City council says it has 'significantly' cut debt

Nottingham City Council's deputy leader said the authority has "significantly" reduced its debt levels.

The Labour-run council, which is currently under intervention by government commissioners, said it paid off £177m of debt over Christmas.

The authority said its debt levels reached £827m in 2020 but have been steadily coming down and now stand at £292m after the recent payment.

Councillor Ethan Radford, deputy leader and executive member for finance and resources, said the authority is financially stable.

"It's fantastic news. In the last six years, we've paid off 64% of our debt," Radford, who is a Bulwell councillor, said.

"We've steadily been paying off our debt over the last six years to get it to a point where it's much more reasonable.

"We've had the opportunity over Christmas to take advantage of a window in the market to pay off some high interest loans.

"What that means is we've made a significant debt reduction, but also we're going to make savings every year, which is money we can now reinvest back into services.

"Now we're paying less on servicing that debt, taxpayers' money is going to go on services that they really care about - street cleaning, safety, and potholes."

He said no services have been cut or taxes raised to make the large payment.

The council's current general debt fund level does not include the debt from the Housing Revenue Account (HRA) which is ring-fenced money for council housing, or the tram network debt.

The council was declared effectively bankrupt in November 2023 after it could not set a balanced budget.

It remains under government intervention.

"When the commissioners were first appointed, they were a little agitated about our levels of debt," Radford said.

"They became less so as we showed them the plan to reduce the debt over a period of time.

"They're aware of the latest debt payment and are happy with it, as I imagine the taxpayer in Nottingham is."

Commissioners are due to leave the authority in February.

"We're yet to hear back from the government, but there's no reason why they shouldn't be leaving as planned," Radford added.

The authority will set its budget in March when it plans to invest £15m in front-line services and make £11m of savings.

Council tax levels have not yet been decided but the maximum a council can raise taxes by without a referendum is 4.99%.

Radford said: "We haven't yet made a decision on council tax, but we will be making a decision in the coming weeks.

"We can't rule anything out at this stage, but we did get a very generous settlement from the Labour government before Christmas.

"We're taking into consideration all possibilities on council tax at the moment."

A Ministry of Housing, Communities and Local Government spokesperson said: "Commissioners continue to support Nottingham City Council on its recovery journey to ensure that improvements are made for local people.

"The current arrangement is due to end in February and ministers will determine next steps in due course."

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