Nottingham City Council will soon have spent up to £1m on two programmes as it attempts to balance its books and improve its operations to prevent further Government intervention. Even more consultants are being hired as the council looks to begin its second £500,000 programme "to ensure sound financial management".
Just weeks ago it was revealed the Labour-run authority's transformation academy programme, whereby existing staff are skilled-up so they can take on more responsibility and lessen the need for external consultants, will be costing somewhere in the region of £500,000. And the council has now signed off up to £500,000 to develop another programme.
Pricewaterhouse Coopers (PwC) will be given a contract to help deliver the objectives of the newly-coined 'finance recovery programme'. The need for the programme is perhaps even more critical upon the discovery of an estimated £40m of misspent cash from the council's ringfenced Housing Revenue Account (HRA), £15m of which unlawfully transferred from a pot of cash intended for council tenants into the authority's general fund.
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Continued progress towards improvement is now a legal requirement following the collapse of Robin Hood Energy, with an improvement board scrutinising and reporting back to the Government on the latest developments. These goals cannot however be achieved without external support, the council has argued, but it is proving costly.
Speaking of the latest approved spend Clifton West councillor Andrew Rule, for the Conservatives, said: "It is necessary to sure-up the skills gap that we have got in the council around budgeting. It will be a key part of satisfying the improvement board that we can develop a sustainable financial plan going forward.
"But we must always remember that this is the legacy of the appalling handling of Robin Hood Energy and latterly the discovery of the poor financial controls with the HRA."
Councillor Rule says the money will be spent on procuring consultants to assist the council, "in light of the departure of valued colleagues." The city council has already designated vast amounts of its finances to external support, including consultants costing upwards of £1,000 per day.
The contract to monitor the delivery of the finance recovery programme will be handed to PwC. The need for support is largely down to the difficulty in employing and retaining employees with the relevant skills. The council's reputation, concerns over staff morale and employees finding better paid jobs elsewhere have prompted a worrying shortage in expertise in some areas.
As a result external help is required and the council hopes these consultants, who are also training up internal staff at the same time, will help bridge this gap. Councillor Rule added: "It looks very much like they are commissioning the help of PWC.
"It is something that we need to do because we must always remember if we do not do this, the next step will be the commissioners. And judging from the experiences of other local authorities we do not want that."
The finance recovery programme will have five main objectives. These include, the council says, "re-establishing baseline budgets to ensure the standardisation of budgets; setting out the requirements and recommendations to support the management of the budgets; making recommendations for future budgeting processes and associated timelines; developing a financial recovery plan, including identification of capacity and capability gaps across the organisation; and automation improvements for financial processes."
There may also still be costs relating to the implementation of the programme, with council documents stating this is an "initial spend" for its delivery only. The programme will be funded using the authority's resilience reserve.
City council leader and Dales ward councillor, David Mellen, added: "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. We are making good progress on this, but we need external expertise at this early stage of our transformation, with changes required at pace.
“We 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."
