 2019, said the discovery "will not directly affect the council's revenue budget for day-to-day services but will put further pressure on our general fund reserves".

"I am determined that an investigation is carried out without delay to understand how this happened and will absolutely ensure that measures are put in place so that something like this cannot happen again," he said.

"The fact that this continued unchecked for a number of years is clearly disappointing and whilst we understand how this could have happened, it is only right that issues such as this are unearthed and dealt with transparently."

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