Nottingham City Council has spent more than £5m on external consultants as part of work to stabilise its finances and improve its workplace culture, it can be revealed. A further £6.5m is also expected to be spent on consultants for the improvement of the council’s failing children’s services.
The council says some of the spending is on short-term, essential support which will improve the authority in the long-term and so provide value for money. Upon the publication of a public interest report into poor governance of Robin Hood Energy in 2020, the Government appointed an Improvement and Assurance Board to oversee a plan to bring about change within the Labour-run authority.
Since it was appointed in 2021, the board, chaired by Sir Tony Redmond, has reported back to the Government every quarter on the council’s progress. To bring about rapid improvement and avoid further Government intervention the council has been employing external consultants and interim staff in various departments, due to a lack of internal expertise.
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In October 2022 a Freedom of Information (FOI) request was submitted to the council in a bid to find out exactly how much money has been spent so far. The authority says at the time of responding on January 20 it had spent £5.5m on consultants as part of the Together for Nottingham Plan (once referred to as the Recovery and Improvement Plan (RIP)).
Cllr Kevin Clarke, the leader of the Nottingham Independents opposition group, described the figure as “frightening”. “I knew it was a lot of money, but I did not know it was that high,” he said.
“It is about employing the right staff to do the job, but they cannot seem to do it. They cannot seem to hold on to staff. It is astounding.”
The costs of consultants to the council have been as high as £1,012 per day, which was the going rate for Richard Grice, the interim director for Transformation and Improvement. External expertise is being brought in due to a lack of internal capacity, the council says.
Recruitment drives for senior staff have generally been unsuccessful due to tough labour market conditions, better pay in the private sector as well as the council’s reputation. However, through the use of consultants the council argues it is training up its own staff, so as to rely less on costly external expertise.
For example the interim corporate director of finance, Clive Heaphy, who was paid roughly £370,000 per year, has now been replaced by Ross Brown on a permanent basis. While the council cannot borrow any money at present following the collapse of Robin Hood Energy, the Government has allowed it to borrow £20m to fund external consultants and other recovery activities.
The council’s own assets have been used as security against the sum. In the FOI response documents the council says: “The Government’s non-statutory review of the council places a requirement on the council to improve, with a focus on financial and governance arrangements.
“The council are making good progress on this, but we need external expertise at this early stage of our transformation, with changes required at pace. The council made a request to Government for capitalisation, allowing us to borrow up to £20m against capital assets, which has helped us to create a transformation reserve.
“Some of this reserve money is being used to appoint external experts and set up new business support and customer service arrangements to drive the transformation activity that’s been identified is needed at the council.
“This does not impact on our budgets for running day to day services.”
City Council Leader, Cllr David Mellen (Lab), said: “I appreciate that when the council is facing financial difficulties, the costs of appointing external consultants may appear counter-intuitive. However, the council is in a position where it needs to urgently make significant changes and improvements to the way we operate.
“Where this work is specialised or we don’t have the necessary capacity within the council, we need to bring in external expertise. Often this work is for shorter periods only so it makes more economic sense to have people working on these specific projects with temporary contracts rather than as permanent staff so they can drive and direct the required changes which will leave us a better, more efficient council.”
Asked whether the borrowing could impact on future budgets, Cllr Clarke added: “It is pretty obvious, it is £5.5m less. How can it not have an impact? It is more expense at the top and services are suffering.”
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