Prime Minister Rishi Sunak has come under fire from one of the UK’s largest city councils after he claimed it had “essentially bankrupted itself” and “let down its residents” despite the government cutting the city’s funding by £100 million each year for the last decade.
Sunak and City Council at Loggerheads
Nottingham City Council and Prime Minister Rishi Sunak find themselves at loggerheads over the financial difficulties confronting the council. The Prime Minister attributed these challenges to poor management rather than funding cuts, prompting scrutiny and concern over the financial health of local authorities.
Nottingham City Council, under Labour leadership, issued a section 114 notice in November, signifying financial distress and an inability to deliver a balanced budget. This development could result in potential government intervention, especially considering that four English councils have declared insolvency in the past year.
The financial landscape for Nottingham City Council appears bleak, with a £23 million overspend projected for the current year and a daunting £50 million budget gap anticipated in 2024-25. Attributing these challenges to a decade of austerity measures, the council revealed that its funding has been slashed by £100 million annually, resulting in a significant reduction in spending power. These financial constraints pose a formidable hurdle for the council in maintaining vital services for its residents.
Sunak’s Accusations of Mismanagement
In an address at a youth center in Mansfield, Nottinghamshire, Prime Minister Rishi Sunak laid blame on what he termed the council’s “clear mismanagement.” Sunak suggested that poor decisions, including substantial losses incurred in the failed Robin Hood Energy venture, have contributed to the council’s financial distress.
The ill-fated Robin Hood Energy, initiated by the council in 2015 to compete with national energy suppliers, was eventually closed, resulting in significant financial losses. The Prime Minister claimed that the city council had “let down its residents” and “essentially bankrupted itself”.
Council Leader’s Response to Sunak
David Mellen, the leader of Nottingham City Council, promptly rejected Sunak’s accusations, emphatically asserting that the blame rests squarely on government underfunding rather than local mismanagement.
Mellen expressed frustration with Sunak’s proclivity to attribute financial challenges to Labour-run councils, stating, “Rather than accept the blame for government underfunding of local authorities, he trotted out the same tired old lines about Labour mismanagement. As always, he is totally wide of the mark.”
Mellen further stressed the adverse impacts of consistent funding reductions, shedding light on the strain on local services, particularly in the face of rising costs in adult and children’s social care. The reduction of £100 million in funding annually since 2013, according to Mellen, has stretched local services to the brink, compelling difficult decisions to balance the budget and fulfill essential responsibilities.
“The reduction of funding from government, £100m less every year since 2013 in the case of Nottingham city, combined with rising costs of adult and children’s social care, is pushing local services to breaking point,” Mellen continued.
Contrasting Nottingham City Council with Nottinghamshire County Council
Attempting to highlight governance disparities, Sunak drew a sharp contrast between Nottingham City Council and the Tory-led Nottinghamshire County Council. The Prime Minister commended the county council for making “difficult decisions to run things responsibly,” emphasizing a perceived distinction between the approaches of Conservative and Labour-led councils. This comparison aimed to illustrate, what Sunak believes is the purportedly more responsible governance under Tory leadership.
Ben Bradley, MP for Mansfield and leader of Nottinghamshire County Council echoed concerns about funding challenges in local government. Bradley, along with other Tory council leaders, co-signed a letter addressed to Chancellor Jeremy Hunt, warning about potential service cuts due to inadequate government funding.
The letter, signed by councils such as Essex, Hampshire, Kent, and Surrey, said that one in ten authorities faced potential bankruptcy from April, underscoring the urgency for increased financial support.
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